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Playdom makes $3 million FTC settlement

By David Jenkins

Fri 13 May 2011 10:36am GMT / 6:36am EDT / 3:36am PDT

Pony Stars was not Children's Online Privacy Protection Act compliant

Disney social games arm Playdom has made a $3 million settlement with the Federal Trade Commission (FTC) in the U.S., after being accused of improperly collecting and distributing children's personal information.

The games in question were operated by Acclaim, which Playdom acquired in 2010 - before in turn being acquired by Disney later the same year. Former Acclaim CEO Howard Marks was also named in the case.

The FTC accused Acclaim's titles of not complying with the Children's Online Privacy Protection Act (COPPA) between 2006 and 2010. Specifically the games collected children's ages and email addresses and allowed them to be posted live without parental consent - which is also in violation of Playdom's own internal policies.

The FTC claims that around 403,000 children registered on its general audience sites during this time and an additional 821,000 for the specifically child-orientated Pony Stars.

In addition to the $3 million fine Playdom is now permanently barred from violating the COPPA rule and "from misrepresenting their information practices regarding children".

Apart from Facebook title RockFree all Acclaim titles, including Pony Stars, have been closed down.

"Let's be clear: Whether you are a virtual world, a social network, or any other interactive site that appeals to kids, you owe it to parents and their children to provide proper notice and get proper consent," said FTC chairman Jon Leibowitz. "It's the law, it's the right thing to do, and, as today's settlement demonstrates, violating COPPA will not come cheap."

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