Microsoft will pay $20 million to resolve government charges that it unlawfully obtained personal data from youngsters, officials reported.

The Federal Trade Commission purported that from 2015 to 2020, Microsoft collected personal data from children under the age of 13 who signed up for its Xbox gaming system, without their parent's permission, and retained this information.

Users had to enter their first and last names, email addresses, and birth dates in order to establish an account.

The FTC stated that Microsoft violated a law called the Children's Online Privacy Protection Act, or COPPA.

"Our proposed order makes it easier for parents to protect their children's privacy on Xbox, and limits what information Microsoft can collect and retain about kids," said Samuel Levine, head of the FTC's Bureau of Consumer Protection, as quoted by AFP.

"This action should also make it abundantly clear that kids' avatars, biometric data, and health information are not exempt from COPPA," he added.

Before the ruling can be put into effect, a federal judge must still approve it.

According to the FTC, Microsoft will have to take a number of actions to strengthen privacy protections for children using its Xbox system.

The COPPA law determined that internet services and websites that cater to children under the age of 13 must tell parents about the personal information they collect and acquire verified parental approval before doing so.

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