Microsoft has agreed to pay $20 million to settle claims made by the US government that it improperly collected children's personal information through its Xbox Live gaming service, violating their right to privacy.

Microsoft has agreed to a $20 million settlement with the Federal Trade Commission (FTC) in response to allegations that it violated the Children's Online Privacy Protection Act (COPPA). According to a press release, the corporation kept some personal information about children's accounts for far too long.

On Monday, the Federal Trade Commission and the tech company struck a deal in which it was requested that underage gamers' privacy be strengthened. But before it can take effect, a federal court must approve the settlement.

The federal authorities discovered that Microsoft had illegally retained the data for longer periods of time than necessary for accounts created before 2021, as well as that it had collected the data without alerting parents or getting their consent. The Children's Online Privacy Protection Act was broken by these actions, according to the FTC. The law requires that all kid-targeted internet services and websites acquire parental permission and notify the parent when personal information about their child is being gathered.

Dave McCarthy, corporate vice president for Xbox at Microsoft, detailed further measures the company is now taking to enhance its age verification processes and make sure that parents are involved in the establishment of kid accounts for the service in a blog post.

"Regrettably, we did not meet customer expectations and are committed to complying with the order to continue improving upon our safety measures," Microsoft's Dave McCarthy, CVP of Xbox Player Services, wrote in an Xbox blog post.

"We believe that we can and should do more, and we'll remain steadfast in our commitment to safety, privacy, and security for our community."

It added that the majority of these focus on initiatives to enhance age verification technologies and inform kids and parents about privacy concerns.

Previously, the FTC found that Amazon had stored private information for years, including recordings of children's voices, and it reached an agreement to pay $25 million.

Amazon's Ring doorbell camera device, which gave employees free access to customer data, has agreed to pay $5.8 million.