Social games studio Playdom will eat a $3 million fine for violating the U.S. Child Online Privacy Protection Act with several of its games.
Playdom was accused by the U.S. Federal Trade Commission of collecting information including kids’ ages and email address in several of its games and then posting that information online without parental consent. The games in question were originally operated by Acclaim Games, prior to its acquisition by Playdom in May 2010, including the now-defunct Ponystars. Former Acclaim Games CEO Howard Marks was also named in the case.
The FTC said that 821,000 children had registered for Pony Stars, along with 403,000 who signed up for its “general audience sites.” How much user information actually ended up floating around on the internet isn’t clear but whatever the amount, FTC Chairman Jon Leibowitz said the settlement serves notice to game companies that they “owe it to parents and their children to provide proper notice and get proper consent.”
“It’s the law, it’s the right thing to do, and, as today’s settlement demonstrates, violating COPPA will not come cheap,” he added.
Three million bucks is an awful lot of money, sure, but is a fine like this really “not cheap” in the grand scheme of things? In July 2010, Disney spent more than $563 million to acquire Playdom, with another $200 million on offer if the it specific growth targets. So if Disney ends up paying full pop for Playdom, the FTC settlement could represent less than one half of one percent of the purchase price; in other words, it’s a rounding error. I’m not sure how much of a point about the importance of online privacy rights that’s really going to make.