Xanga.com has agreed to pay a $1 million to settle a federal complaint that accused the social-networking site of violating the Children's Online Privacy Protection Act.
The civil penalty was the largest ever for a COPPA violation, the Federal Trade Commission said Thursday.
The federal agency accused Xanga.com of collecting, using and disclosing personal information from children under the age of 13 without first obtaining parental permission. While the site said children under 13 could not join, it allowed visitors to create accounts, even if they provided a birth date indicating they were under the legal age.
Besides failing to notify parents, Xanga.com also didn't provide parents with control over their children's information, as required by the act, the FTC said.
"A million-dollar penalty should make that obligation crystal clear," FTC Chairwoman Deborah Platt Majoras, said in a statement.
The site created 1.7 million accounts over the last five years for users who indicated they were under 13, the FTC said.
Xanga.com cofounder and chief executive John Hiler acknowledged that the system intended to screen out underage users was "inadequate."
"Users were able to initially indicate that they were at least 13 years old when registering for the site, and then afterwards post a younger age on their profile," Hiler said in a statement.
In addition, the company found that members created profiles with birth dates other than their actual day of birth when creating a blog.
"For example, pet bloggers registered with their pet's birthday, engaged bloggers registered with their wedding date, and religious bloggers registered with their "born again" date," Hiler said.
To correct the shortcomings, Xanga.com has added employees whose sole responsibility isto act on account deletion request from parents, Hiler said. The site also has created a flagging system that allows Xanga users to flag others who are underage, or are posting material in violation of Xanga's terms of service.
Privately held Xanga.com, founded by Hiler and Marc Ginsburg, had 25 million registered users in 2005. The New York-based company was incorporated in 1999.