FTC: Disney's Playdom violated child protection act

Disney's Playdom social-gaming service has been ordered by the Federal Trade Commission to pay $3 million in fines for collecting and disclosing children's information without parental approval.

According to the FTC, many of Playdom's games, most notably the child-focused Pony Stars, attracted over 400,000 kids between 2006 and 2010. During that period, children under the age of 13 were able to register for the site, violating the Children's Online Privacy Protection Act (COPPA), which requires Web site owners to notify parents and obtain their consent before they "collect, use, or disclose children's personal information."

Disney acquired Playdom last July for $563.2 million. The deal also included the potential for Playdom's owners to receive another $200 million after earnouts. According to Playdom's Web site, it has over 44 million monthly active users.

According to the FTC, Playdom required children to share their ages and e-mail addresses during registration. The service then allowed those kids to "publicly post their full names, e-mail addresses, instant messenger IDs, and location, among other information, on personal profile pages and in online community forums."

"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," Jon Leibowitz, chairman of the Federal Trade Commission, said in a statement yesterday. "It's the law, it's the right thing to do, and, as today's settlement demonstrates, violating COPPA will not come cheap."

In addition to paying the fine, the FTC barred Playdom from "violating the COPPA Rule and from misrepresenting their information practices regarding children."

Playdom did not immediately respond to CNET's request for comment.