By Alexei Oreskovic
SAN FRANCISCO, Feb 1 (Reuters) - Social networking start-up
Path will pay $800,000 to settle charges with federal regulators
that it improperly collected personal information on children.
The company also agreed to submit to 20 years of independent
privacy reviews to settle charges that it secretly collected
information from its users mobile phone address books.
The settlement, announced by the Federal Trade Commission on
Friday, is the latest between the agency and Web companies for
privacy violations.
San Francisco-based Path triggered a privacy controversy in
February 2012 when an independent software developer in
Singapore discovered that the company's iPhone application was
uploading users' address book data to its own servers without
permission.
Path CEO Dave Morin, who was an early employee at Facebook
Inc, quickly apologized for the incident at the time and
said the company had deleted all the "contact information" it
had collected.
The FTC said on Friday that in addition to having uploaded
users' address book information without permission, Path had
also violated federal privacy laws by collecting the personal
information of roughly 3,000 children without getting their
parents' consent.
In a post on the company blog on Friday, Path acknowledged
that it had failed to reject children under the age of 13 from
registering for the service.
"There was a period of time where our system was not
automatically rejecting people who indicated that they were
under 13," Path said. "Before the FTC reached out to us, we
discovered and fixed this sign-up process qualification, and
took further action by suspending any under age accounts that
had mistakenly been allowed to be created."
Under the terms of the settlement, Path, which lets mobile
phone users share photos and other information with small
circles of friends, will obtain independent privacy audits every
other year for the next 20 years and establish a comprehensive
privacy program.
Online social networking companies have faced increasing
scrutiny and enforcement from privacy regulators as consumers
entrust ever-increasing amounts of information about their
personal lives to Web services.
In August, Google Inc agreed to pay a $22.5 million fine to
settle charges that it bypassed the privacy settings of
customers using Apple Inc's Safari browser. Facebook settled
charges in 2011 that it deceived users by letting advertisers
collect some of their personal information.
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