Path Inc., the developer of a mobile social-networking application, settled with the U.S. Federal Trade Commission over complaints that it deceived consumers by collecting personal information from mobile address books.
The company also will pay $800,000 to settle charges that it illegally collected data from children without getting their parents’ consent, the FTC said today in a statement. Path said in a blog post that it has since closed those accounts.
“There was a period of time where our system was not automatically rejecting people who indicated that they were under 13,” the San Francisco-based company said today in the blog post. “It wasn’t until we gave our account verification system a second look that we realized there was a problem.”
Path lets friends give updates on their day such as posting pictures of experiences tagged to locations or saying when they’re going to sleep. People who signed up for an account were given an option to pick friends from their list of address book contents, information that Path stored. The FTC said the user interface was misleading, providing no meaningful way for consumers to choose what personal information was collected.
“Path is prohibited from making any misrepresentations about the extent to which it maintains the privacy and confidentiality of consumers’ personal information,” the FTC said in its statement.
The closely held company has almost 6 million users and has raised about $41 million in venture capital, said Dani Metz, a spokeswoman for Path who works for the public relations firm Hatch Agency. Metz referred to the blog post when asked to comment about the settlement.
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