The Walt Disney Company has agreed to pay a $3 million settlement stemming from charges that online virtual worlds once operated by Playdom, now a Disney subsidiary, violated the Federal Trade Commission rules designed to protect the online privacy of children under age 13.

According to the FTC, several Playdom sites that were aimed at young audiences illegally collected and then disclosed personal data in violation of the Children's Online Privacy Protection Act (COPPA). These sites included Pony Stars, 2 Moons, 9 Dragons, Age of Lore, and My DIva Doll. The FTC complaint says that some 821,000 children registered with Pony Stars between 2006 and 2009 and another 403,000 signed up for Playdom's other online virtual worlds. These sites collected children's names, ages, and email addresses and allowed them to post that personal information publicly online -- including their real names and locations. The FTC charged that the company failed to get parents' consent before collecting or disclosing this information.

The sites in question were created by Acclaim Games, which were acquired by Playdom in May 2010. Playdom, in turn, was acquired by Disney in August 2010, and by that time many of the games were shut down or transferred to offshore operators.

A Disney spokesperson said in a statement that it was "pleased that Playdom and the FTC have now resolved this matter amicably."

The announcement of the settlement coincides with the introduction of legislation by Representatives Joe Barton (R-Texas) and Edward Markey (D-Mass.) that will update online protections for children. Indeed, the legislation that governs children's online privacy, the Children's Online Privacy Protection Act, was first passed in 1998. 1998 - that's eons ago in Internet years. A world pre-Playdom, pre-Facebook, and even pre-Google. (Well, the search engine was actually incorporated that year.)

The updated COPPA legistation, called the "Do Not Track Kids Online Act," would require online companies to explain the types of data that's collected as well as how it is to be used or disclosed. It would also update language to include mobile applications, and it would ban companies from using children and teens' personal data for targeted advertising.

The federal government is examining a number of new measures to protect consumers' privacy online, but no surprise, particular attention is being paid to the children's privacy online - not just on those sites like Disney's aimed at directly at those under 13, but at others such as Facebook that, despite Terms of Service rules that dictate otherwise, are full of children.