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A privacy researcher is urging Netflix to cancel its next research contest, before it results in potentially millions of dollars in damages for invasion of its customers' privacy. "Netflix should cancel this new, irresponsible contest," Paul Ohm wrote in a blog affiliated with Princeton University's Center for Information Technology Policy. On Monday, the company awarded $1 million to the winners of its first competition, aimed at developing technology to improve its ability to predict what movies its customers will like. Ohm worries the information the company is about to release as test data for the second contest isn't as anonymous as Netflix may think.

Did we need more proof that a chain is only as strong as its weakest link?

A secure Web mail company that challenged hackers to break into the company's Web mail system is paying out a US$10,000 prize, just days after launching the contest. A team of hackers managed to hack into StrongWebmail CEO Darren Berkovitz's Web mail account, using what's known as a cross-site scripting (XSS) attack, the company confirmed Monday. "They did it using an XSS script that took advantage of a vulnerability in the backend webmail program," StrongWebmail said in a statement. StrongWebmail launched the contest at the end of May as a way of promoting the voice-based identification technology sold by its parent company, Telesign. Hackers were given Berkovitz's e-mail address and password and challenged to break into the account. The company thought this would prove difficult because StrongWebmail requires a special password that is telephoned to the user before e-mail can be accessed.

"Iconix Brand Group, Inc. will pay a $250,000 civil penalty to settle Federal Trade Commission charges that it violated the Children's Online Privacy Protection Act (COPPA) and the FTC's COPPA Rule by knowingly collecting, using, or disclosing personal information from children online without first obtaining their parents' permission. Iconix owns, licenses, and markets - both offline and online - several popular apparel brands that appeal to children and teens, including Mudd, Candie's, Bongo, and OP. Iconix required consumers on many of its brand-specific Web sites to provide personal information, such as full name, e-mail address, zip code, and in some cases mailing address, gender, and phone number - as well as date of birth - in order to receive brand updates, enter sweepstakes contests, and participate in interactive brand-awareness campaigns and other Web site features. Since 2006, Iconix knowingly collected and stored personal information from approximately 1,000 children without first notifying their parents or obtaining parental consent, according to the FTC's complaint. On one Web site, MyMuddWorld.com, Iconix also enabled girls to publicly share personal stories and photos online, according to the complaint. "Companies must provide parents with the opportunity to say 'no thanks' to the collection and disclosure of their children's personal information," said FTC Chairman Jon Leibowitz. "Children's privacy is paramount, and Iconix really missed the boat by denying parents control over their kids' information online.""

Heartland Payment Systems Inc. said it was experiencing losses this quarter as a direct result of a massive data breach it disclosed in January when investigators discovered a malicious program sniffing credit card data passing through its systems. The company said it took a $2.5 million loss for the quarter as a result of spending more than $12.6 million in legal bills, fines from MasterCard and Visa and administrative costs. The announcement was made during the company's financial earnings call, where Carr said the costs associated with the breach could continue to climb. "Our defense of the claims regarding the processing system intrusion remains ongoing," he said. "Much of the legal work remains to be done and it is difficult to anticipate when these matters will come to a conclusion." Carr also admitted for the first time that since the Princeton, N.J.-based processing giant announced a breach of its systems, some of the payment processor's clients have switched to competitors as a result of the breach. He said some competing processors resorted to scare tactics. "We have had many competitors that have been very supportive and professional, and we certainly don't want to tar all of our competitors with the same brush," Carr said. "We have had some competitors telling merchants falsely that they would be fined $10,000 a day if they stay with Heartland. We think we're through the worst of that." Car said less than $1 million of the breach costs were fines levied by MasterCard and Visa against the company's sponsored banks. The fines are being contested, he said. More than $500,000 relates to a fine assessed by MasterCard against the sponsored banks in which the card company said Heartland failed to take appropriate action upon learning that a breach was suspected. Carr said the fine is in direct violation of both the MasterCard rules and law.