Social network app Path agreed Friday to pay $800,000 to settle charges it violated privacy of young users by uploading address book information without seeking permission, officials said.
The Federal Trade Commission settlement came a year after Path co-founder and chief executive Dave Morin apologize for what he said was a "mistake."
Path has modified applications to ask users whether they would like to opt in or out of letting the service use personal contact list information to help them connect with friends or family at the social network.
Along with paying $800,000 for having "illegally collected personal information from children without their parents' permission," Path will have its privacy practices independently assessed every other year for two decades.
"This settlement with Path shows that no matter what new technologies emerge, the agency will continue to safeguard the privacy of Americans," FTC chairman Jon Leibowitz said in a release.
Contact information mined from users computers was deleted, according to the company.
"We now understand that the way we had designed our 'Add Friends' feature was wrong," Morin said when he made the public apology.
Path was launched in November 2010 by Morin, Dustin Mierau, and Napster creator Shawn Fanning.
Morin was a key engineer at social networking success story Facebook for about four years before leaving for Path.
Path's backers include actor Ashton Kutcher, Salesforce.com chief executive Marc Benioff, and Silicon Valley venture capital titan Ron Conway.
Path is based on psycho-social research indicating that individuals can't effectively manage more than 150 personal relationships.
The social network lets people use smartphones to stay in tune with intimate circles of family members and close friends who happen to be sharing their "path" at any given point in life.
"We want you to connect with fewer people, not more," Morin told AFP in an interview last year, noting that Path pages don't boast of how many friends users have.
"We think that creates a more trusted environment for you to share whatever you want," he said. "It turns out that five or so is the number of really best friends you can have and there are about 20 people you trust."