Google and YouTube will have to pay out $170m, split between the FTC and the state of New York, over child privacy violations.
The US Federal Trade Commission (FTC) has announced that Google and its subsidiary YouTube will be forced to pay a “record” $170m fine for child privacy violations.
This development settles allegations made by the FTC in conjunction with the New York attorney general that the video-sharing service “illegally collected personal information from children without their parents’ consent”. The FTC alleges that in doing this, YouTube violated the Children’s Online Privacy Protection Act (COPPA).
Google and YouTube will pay $136m to the FTC and an additional $34m to the state of New York. It is, according to the FTC, the largest amount ever obtained in a COPPA rule and possibly one of the largest fines ever levelled against Google, far exceeding the proposed fine of $57m meted out by French authorities earlier this year.
The COPPA rule requires that websites geared towards children provide notice of their data practices and obtain parental consent before collecting any information on children under the age of 13. This includes the use of persistent identifiers to track a user’s internet browsing habits for targeted advertising.
Third-parties, such as advertising networks, are also held to the COPPA rule when they knowingly collect personal information from users of, what the FTC calls, “child-directed websites and online services”.
In its complaint filed against YouTube, the FTC and the New York attorney general allege that the video platform collected information through online trackers, also known as cookies, without parental consent. YouTube allegedly earned millions by using cookies to deliver targeted ads.
“YouTube touted its popularity with children to prospective corporate clients,” said FTC chair Joe Simons. “Yet when it came to complying with COPPA, the company refused to acknowledge that portions of its platform were clearly directed to kids. There’s no excuse for YouTube’s violations of the law.”
Though YouTube’s platform has broad appeal to both adults and children, certain channels are, the complaint continues, specifically geared to young children.
The complaint maintains that YouTube also marketed itself as a top browsing destination for kids when pitching itself to prospective advertisers such as Mattel and Hasbro, and even dubbed itself the “[number one] website regularly visited by kids” in a meeting with the latter.
In addition to the fine, the proposed settlement requires Google and YouTube to develop and maintain a system that allows channel owners to identify child-directed content so that YouTube can ensure it is COPPA-compliant. The settlement also compels YouTube and Google to inform channel owners that content geared towards children is subject to COPPA and provide annual training in COPPA compliance for employees that deal with these channel owners.
Is the fine sufficient?
Since reports first emerged that YouTube and Google were in talks to settle an investigation, many have been concerned that the fine is but a “nominal fee”. Despite being significant relative to other fine amounts meted out previously, it pales in comparison to the revenue that YouTube and Google’s parent company, Alphabet, has earned in recent years.
Deputy director of the Center for Digital Democracy, Katharina Kopp, decried the fine as “woefully low” and her colleague, Jeff Chester, said: “The punishment should’ve been at least half a billion dollars. It’s scandalous. It sends the signal that you can, in fact, break a privacy law and get away largely scot-free.”