YouTube is facing a fine of up to $200m, which is the equivalent of two to three months of the company’s ad revenue.
On 30 August, Politico reported that YouTube reached an agreement to pay between $150m to $200m to resolve a Federal Trade Committee (FTC) investigation into the company.
The investigation dealt with allegations that YouTube had violated children’s privacy law by collecting personal information about minors and using it to target advertisements, without getting consent from parents.
Bloomberg reported that this represents the most significant US enforcement action against a Big Tech company in the past five years over practices relating to minors.
The FTC voted 3-2 along party lines to approve the settlement and it will now go through the US justice department’s review process.
In a similar case, with a considerably smaller penalty, the FTC targeted TikTok in February of this year for violating the 1998 Children’s Online Privacy Protection Act (COPPA).
‘Let a powerful company off the hook’
Although YouTube’s fine is more significant than TikTok’s $5.7m penalty, many children’s privacy advocates and commentators believe that the fines should have gone further.
Alphabet, which is the parent company of YouTube and Google, reported that its earnings over the past three calendar years have amounted to $63bn.
Josh Golin, from Campaign for a Commercial-Free Childhood, noted that the fine is the equivalent of two to three months of YouTube ad revenue.
US senator Ed Markey said: “Once again, this FTC appears to have let a powerful company off the hook with a nominal fee for violating users’ privacy online. We owe it to kids to come down hard on companies that infringe on children’s privacy and violate federal law.”
Deputy director of the Center for Digital Democracy, Katharina Kopp, remarked that the fine was “woefully low” when the company’s profit from the violation is taken into consideration.
Jeff Chester, also from the Centre for Digital Democracy, added: “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.”
Consumer advocacy group Public Citizen said: “Under COPPA, the children’s privacy law, the FTC had authority to impose tens of billions in fines against Google. A penalty of no more than $200m utterly fails to protect children’s rights. It neither punishes Google adequately nor deters Google or other companies from future violations.”
Marc Rotenberg, president of the Electronic Privacy Information Center, said: “The critical challenge for the FTC is whether it has the ability to restrain business practices that violate privacy. Imposing large fines does not address that problem.”
Back in July, the FTC fined Facebook $5bn after investigating how the social media site had been handling user data. Similar concerns were raised by critics who believed the fines levied against Facebook were insubstantial, but the case also resulted in the introduction of new privacy requirements for the company.