Google to pay $170-m fine for collecting YouTube data from children

FTC chairman Joe Simon speaks during a press conference at FTC headquarters in Washington DC

The fines include $136 million for the most recent charges, while the company will pay another $34 million to settle similar claims brought previously by NY state's attorney general, the Federal Trade Commission (FTC) announced on Wednesday.

Google-owned YouTube will pay a historic $170 million fine to settle allegations that it illegally collected children's personal information without parental consent, the Federal Trade Commission announced Wednesday. "There's no excuse for YouTube's violations of the law".

Regulators charged that Google knew certain YouTube channels were popular among younger viewers, touted this fact to brands and advertisers, and tracked kids' viewing histories for the goal of serving them targeted advertisements, ultimately raking in "millions of dollars" as a result of its repeated violations of federal children's privacy laws.

Kids under 13 are protected by a 1998 federal law that requires parental consent before companies can collect and share their personal information.

The settlement with the FTC and the NY attorney general's office, which will receive $34m (€31m), is the largest since a USA law banning collecting information about children under age 13 came into effect in 1998.

The consumer protection agency started investigating Google into whether YouTube, a Google subsidiary, violated the Children's Online Privacy Protection Act (COPPA).

The fine is the largest the agency has levelled against Google, although it is tiny compared with the $5 billion fine the FTC imposed against Facebook this year for privacy violations.

"For the third time since 2011, the Federal Trade Commission is sanctioning Google for privacy violations", Chopra wrote in his dissent. "When Google pays a fine and still profits from misconduct, this is not a penalty". First, limiting the amount of data being collected on anyone watching children's content means YouTube will have less information on users to target ads.

Wojcicki added that Google would create a $100 million fund "dedicated to the creation of thoughtful, original children's content on YouTube and YouTube Kids globally".

Google already does that on its kids-specific site, YouTube Kids.

The settlement also calls for YouTube to change the way it handles children's content.

"The FTC's complaint details Google's mixed messages about whom the service is geared for and includes as evidence Google presentations made to toy companies Mattel and Hasbro where YouTube is described as the "new Saturday Morning Cartoons" and the "#1 website regularly visited by kids".

It may also financially hit so-called "influencers" and "creators" who make videos aimed at children hard, as the videos won't be as lucrative without personalised advertising, comments and notifications. Not only are comments rich with data collection opportunities, but they frequently veer into clearly offensive territory for adults and children alike.

YouTube does not require a user to register in order to view videos, the complaint (PDF) points out. Google's $170 million payment reflects less than 1 percent of the company's quarterly advertising revenue. This settlement will cut advertising revenue for creators of child-directed content by more than half. "We recognize this won't be easy for some creators and are committed to working with them through this transition and providing resources to help them better understand these changes", wrote Wojcicki.

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