The U.S. Federal Trade Commission and New Yorks attorney general on Wednesday slapped a $170 million fine and other sanctions on Google-owned YouTube over its handling of childrens data, in the latest government crackdown on the tech industrys business practices.
The settlement resolves allegations that YouTube violated a federal childrens online privacy law by tracking kids under 13 years old without their parents consent, and serving targeted advertisements to them.
Under a consent decree, YouTube will require users to self-identify whether videos they upload are meant for children, obtain parental consent before collecting personal information about kids and provide its employees with annual training on how to comply with the childrens privacy law. Google and YouTube have also agreed to no longer use personal data previously collected from kids. YouTube will pay $34 million of the $170 million fine to New York.
“This settlement achieves a significant victory for the millions of parents whose children watch child-directed content on YouTube,” Republican FTC Chairman Joe Simons and fellow GOP Commissioner Christine Wilson said in a joint statement. “It also sends a strong message to childrens content providers and to platforms.”
POLITICO reported last week the fine would range between $150 million and $200 million.
The penalties are the latest sign of regulators increased scrutiny of Silicon Valleys biggest companies. The FTC levied a $5 billion fine against Facebook in July following an investigation into the social media giants data practices. Facebook later revealed that the FTC has opened an antitrust investigation into the company, and the Justice Department announced its own broad review of the tech industrys impact on competition.
In a blog post, YouTube CEO Susan Wojcicki said in four months, the company will limit data collection on videos made for kids and stop serving personalized ads on the content. In addition to requiring users to identify videos geared toward children, the company will also use artificial intelligence to find videos that target minors, she said.
She noted the changes will have a “significant business impact” on creators of kids and family content who make money from behavioral advertising, and said YouTube will establish a $100 million fund to support “thoughtful, original” childrens content on its platforms.
“We recognize this wont 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,” Wojcicki said.
A coalition of privacy groups complained to the FTC in April 2018 that YouTube violated the Childrens Online Privacy Protection Act by collecting personal information about minors and using it to target advertisements at them without getting consent from parents. The organizations argued the company knowingly targeted children, ignoring restrictions on the collection of personal information from users under 13. The childrens privacy law, known as COPPA, went into effect nearly two decades ago.
YouTubes terms of service state it is not intended for children. But the New York attorney generals office said it discovered that a “well-known” YouTube channel operator repeatedly informed Google and YouTube that its videos were directed toward children under 13, according to a news release.
“Google and YouTube knowingly and illegally monitored, tracked, and served targeted ads to young children just to keep advertising dollars rolling in,” New York AG Letitia James, a Democrat, said in a statement. “These companies put children at risk and abused their power, which is why we are imposing major reforms to their practices and making them pay one of the largest settlements for a privacy matter in U.S. history.”
The $170 million fine on YouTube dwarfs the FTCs previous record penalty of $5.7 million for a COPPA violation. But privacy groups last week criticized the idea of a fine in the $150 million to $200 million range as amounting to pocket change for a company the size of Google.
The FTCs 3-2 vote was along party lines, with the Republican majority led by Simons voting for the settlement and the two Democratic members voting against it, in a repeat of the split commission vote over the Facebook penalty. The Democrats, Rohit Chopra and Rebecca Kelly Slaughter, have called for tougher restrictions for tech companies accused of privacy violations.
Slaughter said the FTC should require a commitment from YouTube to police the identification of childrens videos, noting the incentive for some content creators to be less than accurate in order to continue getting revenue fromRead More – Source
