×

YouTube to pay $170M fine after violating kids’ privacy law

WASHINGTON (AP) — Google will pay $170 million to settle allegations its YouTube video service collected personal data on children without their parents’ consent.

The company agreed to work with video creators to label material aimed at kids and said it will limit data collection when users view such videos, regardless of their age.

Some lawmakers and children’s advocacy groups, however, complained the settlement terms aren’t strong enough to rein in a company whose parent, Alphabet, made a profit of $30.7 billion last year on revenue of $136.8 billion, mostly from targeted ads.

Google will pay $136 million to the Federal Trade Commission and $34 million to New York state, which had a similar investigation. The fine is the largest the FTC has levied against Google, but it’s tiny compared with the $5 billion fine against Facebook this year for privacy violations.

YouTube “baited kids with nursery rhymes, cartoons, and more to feed its massively profitable behavioral advertising business,” Democratic Commissioner Rohit Chopra said in a tweet. “It was lucrative, and it was illegal.”

The federal government has increased scrutiny of big tech companies in the past two years — especially questioning how the tech giants collect and use personal information from their billions of customers. Many of the huge Silicon Valley companies are also under antitrust investigations aimed at determining whether the companies have unlawfully stifled competition.

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

Tech companies typically skirt that by banning kids under 13 entirely, though such bans are rarely enforced.

Yet many popular YouTube channels feature cartoons or sing-a-longs made for children. According to the FTC, YouTube assigned ratings to its video channels and even had a “Y” category directed at kids ages 7 or under, but YouTube targeted ads to those kids just as they would adults.

The FTC’s complaint includes as evidence Google presentations describing YouTube to toy companies Mattel and Hasbro as the “new Saturday Morning Cartoons” and the “#1 website regularly visited by kids.”

According to the settlement, Google and YouTube will get “verifiable” consent from parents before they collect or use personal information from children. The company also agreed not to use data collected from children before.

YouTube has its own service for children, YouTube Kids. The kids-focused service already requires parental consent and uses simple math problems to ensure kids aren’t signing in on their own.

YouTube Kids does not target ads based on viewer interests the way the main YouTube service does. But the children’s version does track information about what kids are watching in order to recommend videos. It also collects personally-identifying device information.

On Wednesday, Google said that starting early next year, YouTube will also limit personalized ads on its main service for videos meant for kids.

COMMENTS