Google to pay $170 million for violating kids’ privacy on YouTube

Google will pay a record $170 million fine to settle a lawsuit filed by federal and state authorities that charged the internet giant with violating children’s privacy on YouTube, the Federal Trade Commission said Wednesday.

The settlement requires Google and YouTube to pay $136 million to the FTC and $34 million to New York state for violating the Children’s Online Privacy Protection Act, or COPPA, by collecting personal information from children without their parents’ consent.

The FTC and the New York attorney general alleged in a complaint that YouTube gathered children’s personal information by using “cookies,” or personal identifiers, that track users online. According to the suit, YouTube earned millions of dollars by using the information to deliver targeted ads to kids.

COPPA requires online websites to obtain parental consent prior to collecting kids’ online usage information. The FTC and New York Attorney General Letitia James said that, while YouTube claimed it caters to a general audience, many of its online channels are aimed at children under the age 13. That requires the service to comply with COPPA guidelines.

“YouTube touted its popularity with children to prospective corporate clients,” FTC Chairman Joe Simons said in a statement. “Yet when it came to complying with COPPA, the company refused to acknowledge that portions of its platform were clearly directed to kids.”

For example, a toymaker with a YouTube channel could track people who viewed its videos to send ads for its own products that are targeted to children. The complaint said that Google and YouTube told toymaker Mattel that YouTube “is today’s leader in reaching children age 6-11 against top TV channels.” It also said that the companies told Hasbro that YouTube is the “#1 website regularly visited by kids.”

But when it came to advertisers, the FTC alleged that YouTube told at least one marketer that the video-search company need not comply with COPPA, as it did not have users under the age of 13 on the platform.

Attorney Christopher Vernon, a partner at the Vernon Litigation Group, has his concerns for the online safety of kids. He said a penalty of this magnitude sends a strong signal about the importance of children’s privacy. However, it is not enough.

“They’re just making so much money, directly or indirectly by using this information,” Vernon said, “and they’re not paying for it.”

Before Google’s settlement, the most substantial civil FTC penalty for a children’s data-privacy case was a $5.7 million for a case in February involving social media app TikTok. However, critics say Wednesday’s settlement still amounts to a drop in the bucket for Google, whose parent company Alphabet was sitting on $121 billion in cash and securities at the end of June.

Creators will now have to tell YouTube if their content targets kids and the video-sharing site can not track for ads or allow kids to comment on videos without parents’ consent. As the rules catch up, Vernon said parents need to help their kids better understand the consequences.

“Alert them that a lot of these companies are taking advantage of them,” Vernon said. “And it almost needs to become cool to protect your privacy.”

YouTube response

YouTube responded to the FTC charges Wednesday in a blog post outlining the data privacy changes it will make on its video search platform starting in about four months. The tech company said it will treat data from anyone watching children’s content on the website as “coming from a child, regardless of the age of the user.”

The company also said it will stop delivering personalized ads on children’s content entirely. It will also hide some features on kid’s channels, such as “likes” and notifications that could influence children’s usage. Content creators will also be required to specify whether their content is for children. And YouTube said it will use artificial intelligence to identify videos that target children with markers such as toys, kids’ characters or games.

“We’ll continue working with lawmakers around the world in this area, including as the FTC seeks comments on COPPA,” YouTube CEO Susan Wojcicki said in the corporate blog post. “And in the coming months, we’ll share details on how we’re rethinking our overall approach to kids and families, including a dedicated kids experience on YouTube.”