Google and its subsidiary YouTube have agreed to pay USD 170 million to settle allegations by the Federal Trade Commission and the New York Attorney General that YouTube illegally collected personal information from children without their parents’ consent. This is the largest fine ever under the Children’s Online Privacy Protection Act, first passed in the US in 1998.
The regulator found that YouTube collected personal information on viewers of child-directed channels, without first notifying parents and getting their consent. The FTC said YouTube "earned millions of dollars" by using the personal data from cookies to deliver targeted ads to the viewers.
The COPPA requires that child-directed websites and online services provide notice of their information practices and obtain parental consent prior to collecting personal information from children under 13, including the use of cookies to track a user’s browsing habits for targeted advertising. In addition, third parties, such as advertising networks, are also subject to COPPA where they have actual knowledge they are collecting personal information directly from users of child-directed websites and online services.
The FTC said Google resisted the notion that YouTube fell under the COPPA, claiming it was a general interest site. However, the company particularly marketed its children's audience to potential advertisers, while also pulling out specific content for its YouTube Kids app, the investigation found.
In addition to the monetary penalty, the proposed settlement requires Google and YouTube to develop and maintain a system that permits channel owners to identify their child-directed content on the YouTube platform so that YouTube can ensure it is complying with COPPA. In addition, the companies must notify channel owners that their child-directed content may be subject to the COPPA obligations and provide annual training about complying with COPPA for employees who deal with YouTube channel owners.
No personal ads on kids content
Google announced changes to YouTube to comply with the settlement. Within the next four months, it will start assuming anyone watching children's content on the site is a child and as such subject to the COPPA requirements. This means the company will limit data collection and use on videos made for kids only to what is needed to support the operation of the service. Google will also stop serving personalized ads on this content entirely, and some features will no longer be available, such as comments and notifications.
Creators will be responsible for flagging what is children's content, and Google will also use machine learning to find videos that clearly target young audiences, for example those that have an emphasis on kids characters, themes, toys, or games.
The company recommends the use of its YouTube Kids service to ensure children are watching appropriate content. It's also setting up a USD 100 million fund to support the creation of "quality kids, family and educational content", to be disbursed over the next three years.
