Google to pay $170M to settle YouTube case
Critics slam FTC fine over violations in children’s privacy
WASHINGTON — 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.
Democrats and children’s advocacy groups, however, complained that 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.
FTC Consumer Protection Director Andrew Smith, who defended the fine amid criticism that it was too small, called the penalty historic.
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 leveled against Google, although it is tiny compared with the $5 billion fine imposed against Facebook this year for privacy violations.
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. In YouTube’s lengthy terms of service, those who are under 13 are simply asked, “please do not use the Service.”
But younger kids commonly watch videos on YouTube, and 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. Yet from an advertising standpoint, YouTube targeted ads to those kids just as they would adults.
“YouTube touted its popularity with children to prospective corporate clients,” FTC Chairman Joe Simons said. Yet when it came to complying with the law, he said, “the company refused to acknowledge that portions of its platform were clearly directed to 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 personal information they 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 that 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, it will also limit targeting on its main service for videos meant for kids. Google is relying on video creators to label such items, though it will also employ artificial intelligence to help.
YouTube won’t seek parental consent there, however, even on videos intended for children. The company is avoiding that precaution by instead turning off any personal tracking on those videos, saying it will collect only what is needed to make the service work.
The settlement now needs to be approved by a federal court in Washington.