YouTube Hit With Biggest Fine in FTC History

The Federal Trade Commission (FTC) and the New York Attorney General just levied the largest fine in FTC history: $170 million to Google LLC and its subsidiary, YouTube LLC. The fine is for illegally collecting personal information about children without the consent of their parents. The company will pay $136 million to the FTC and $34 million to New York for violating the Children’s Online Privacy Protection Act (COPPA) Rule.

YouTube makes money by collecting data on people’s viewing habits and then selling that data to advertisers. Their children’s content is a major part of the site but, according to COPPA, websites are required to inform parents of the fact that they’re collecting data on children younger than 13. Despite the company’s argument that they are for people of all ages, the FTC and New York Attorney General proved that they purposefully targeted children.

“YouTube touted its popularity with children to prospective corporate clients,” said FTC Chairman Joe Simons. “Yet when it came to complying with COPPA, the company refused to acknowledge that portions of its platform were clearly directed to kids. There’s no excuse for YouTube’s violations of the law.”

YouTube reportedly told the toy company Mattel that “YouTube is today’s leader in reaching children age 6-11 against top TV channels” and told Hasbro that YouTube is the “#1 website regularly visited by kids.” The company also had reports from channel owners that their content targeted children and a rating system that automatically and manually reviewed children’t content. The combination of those statements and those actions make it clear that YouTube was collecting and selling data about children’s viewing habits on the site.

While the fine was the largest COPPA fine ever issued, it’s a drop in the bucket for Google’s parent company, Alphabet, Inc., which reported a projected $9.95 billion revenue for 2019.

“The F.T.C. let Google off the hook with a drop-in-the-bucket fine and a set of new requirements that fall well short of what is needed to turn YouTube into a safe and healthy place for kids,” Senator Edward J. Markey, Democrat of Massachusetts said in a statement to The New York Times.

The other requirements of the settlement may, however, have an actual impact on YouTube’s practices In addition to the fine, the settlement also requires that YouTube create a policy where they ask people are asked if they are uploading content for children. If they say they are, YouTube will automatically change data-sharing and ad-targeting procedures for that content. They’re also being required to notify creators when their content may be subjected to COPPA rules and to provide training for YouTube employees who work with YouTube channel owners.

Critics argue that the requirements are simply making YouTube follow the law that they’d already broken.

“Merely requiring Google to follow the law, that’s a meaningless sanction,” said Jeffrey Chester, the executive director of the Center for Digital Democracy, told The Times. “It’s the equivalent of a cop pulling somebody over for speeding at 110 miles an hour, and they get off with a warning.”

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