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

WASHINGTON — Google’s video site YouTube has been fined $170 million to settle allegations it collected children’s personal data without their parents’ consent.

The Federal Trade Commission fined Google $136 million. The company will pay an additional $34 million to New York state to resolve similar allegations.

The fine is the largest the agency has leveled against Google, although it is tiny compared with the $5 billion fine the FTC imposed against Facebook this year for privacy violations.

The FTC has been investigating YouTube for the way it handles the data of kids under 13. Young children are protected by a federal law that requires parental consent before companies can collect and share their personal information.

YouTube has said its service is intended for ages 13 and older, although younger kids commonly watch videos on the site and many popular YouTube channels feature cartoons or sing-a-longs made for children.

The FTC’s complaint details Google’s mixed messages about who the site is geared for, and includes as evidence Google presentations made to toy companies Mattel and Hasbro where YouTube is described as the “new Saturday Morning Cartoons” and the “#1 website regularly visited by kids.”

“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 the law protecting children’s privacy, he said, “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 has its own app for children, called YouTube Kids. The company also launched a website version of the service in August. The site says it 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. The children’s version does track information about what kids are watching in order to recommend videos. It also collects personally identifying device information.

As with the Facebook settlement, the FTC vote was 3-2, along party lines. Simons and the two other Republicans voted to approve the settlement, while the two Democrats opposed it.

Commissioner Rohit Chopra, a Democrat, noted it was the third time since 2011 that the agency had sanctioned Google for privacy violations.

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

He said in his dissent that the settlement offered no individual accountability, insufficient remedies and a fine amount that “still allows the company to profit from its lawbreaking.”

A coalition of advocacy groups that last year helped trigger the FTC’s investigation said in a joint statement Wednesday that the outcome will reduce the amount of behavioral advertising targeting children. But they say it doesn’t go far enough to hold Google accountable.

“We are gratified that the FTC has finally forced Google to confront its longstanding lie that it wasn’t targeting children on YouTube,” said Jeff Chester, executive director of the Center for Digital Democracy. But he said the “paltry” fine sends a signal that politically powerful corporations don’t have to fear serious consequences for breaking the law.

Indeed, the fine will barely dent Google’s finances. Google’s parent company, Alphabet, made a profit of $30.7 billion on revenue of $136.8 billion last year.

The federal government has increased scrutiny of big tech companies in the last 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.

YouTube has faced a number of child safety issues this year. In one case, comments that pedophiles left on innocuous family videos of kids pushed YouTube to turn off comments on nearly all videos featuring kids.

The FTC imposed a smaller fine of $5.7 million on video site Musical.ly, now called TikTok, earlier this year after finding it illegally collected personal information about kids.

Google is already under a 2011 agreement with the FTC that barred it from mispresenting its privacy policy and subjected the company to 20 years of regular, independent privacy audits. Google was fined $22.5 million in 2012 for violating that settlement when the FTC found it improperly used tracking cookies on Apple’s Safari browser.

The FTC’s fine against YouTube now needs to be approved by a federal court in Washington.

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