Google Fined $170M for Violating Children's Privacy Law on YouTube

Youtube Cleanup_Illo - THR - H 2019

YouTube has agreed to treat all data harvested from watching children's content as coming from a child, regardless of age.

Google has agreed to pay a $170 million fine levied by the Federal Trade Commission and the New York Attorney General over its collection of personal information from children on its YouTube video streaming site to target advertisements toward them. 

The settlement is the latest effort by federal regulators to enforce privacy protections for Internet users, and it comes with a series of requirements for Google-owned YouTube to strengthen its policies around minors on its platform. 

The FTC and NY Attorney General allege that YouTube violated the Children's Online Privacy Protection Act, known as COPPA, by harvesting personal information of children under 13 to serve targeted ads to them without receiving consent from their parents. 

“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.”

The complaint specifically sites problematic marketing efforts targeted at Mattel and Hasbro that described YouTube as "today’s leader in reaching children age 6-11 against top TV channels” and the “#1 website regularly visited by kids.” It also says the Mattel and Hasbro channels, along with Cartoon Network, Dreamworks and others, have raked in more than $50 million from behavioral advertising. The settlement will require Google and YouTube to implement a system that lets such channel owners designate their content as child-directed.

In a joint statement with commissioner Christine Wilson, Simons touts the severity of the penalty. "The $170 million total monetary judgment is almost 30 times higher than the largest civil penalty previously imposed under COPPA," they said. "This significant judgment will get the attention of platforms, content providers, and the public."

Two commissioners, Rebecca Kelly Slaughter and Rohit Chopra, feel the settlement wasn't tough enough and voted against it. Slaughter wanted stronger injunctive relief that would require YouTube to police channels that mis-designate children's content in an effort to circumvent the law. Meanwhile, Chopra notes that this is the third time since 2011 that Google has been sanctioned by the FTC and argues the financial penalty isn't enough to deter the tech behemoth from future violations.

YouTube CEO Susan Wojcicki on Wednesday issued a lengthy statement on the site's blog. "From its earliest days, YouTube has been a site for people over 13, but with a boom in family content and the rise of shared devices, the likelihood of children watching without supervision has increased," she said, before explaining a series of changes the company will make in its practices. 

The digital video giant will treat data from any YouTube user who watches children’s content as if it comes from a child, regardless of their actual age, and will stop serving personalized ads on the content. YouTube will ask creators to self-identify children’s content and use artificial intelligence to find videos that target kids.

Wojcicki also said the company plans to increase promotion of its YouTube Kids platform and will spend $100 million over the next three years on original children's content. The company will also implement mandatory annual training on children's data privacy, and the CEO says these changes are just the beginning of a larger effort. 

"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," she said. "We know how important it is to provide children, families and family creators the best experience possible on YouTube and we are committed to getting it right."

Google will pay $136 million to the FTC and $34 million to New York. The FTC is currently accepting public comments on COPPA and is set to hold a workshop Oct. 7.