Google on Wednesday agreed to pay US$170 million to settle charges that it illegally tracked and targeted children on its YouTube video service, a deal that critics said was too soft on the Internet giant.
The settlement with the US Federal Trade Commission (FTC) and the New York State attorney general is the largest amount in a case involving the US Children’s Online Privacy Protection Act, a 1998 federal law, officials said.
YouTube breached regulations that require child-directed Web sites and online services to obtain parental consent prior to collecting personal information from children under 13 that might be used for advertising, officials said.
The agreement settles Google’s liability over videos directed at kids even if produced by others for the video-sharing platform.
Critics of the Internet giant said that YouTube marketed itself as a destination for children and benefited by selling advertising to toymakers and others.
Commission chairman Joe Simons said that the settlement “prevents YouTube and Google from turning a blind eye to the existence of kids-directed content” on its platform.
The settlement makes Google liable for breaches by third-party content creators, going beyond federal law that requires the platform to have knowledge that videos are directed at children, Simons said.
“No other company in America is subject to these requirements,” he said.
New York Attorney General Letitia James said that the deal calls for “major reforms” to YouTube’s business practices in addition to the fines.
“Google and YouTube knowingly and illegally monitored, tracked and served targeted ads to young children just to keep advertising dollars rolling in,” James said.
YouTube outlined how it would change the way it handles children’s content under the agreement.
“We will treat data from anyone watching children’s content on YouTube as coming from a child, regardless of the age of the user,” YouTube chief executive officer Susan Wojcicki said in a statement. “This means that we will limit data collection and use on videos made for kids only to what is needed to support the operation of the service. We will also stop serving personalized ads on this content entirely, and some features will no longer be available on this type of content, like comments and notifications.”
Google would create a US$100 million fund “dedicated to the creation of thoughtful, original children’s content on YouTube and YouTube Kids globally,” Wojcicki said.
The settlement, which must be approved by a federal court, calls for the commission to receive US$136 million and New York State the remaining US$34 million. The deal was approved by a 3-2 vote.
Activists who last year filed a complaint against YouTube said the deal falls short.
“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 of the Center for Digital Democracy, one of the groups in the complaint.
However, the “paltry financial penalty of [US]$170 million” is a mere slap and “sends a signal that if you are a politically powerful corporation, you do not have to fear any serious financial consequences when you break the law,” Chester said.
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