Health Care

YouTube fined $170 million for violations of children’s privacy

YouTube fined $170 million for violations of children’s privacy”

The $170 million breaks down into two parts: $136 million will be paid to the FTC and the remaining $34 million will go to NY on allegations the video-sharing site violated the Children's Online Privacy Protection Act (COPPA) Rule, which was enacted in 1998 under President Clinton.

The settlement with the FTC and the NY attorney general's office, which will receive $34 million, is the largest since a law banning collecting information about children under age 13 came into effect in 1998. The company also launched a website version of the service in August.

"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".

The FTC found that YouTube violated a law that requires parental consent before companies can collect children's personal information.

The companies allegedly collected information of children viewing videos on YouTube by tracking users of channels that are directed at kids.

Google already does that on its kids-specific site, YouTube Kids.

"YouTube touted its popularity with children to prospective corporate clients", FTC Chairman Joe Simons said in a statement.

FTC's Bureau of Consumer Protection director Andrew Smith said at a news conference Wednesday the settlement "is changing YouTube's business model, that YouTube can not bury its head in the sand, YouTube can not pretend that it is not aware of the content on its platform and hope to escape liability".

In addition to the monetary fine, the proposed settlement requires the company to refrain from violating the law in the future and to notify channel owners about their obligations to get consent from parents before collecting information on children. The children's version does track information about what kids are watching in order to recommend videos.

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Videos clearly aimed at children - say, nursery rhyme singalongs or alphabet review - won't carry personalized ads, even if the viewer is an adult, according to the company.

The vote was 3-2 by the FTC commissioners, with Simons and the two other Republicans approving the terms of the settlement and the two Democrats opposing them.

FTC commissioners Rebecca Slaughter and Rohit Chopa also issued dissenting statements insisting the penalties did "not go far enough" for YouTube's "extremely serious" privacy violations.

"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.

Indeed, the fine will barely dent Google's finances.

"Experts who study and advocate for the safety of children online decried reports of the FTC's settlement with Google that circulated last week". Google's parent company, Alphabet, made a profit of $30.7 billion on revenue of $136.8 billion past year. "We will also stop serving personalised ads on this content entirely, and some features will no longer be available on this type of content, like comments and notifications".

The FTC settlement asserted Wednesday that YouTube failed both tests after years of claiming that its site was not directed toward children and hence not covered by COPPA.

The $136m fine is the largest penalty collected under COPPA since the law was enacted in 1998, and is considerably larger than the previous record fine of $5.7m, given to video site TikTok in February.

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