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Home / Business / Google and the FTC reach $ 170 million settlement over alleged YouTube violations of children's privacy

Google and the FTC reach $ 170 million settlement over alleged YouTube violations of children's privacy



The settlement involves the largest ever penalty under the children's online privacy law, which YouTube allegedly violated by gathering user information from children to provide fuel to the behavioral advertising business. And it can affect the strategies of all YouTube children's video creators, including big companies like Mattel ( MAT ) and Hasbro (] HAR ) according to federal officials.
Announcement marks the second time in two months that the FTC has beaten a major tech company with a major fine after the commission announced a $ 5 billion settlement with Facebook ( FB ) and privacy expires in July. And it highlights the immense power of digital advertising and personal data, which the combination has made Google ( GOOG ) and Facebook two of the most dominant players in the marketing economy. Google's $ 1
70 million payment reflects less than 1 percent of the company's quarterly advertising revenue.

"We know how important it is to give kids, families, and family creators the best YouTube experience possible, and we're committed to getting it right," Google said in a blog post about the settlement.

Google also said in its blog post that it will use machine learning algorithms to proactively identify children's content on the platform, and that data from anywhere from four months to four months will be treated as if it came from a child view. .

"This means we will limit data collection and usage on videos made for children only to what is needed to support the operation of the service," Google said. "We will also stop showing personalized ads on this content completely, and some features will no longer be available on this type of content, such as comments and notifications."

Some critics, including a number of FTC commissioners, say the settlement with YouTube does not go far enough.

Under the FTC settlement, which also involves the office of New York state attorney Letitia James, Google will pay $ 136 million to the federal government and $ 34 million to the state of New York. YouTube will also be forced to require child video producers to declare whether their content is targeted at children, a signal YouTube will use to stop targeted advertising to children.

"This commitment exceeds what a third party in the marketplace today is required to do," FTC Chairman Joseph Simons and Commissioner Christine Wilson said in a joint statement. "It represents the first and only imposed requirement of a platform or third party to seek actual knowledge of the content of a child."

For years, privacy advocates have complained that YouTube is inappropriately targeting children with advertising on the platform. The FTC claimed in its complaint that Google knew that children were watching YouTube because it promised Mattel that it could help the company reach children as young as 6 years old on the platform.

In other examples, the FTC said, Google clearly knew that it could meet obligations in some cases under the Children's Privacy Act, also known as COPPA, because it told an advertiser that no child under 13 watched YouTube and its content needed not complying with COPPA.

"Google and YouTube knowingly and illegally monitor, track, and serve targeted ads to young children only to continue advertising dollars," New York City attorney Letitia James said in a statement. "These companies put children at risk and abused their power, which is why we are introducing major reforms into their practice and making them pay one of the biggest settlements for a privacy case in US history."

Wednesday's settlement, which must still be approved by a judge, marks a milestone for the roughly 20-year-old law, which prevents companies from using or sharing personal information for children under 13 without the consent of a parent.

FTC Commissioner Rebecca Slaughter said the settlement is likely to encourage large companies to make sure they comply with YouTube's new child identification system.

"They will accurately predict that their risk of COPPA liability for fraudulent content designation is high," Slaughter wrote in a statement.

But Slaughter added that the settlement does not include a mechanism to ensure that YouTube actually enforces its new content creator rules, saying that it constitutes a voluntary self-declaration that can be easily played.

"The order does not require YouTube to politicize the channels that deceive by misidentifying the content, for example by requiring YouTube to put in place a technological backstop to identify unsolicited child-directed content and turn off behavioral advertising," she says. was one of two FTC commissioners who voted against the settlement. The other, FTC Commissioner Rohit Chopra, said the agency failed to hold the company's executives personally responsible for the COPPA violation, beating Google with a fine that "still allows the company to serve on the offense. "

The FTC voted 3- 2 to approve the settlement, with both agency Democrats disagreeing.

Wednesday's announcement" reiterates many of the same mistakes from the defunct Facebook settlement, "Chopra added, as he also voted against, believing it was too weak.

In response, Simons and Wilson said the agency had to balance if the settlement was a better deal than the FTC could have obtained by taking Google for the court, an uncertain bet.

"We choose not to gamble the protection of children now in the hope of hitting a jackpot in the future," they wrote.

Consumer groups said they were happy that the FTC was working to keep YouTube in check, but worried that the penalties would be inadequate.

"A weak financial penalty of $ 170 million – from a company that earned nearly $ 137 billion in 2018 alone – sends a signal that if you are a politically powerful company, you do not have to fear any serious financial consequences when you violates the law, "said Jeff Chester, executive director of the Center for Digital Democracy, one of nearly two dozen groups that filed a complaint on YouTube to the FTC in April last year.

YouTube has repeatedly struggled with how to handle controversial content aimed at children. In response to complaints about videos showing children violent, disturbing or conspiratorial images, YouTube began to consider changes to children's videos such as preventing one video from automatically moving on to the next.

Meanwhile, the FTC has announced that it is periodically reviewing its rules under the COPPA to ensure that it effectively protects children.


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