The fine is the largest the agency has levelled against Google. (Reuters: Dado Ruvic/Illustration)
Google’s video site YouTube has been fined $US170 million ($250 million) to settle allegations it collected children’s personal data without their parents’ consent.
- YouTube says its service is intended for kids at least 13 years old, but many younger kids also visit the site
- The FTC’s complaint details Google’s mixed messages about who the site is geared to
- It is the third time the FTC has sanctioned Google for privacy violations since 2011
The US Federal Trade Commission (FTC) fined Google $US136 million ($200 million) and the company will pay an additional $US34 million ($50 million) to New York state to resolve similar allegations.
The fine is the largest the agency has levelled against Google, although it is only a fraction of the $US5 billion ($7.4 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 the age of 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 was 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, in which 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 ‘baited kids with nursery rhymes’
FTC’s Joe Simons said YouTube “refused to acknowledge that portions of its platform were clearly directed to kids.” (AP: Andrew Harnik)
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 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.
The settlement was approved in a 3-2 vote by the FTC, with Mr Simons and the two other Republicans voting for, 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 behavioural advertising business,” Mr 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”.
‘Paltry’ fine sends wrong signal to powerful corporations
Facebook was fined $7.4 billion earlier this year for privacy violations. (Reuters: Aaron P. Bernstein)
A coalition of advocacy groups that last year helped trigger the FTC’s investigation said in a joint statement on Wednesday (local time) that the outcome would reduce the amount of behavioural advertising targeting children.
But they said it did not 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 Centre for Digital Democracy.
But he said the “paltry” fine sent a signal that politically powerful corporations did not have to fear serious consequences for breaking the law.
Google’s parent company, Alphabet, made a profit of $US30.7 billion ($45 billion) on revenue of $US136.8 billion ($201 billion) last year.
The Federal Government has increased scrutiny of big tech companies in the past two years, especially questioning how the tech giants collected and used 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 paedophiles left on innocuous family videos of kids pushed YouTube to turn off comments on nearly all videos featuring kids.
The FTC’s fine against YouTube now needs to be approved by a federal court in Washington.