Google’s YouTube Will Pay $170 Million in Fines for Violating Child Privacy Laws

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YouTube, which is owned by Google, will pay $170 million to settle claims that it violated Children’s Online Privacy Protection Act (COPPA). According to CNBC, yesterday two of the five FTC commissioners voted against it, not because they believed YouTube didn’t violate the privacy laws, but because the penalty wasn’t harsh enough. It’s interesting to note that every time FTC comes down with a penalty that’s not harsh enough, the stock market applauds the ruling and the shares of the companies go up. In July, FTC slapped a record $5 billion fine on Facebook because of the Cambridge Analytica scandal, where data from over 50 million users was used without permission. After the announcement, Facebook’s stock went up 1%, which resulted in Mark Zuckerberg making over $1 billion in 30 minutes. This time shares of Alphabet (Google’s parent company) went up 1.1% at the end of trading yesterday.

If you are not familiar with COPPA, it’s a law Congress passed in 1998 and it went into effect in 2000. It requires that “child-directed” sites to get parental consent before collecting any information about their children under the age of 13. YouTube apparently didn’t adhere to the law and is accused of tracking children’s Internet usage behavior without approval from their parents. FTC has no doubt about the severity of the violation. However, the FTC commissioners disagree on what the penalty should be for the violation.

After the news about the fine, YouTube has announced that :

Starting in about four months, we will treat data from anyone watching children’s content on YouTube as coming from a child, regardless of the age of the user. 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.

What YouTube has said sounds pretty good. However, based on the above statement, YouTube is essentially saying that their policy at this time (and for another 4 months) is that YouTube believes that because the content created for kids may be watched by both the kids and the adults, and the fact that YouTube has the right to track adults, therefore, YouTube has the right to track all kids content. Apparently, FTC didn’t buy their argument and after a $170 million fine YouTube had decided to change its tune.

YouTube suggests if parents are going to allow kids under 13 to watch YouTube on their own, kids should use YouTube Kids. It’s an app that can be downloaded from Google Play or Apple’s App Store.

Google is becoming much better at protecting people’s privacy in recent years, and especially after the French data protection watchdog fined Google $57 million under the General Data Protection Regulation (GDPR). Unlike our FTC, which is known for going easy on large corporations, the Europeans don’t mess around when it comes to privacy. YouTube is making several improvements to YouTube Kids. According to Susan Wojcicki of YouTube, “We are establishing a $100 million fund, disbursed over three years, dedicated to the creation of thoughtful, original children’s content on YouTube and YouTube Kids globally.”

YouTube has the opportunity to show the world that it’s serious about protecting not only the kids’ privacy, but everyone’s privacy. The next few years will tell if YouTube has lived up to the first sentence in it’s official blog post from yesterday, “Responsibility is our number one priority at YouTube, and nothing is more important than protecting kids and their privacy.” Let’s keep our fingers crossed.

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