YouTube violated the Children's Online Privacy Protection Act by collecting user information from kids using the platform in order to create targeted ads towards kids. CNN Business reports that on Wednesday September 4th, 2019, Google reached a settlement with the Federal Trade Commision and have agreed to pay a record $170 million penalty for breaking the law by selling ads targeted to children.
The Children’s Online Privacy Protection Act (COPPA) is a law that specifies that websites must require parental consent for the collection of use of any personal information of children under 13 who are using the Internet.
For a company like Google, paying the FTC millions probably won’t hurt the tech giant that much. In fact, according to CNN business, “Google’s $170 million payment reflects less than 1 percent of the company’s quarterly advertising revenue.”
Those who will be affected most by this decision will mostly likely be the creators of children’s videos on YouTube. Channels and businesses that make a living by monetizing their videos on YouTube through advertising will no longer be able to do so if their audience is primarily children or if their videos focus on children’s characters, themes, toys or games.
“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," Google said in a blog post, "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."
However, Google does recognize that this will have a negative impact on children’s content creators on YouTube. In efforts to help those affected adjust to the changes, Google will be providing resources to help as well as investing $100 million in a fund dedicated to the creation of original children’s content on Youtube and YouTube kids globally, according to their blog post.
It’s too soon to tell whether or not this settlement will solve the issues involving COPPA violations by tech giants. In fact, two FTC commissioners voted against the settlement in a 2-3 vote because they felt that it failed to hold company executives personally accountable for COPPA violations, according to CNN Business. Simply slapping Google with a fine instead of offering a permanent solution concerns those who are opposed.
On the other hand, those in favor of the settlement were afraid that if they were to take Google to court, they might not have a chance to protect children if the FTC didn’t come out on top.
This settlement marks the first time big tech has received a mandated requirement to seek knowledge of whether or not content is directed towards children. It has the potential to set an example for how similar cases will be dealt with in the future. For now, we will just have to wait to see if the changes YouTube promises will comply with the FTC.
If your company is struggling with FTC compliance issues or you are unsure if you are compliant, get in contact with our advertising law attorneys today.