In brief: COPPA rules mandate that child-directed websites and services must provide notice of their information practices and obtain parental consent before collecting information from children under the age of 13. The complaint alleged that YouTube used tracking cookies to deliver targeted ads to viewers of kid-focused channels like those operated by toy companies, earning millions of dollars in the process.
Google and its video sharing subsidiary have agreed to pay a record $170 million fine to settle claims by the Federal Trade Commission and the New York Attorney General that YouTube illegally collected personal information from children without their parents' consent.
The FTC approved the settlement in a 3 to 2 vote and will receive $136 million which is by far the largest amount the commission has ever collected related to a Children's Online Privacy Protection Act (COPPA) case since it was enacted roughly 20 years ago. The previous record was a fine of just $5.7 million levied against social video sharing app TikTok.
New York will collect the remaining $34 million in penalties.
According to the FTC, Google and YouTube used these kid-focused channels to market to makers of toys. The two reportedly told Hasbro that YouTube is the "#1 website regularly visited by kids." Mattel was told that "YouTube is today's leader in reaching children age 6-11 against top TV channels."
In addition to the monetary penalty, Google and YouTube must also develop, implement and maintain "a system that permits channel owners to identify their child-directed content on the YouTube platform so that YouTube can ensure it is complying with COPPA." Channels catering to children will also be notified that their content may be subject to the COPPA Rule's obligations and employees who deal with these channels will be provided annual training about complying with COPPA.
Masthead credit: Child watching YouTube by Thais Ceneviva. Settlement by TungCheung