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The Child's Online Privacy Protect Act, or COPPA, was passed in 2012, aimed at protecting the personal information of minors on the internet. Among its provisions, companies are prohibited from collecting children's personal information without their parents' consent.
According to a recent settlement announced with the Federal Trade Commission, YouTube had been violating that law while tracking viewers of child-directed content, then selling that user information to advertisers.
Under the settlement, YouTube (and parent company Google) will pay $170 million to the FTC and the State of New York. But not everyone thinks that's an adequate penalty.
"The COPPA Rule requires that child-directed websites and online services provide notice of their information practices and obtain parental consent prior to collecting personal information from children under 13," the FTC intoned in a statement, "including the use of persistent identifiers to track a user's Internet browsing habits for targeted advertising. In addition, third parties, such as advertising networks, are also subject to COPPA where they have actual knowledge they are collecting personal information directly from users of child-directed websites and online services."
According to the FTC, YouTube failed to apply COPPA protections to clearly child-directed channels, like those operated by toy companies. YouTube allegedly earned millions of dollars by using persistent identifiers (commonly known as cookies) to track viewers of child-directed channels and then deliver targeted ads to viewers of these channels.
"YouTube touted its popularity with children to prospective corporate clients," said FTC Chairman Joe Simons. "Yet when it came to complying with COPPA, 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."
But the settlement did not please privacy advocates, who viewed the fine as a slap on the wrist to a company worth around $800 billion. "Under COPPA, the children's privacy law, the FTC had authority to impose tens of billions in fines against Google," consumer advocacy group Public Citizen said in a statement. "A penalty of no more than $200 million utterly fails to protect children's rights. It neither punishes Google adequately nor deters Google or other companies from future violations."
Lawmakers were equally unimpressed. "Once again, this FTC appears to have let a powerful company off the hook with a nominal fine for violating users' privacy online," said Massachusetts Senator Ed Markey. "We owe it to kids to come down hard on companies that infringe on children’s’ privacy and violate federal law."
The settlement comes as a reminder to parents to keep a close eye on their children's internet habits. Companies like Google and YouTube are, and probably for the wrong reasons.