Google to pay $170 mln to settle children’s data scandal

The Federal Trade Commission and New York state will receive a total $170 million from Google as a settlement for allegations YouTube collected children’s private data illegally.

Rachel Lerman and Marcy Gordon had the news for AP:

Google will pay $170 million to settle allegations its YouTube video service collected personal data on children without their parents’ consent.

The company agreed to work with video creators to label material aimed at kids and said it will limit data collection when users view such videos, regardless of their age.

Some lawmakers and children’s advocacy groups, however, complained that the settlement terms aren’t strong enough to rein in a company whose parent, Alphabet, made a profit of $30.7 billion last year on revenue of $136.8 billion, mostly from targeted ads.

Google will pay $136 million to the Federal Trade Commission and $34 million to New York state, which had a similar investigation. The fine is the largest the FTC has levied against Google, but it’s tiny compared with the $5 billion fine against Facebook this year for privacy violations.

YouTube “baited kids with nursery rhymes, cartoons, and more to feed its massively profitable behavioral advertising business,” Democratic Commissioner Rohit Chopra said in a tweet. “It was lucrative, and it was illegal.”

CNN’s Brian Fugg noted:

The announcement marks the second time in two months that the FTC has slapped a big tech company with a major fine, after the commission announced a $5 billion settlement with Facebook (FB) and its privacy lapses in July. And it highlights the enormous power of digital advertising and personal data, the combination of which have made Google (GOOG) and Facebook two of the most dominant players in the marketing economy. Google’s $170 million payment reflects less than 1 percent of the company’s quarterly advertising revenue.

“We know how important it is to provide children, families and family creators the best experience possible on YouTube and we are committed to getting it right,” Google said in a blog post about the settlement.

Google also said in its blog post that it will use machine learning algorithms to proactively identify children’s content on the platform and that beginning in four months, data collected from all children’s content will be treated as though it were coming from a child viewer.

“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. “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.”

CNet’s Joan E. Solsman and Richard Nieva provided the details:

YouTube will, in effect, presume that any people watching children-directed content on YouTube are actual childen, regardless of their real age. That means it’ll limit the data it collects on those views to the bare minimum — only what’s “needed to support the operation of the service,” YouTube said. 

YouTube will also halt kids-oriented videos from having personalized ads, comments and notifications. And it’ll require that uploaders tell YouTube when a video is directed at children. These changes will take effect around the end of the year, and most of them are required by the FTC settlement. One measure — YouTube tapping machine learning to help police videos being categorized as for kids — goes beyond what the FTC requires. 

Channels that post kids videos but don’t identify them as such run the risk of getting hit with their own “aggressive” FTC fines, according to the commission. 

YouTube is the world’s biggest online video source, with 2 billion monthly users, and a huge number of the billions of videos viewed on the site are aimed at kids. One study suggests kids content may be the most-watched video category on YouTube overall.