Google Fined $170M By FTC Over Accusations Of Child Privacy Violations By YouTube

Alphabet Inc GOOGL GOOG has been slapped with a $170-million fine for illegally collecting the personal information of kids without parental consent, the Federal Trade Commission said in a statement Wednesday. 

This is the latest of the data and privacy scandals that have come to plague social media companies in recent years.

The allegations were jointly brought by the FTC and New York state in connection with the Children's Online Privacy Protection Act, or COPPA, Rule.

The COPPA rule mandates that child-directed websites and online services should notify the parents and obtain their consent before collecting personal information from children under 13.

The Charges And The Fine

The FTC said Google's YouTube video sharing website collected personal information in the form of persistent identifiers used to track users across the internet from viewers of child-directed channels without the consent of parents.

"YouTube earned millions of dollars by using the identifiers, commonly known as cookies, to deliver targeted ads to viewers of these channels," the FTC and the New York Attorney General said. 

Of the $170 million fine, $136 million is due to the FTC and the remaining $34 million is due to New York, according to the settlement agreement.

The $136-million penalty is by far the biggest amount the FTC has obtained in a COPPA case since the law was enacted in 1998, the regulatory agency said.

YouTube said in a Wednesday statement that, starting in about four mounths, the platform will begin treating data from anyone watching children's content as coming from a child regardless of the user's age. 

The platform will increase its promotion of YouTube Kids to parents and is establishing a $100-million fund to be distributed over three years "dedicated to the creational of thoughtful, original children's content on YouTube and YouTube Kids globally." 

Other Terms

Apart from the monetary penalty, the settlement agreement also requires Google and YouTube to develop and maintain a system that allows channel owners to identify their child-directed content on the YouTube platform so that YouTube can ensure compliance with COPPA.

The companies are also required to notify channel owners about their child-directed content being subject to COPPA and also train employees who deal with these YouTube channel owners.

"The settlement also prohibits Google and YouTube from violating the COPPA Rule, and requires them to provide notice about their data collection practices and obtain verifiable parental consent before collecting personal information from children," the statement said.

At last check, Class A shares of Google were adding 0.59% to $1,176.50.

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