Google to pay $170m fine for collecting YouTube data from kids

WASHINGTON: Google agreed Wednesday to pay $170 million to settle charges that it illegally collected and shared data from children on its YouTube video service, a deal critics said was too soft on the internet giant.

The settlement with the Federal Trade Commission and the New York state Attorney General is the largest amount in a case involving the Children´s Online Privacy Protection Act, a 1998 federal law, officials said.

Officials said YouTube violated the law that requires child-directed websites and online services to obtain parental consent prior to collecting personal information from children under 13 which may be used for advertising.

The company marketed itself as a destination for children and benefitted by selling advertising to toymakers and others seeking to connect with young audiences, according to the FTC. FTC chairman Joe Simons said the settlement "prevents YouTube and Google from turning a blind eye to the existence of kids-directed content" on its platform.

Simons said the settlement makes Google liable for violations by third-party content creators, going beyond federal law that requires the platform to have knowledge that videos are directed at children.

"No other company in America is subject to these requirements," he said. Letitia James, the New York attorney general, said the deal calls for "major reforms" to YouTube´s business practices in addition to the fines.

"Google and YouTube knowingly and illegally monitored, tracked, and served targeted ads to young children just to keep advertising dollars rolling in," said James. YouTube outlined how it would change the way it handles children´s content under the agreement.

"We will treat data from anyone watching children´s content on YouTube as coming from a child, regardless of the age of the user," YouTube chief Susan Wojcicki said in a statement. "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. 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."

Wojcicki added that Google would create a $100 million fund "dedicated to the creation of thoughtful, original children's content on YouTube and YouTube Kids globally." The settlement, which must be approved by a federal court, calls for the FTC to receive $136 million and New York state the remaining $34 million. The deal was approved by a 3-2 vote of the FTC commissioners, with the two Democrats calling for tougher penalties.