, the giant video site owned by Google, announced massive changes to how it treats kids videos Wednesday, as the US Federal Trade Commission hit Google with new rules and a record $170 million penalty to settle a probe into the privacy of children’s data on YouTube.
It’s the largest penalty ever levied for violations of the Children’s Online Privacy Protection Act, or COPPA. But critics — including Democratic dissenting FTC commissioners — noted that even a record-breaking penalty wasn’t enough for a company with Google’s scale. Based on Google’s performance last year, $170 million roughly equates to two days’ worth of profit. Google generates the same amount in revenue in about 11 hours.
But Andrew Smith, the director of the FTC’s Bureau of Consumer Protection, said significance goes beyond the $170 million fine, calling the settlement “a new front” in its battles to protect children’s data privacy. Wednesday’s deal settles allegations that YouTube illegally collected personal information from children without parents’ consent.
“We are holding a platform liable under COPPA for content posted by somebody else. That’s a really big deal,” he said during a press conference.
YouTube will, in effect, presume that anyone watching children-directed content on YouTube is an actual child, regardless of their real age. That means it will 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 will 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 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— and a huge amount of the billions of videos viewed there are aimed at kids. One suggests kids content may be the most-watched video category on YouTube overall. But YouTube has come under fire for a range of scandals involving kids. Wednesday’s $170 million penalty addressed the data YouTube collects about kids-video viewing without a parent’s consent. But YouTube has also faced scandals involving videos of child abuse and exploitation, nightmarish content in its YouTube Kids app and predatory comments that sexualized clips of young children.
Kid viewers and their parents won’t necessarily notice dramatic changes to the YouTube experience from these changes alone. Beyond the absence of comments and notifications, parents won’t need to worry as much about the data Google collects whenever their kids spool up a video on YouTube. The changes may mean fewer ads on kids content because most of YouTube’s ads are the personalize kind that are banned from kids content now. And the changes could mean recommendations for kids videos are less sophisticated.
But YouTube may be making additional changes beyond those announced Wednesday. The company said it would also be investing in its YouTube Kids app, including product improvements and a promotional campaign to raise awareness with parents. YouTube recently tightened its standards for which channels can be a part of YouTube Kids, cutting the number of channels on the app, and last week widened YouTube Kids to the web, rather than offering it solely as a mobile app.
YouTube will be creating a $100 million fund to be disbursed over three years to invest in “thoughtful, original children’s content” on YouTube and YouTube Kids.
“Responsibility is our number one priority at YouTube, and nothing is more important than protecting kids and their privacy,” YouTube CEO Susan Wojcicki said in a blog post about the changes Wednesday.
Smith, the FTC official, said that he hoped YouTube’s actions would eventually lead to YouTube — and other general-audience platforms — hosting “kid-safe zones.”
The group affected most deeply by the changes will be kids-content creators, who stand to make less money and also face the risk of getting swept up into their own FTC penalties. And that may mean YouTube simply has fewer kids-video creators.
The settlement with Google was the FTC’s first battle of this kind but not the last, the commission said. Smith said more actions against large tech platforms, including possibly those that record voice commands, are more likely following the action against Google and YouTube.
“If you think about all the platforms out there, and all the economic power that they wield and the amount of content that they host, this is game-changing,” he said.
The FTC also warned that deceptive kids-content creators on YouTube could face their own aggressive fines. As part of the settlement, the FTC will make a sweep of YouTube’s videos after the company has implemented its required changes. Because YouTube will now require uploaders to identify videos directed at children, any channels that lie about the nature of their kids videos could be caught by the FTC in that sweep — and face “strong” civil-penalty fines, Smith said.
Google’s track record
Google has had run-ins with the FTC in the past. In 2013, the agency wrapped up an investigation that decided unanimously that Google wasn’t violating any antitrust laws, after allegations of biased search results.
But government officials have since taken a sharper stance toward tech companies. On Tuesday, The Washington Post reported that more than half of the country’s state attorneys general are targeting Google in an antitrust investigation that could be announced next week.
Regulators and government officials are also scrutinizing the tech industry more broadly. The Justice Department in July announced an antitrust probe into the tech industry more broadly, targeting Google, Apple, Facebook and Amazon. Meanwhile, House Democrats in June announced their own investigation into tech giants, meant to explore whether the companies are engaging in “anti-competitive conduct.”
Google has also faced pressures from regulators in Europe. In March, the search giant was hit with a $1.7 billion fine from the European Commission for “abusive” online ad practices. The Commission said Google exploited its dominance by restricting its rivals from placing their search ads on third-party websites. Last year, the EU’s executive arm fined Google a record $5 billion for unfair business practices around Android, its mobile operating system.
Carrie Mihalcik contributed to this report.
Originally published Sept. 4 at 6:28 am PT.
Update, 12:23 p.m.: Adds details, quotes and context throughout.