REGULATORS FINE GOOGLE $170 MILLION FOR VIOLATING CHILDREN’S PRIVACY ON YOUTUBE

By Natasha Singer and Kate Conger

Google on Wednesday agreed to pay a record $170 million fine and to make changes to protect children’s privacy on YouTube, as regulators said the video site had knowingly and illegally harvested personal information from youngsters and used that data to profit by targeting them with ads.

The measures were part of a settlement with the Federal Trade Commission and New York’s attorney general. They said YouTube had violated a federal children’s privacy law known as the Children’s Online Privacy Protection Act, or COPPA.

Regulators said YouTube, which is owned by Google, had illegally gathered children’s data — such as identification codes that are used to track web browsing over time — without their parents’ consent. The site also marketed itself as a top destination for young children to advertisers, even as it told some advertising companies that no compliance with the children’s privacy law was needed because it did not have viewers younger than 13. YouTube then made millions of dollars by using the information harvested from children to target them with ads, regulators said.

To settle the charges, YouTube agreed to pay $170 million, of which $136 million will go to the F.T.C. and $34 million to New York. The sum represents the largest civil penalty ever obtained by the F.T.C. in a children’s privacy case, dwarfing the previous record fine of $5.7 million that the agency levied this year against the owner of TikTok, a social video-sharing app.

Under the settlement, which the F.T.C. approved in a 3 to 2 vote, YouTube also agreed to set up a system that asks video channel owners to identify the children’s content they post so that targeted ads are not placed in those videos. YouTube must also obtain consent from parents before collecting or sharing personal details like their child’s name or photos, regulators said.

The move adds to the enforcement actions that American regulators have recently taken against tech companies for violations of people’s privacy, indicating the Trump administration’s willingness to aggressively pursue the powerful corporations. It follows a $5 billion privacy settlement between the F.T.C. and Facebook in July over how the social network collected and handled its users’ data.

But critics warned that the fine and measures against YouTube did not go far enough to protect children’s privacy.

Children’s advocates said the $170 million penalty was a slap on the wrist for one of the world’s richest companies. They added that Google had simply agreed to abide by a children’s privacy law that it was already obligated to comply with. COPPA prohibits operators of online services from collecting personal data, like home addresses, from children under 13 without a parent’s verifiable permission.

“Merely requiring Google to follow the law, that’s a meaningless sanction,” said Jeffrey Chester, executive director of the Center for Digital Democracy, a nonprofit whose efforts in the 1990s helped trigger COPPA’s passage. “It’s the equivalent of a cop pulling somebody over for speeding at 110 miles an hour — and they get off with a warning.”

The agreement split the F.T.C. down partisan lines, with the agency’s three Republican commissioners voting to approve the settlement and the two Democratic commissioners dissenting.

In a statement, two of the Republican commissioners, Joseph J. Simons, the agency’s chairman, and Christine S. Wilson, said that the settlement “achieves a significant victory for the millions of parents whose children watch child-directed content on YouTube.” In particular, they said, this was the first time a platform would have to ask its content producers to identify themselves as creators of children’s material. The settlement, they said, “sends a strong message to children’s content providers and to platforms about their obligation to comply with the COPPA rule.”

But while the agreement prohibits YouTube and Google from using or sharing the children’s data they have already obtained, one of the Democratic commissioners, Rohit Chopra, said it did not hold company executives personally accountable for illegal data-mining of children. The other Democratic commissioner, Rebecca Kelly Slaughter, said the agreement did not go far enough by requiring YouTube itself to proactively identify children’s videos on its platform.

“No individual accountability, insufficient remedies to address the company’s financial incentives, and a fine that still allows the company to profit from its lawbreaking,” Mr. Chopra wrote in his dissent. “The terms of the settlement were not even significant enough to make Google issue a warning to its investors.”

COPPA is the strongest federal consumer privacy statute in the United States, enabling the F.T.C. to level fines of up to $42,530 for each violation.

Noah Phillips, a Republican commissioner, argued that Congress should give the F.T.C. more guidance about how to levy fines.

In a blog post on Wednesday about the settlement, YouTube’s chief executive, Susan Wojcicki, said that “nothing is more important than protecting kids and their privacy.” She added, “From its earliest days, YouTube has been a site for people over 13, but with a boom in family content and the rise of shared devices, the likelihood of children watching without supervision has increased.”

YouTube said that not only had it agreed to stop placing targeted ads on children’s videos, it would also stop gathering personal data about anyone who watches those videos, even if the company believes the viewer is an adult. It said it would also eliminate other features on children’s videos, such as comments and notifications, that require the use of personal data.

Ms. Wojcicki said YouTube also plans to use artificial intelligence to scan for content that targets young audiences, like videos featuring kids’ toys, games or characters, in addition to relying on creator reports.

Under the settlement, YouTube must implement the changes by early next year.

The privacy case against YouTube began in 2016 after the New York attorney general’s office, which has been active in enforcing the federal children’s privacy law in the state, notified the F.T.C. of apparent children’s privacy violations on the video site.

“Google and YouTube knowingly and illegally monitored, tracked and served targeted ads to young children just to keep advertising dollars rolling in,” Letitia James, New York’s attorney general, said in a statement on Wednesday. “These companies put children at risk and abused their power.”

Google has repeatedly dealt with privacy violations in recent years. The internet search company is subject to a 20-year federal consent order from 2011 for deceptive data-mining involving its now-defunct social network Buzz. That order required Google to put a comprehensive privacy program in place and forbade it from misrepresenting how it handles people’s data.

In 2012, Google also agreed to pay $22.5 million to settle F.T.C. charges that it had violated that consent order by deceiving users of Apple’s Safari browser about its data-mining practices.

The Silicon Valley company is also the subject of a state lawsuit over alleged children’s privacy violations, brought by Hector Balderas, the attorney general of New Mexico. The suit alleges the company failed to ensure that children’s apps in its Google Play store complied with the children’s privacy law. Google has asked that the case be dismissed.

The settlement on Wednesday is likely to have implications beyond YouTube. The changes required under the agreement could limit how much video makers earn on the platform because they will no longer be able to profit from targeted ads on children’s videos.

To offset some of those losses, YouTube said it would funnel $100 million to creators of children’s content over the next three years. It will also heavily promote YouTube Kids, its child-focused app, to shift parents away from using the main YouTube app when allowing their kids to watch videos.

The crackdown on creators of children’s content could make it financially difficult to produce videos for kids, said Maureen Ohlhausen, a former acting chairwoman of the F.T.C.

“There is a lot of free content available for children,” she said. “You want to be sure that you don’t kill the goose that lays the golden egg.”

Follow Natasha Singer and Kate Conger on Twitter: @natashanyt and @kateconger.

Natasha Singer reported from New York and Kate Conger from San Francisco.

Fonte: The New York Times