Google’s YouTube has agreed to pay $170 million in fines to settle Federal Trade Commission charges that it illegally harvested children’s personal data, which it used to serve them personalized ads.
First things first: $170 million ($136 million will be paid to the FTC and another $34 million to New York state, which joined the Feds’ case) is a record for companies accused of violating the 1998 Children’s Online Privacy Protection Act. It’s also basically a rounding error in terms of profits for Google and YouTube.
Google’s parent company Alphabet may generate $161 billion in revenue this year; RBC analyst Mark Mahaney thinks YouTube will generate $20 billion of that. That alone is enough to make the settlement unsatisfactory to the FTC’s Rohit Chopra, who voted against the Facebook deal and also dissents today. “Financial penalties need to be meaningful or they will not deter misconduct,” Chopra writes in a statement, which is partially redacted but indicates that he wanted Google to pay something in the billions for its sins.
The bigger issue is whether YouTube is fundamentally going to change the way it does business. This will also sound familiar from this summer: YouTube says it is going to overhaul the way it interacts with kids who watch videos on its massive platform, but critics doubt the platform’s commitment to that pledge.
Today’s settlement requires YouTube to ask people who upload videos to the service to indicate whether those videos are aimed at kids. If the video uploaders say their videos are for kids, then YouTube is supposed to make sure it doesn’t collect data about kids who watch the videos (without getting an okay from their parents); it also promises not to show children ads that use “behavioral” targeting, which requires all kinds of internet surveillance.