YouTube Ordered to Pay Record Settlement for Alleged Data Violations

YouTube Ordered to Pay Record Settlement for Alleged Data Violations

YouTube Ordered to Pay Record Settlement for Alleged Data Violations banner

In response to allegations that YouTube illegally collected personal data from children, Google has agreed to a monumental settlement with the Federal Trade Commission (FTC).

According to an announcement from the FTC last week, Google will pay “a record $170 million,” a portion of which will go directly to the State of New York for the alleged violation of the Children’s Online Privacy Protection Act (COPPA). The law, enacted by Congress in 1998, “imposes certain requirements on operators of websites or online services directed to children under the age of 13,” the FTC states.

In a complaint filed against YouTube, a subsidiary of Google, both the FTC and attorney general of New York say the streaming platform collected “personal information—in the form of persistent identifiers that are used to track users across the Internet—from viewers of child-directed channels, without first notifying parents and getting their consent.” In turn, the complaint alleges YouTube “earned millions of dollars by using the identifiers, commonly known as cookies, to deliver targeted ads to viewers of these channels.”

According to the FTC, the $170 million penalty is the largest amount ever obtained in a COPPA case.

Where it All Began

The violation of data protection laws by large companies is a complicated, difficult issue to fix, according to Elizabeth Carey, a marketing professor and online instructor at Johnson & Wales. “Social media companies have enjoyed legal protections for content on their platforms under Section 230 of the Communications Decency Act of 1996,” she explained. “At the time, no one really understood what the internet’s potential was beyond web commerce, and the internet was not really a two-way communication channel.”

The law stated that internet companies were not legally responsible for the content they hosted so long as someone else published it there. Carey, who spent part of her career working in marketing in San Francisco during the peak years of the dot-com explosion, remembers how her clients reacted when the law was enacted. “It was like the Wild West,” she recalled. “One of my clients was an emerging tech company launching a web browser, and they were high-fiving in the hallways when it was announced.”

Responding to Recent Crackdowns

Carey says the recent headlines about Google and YouTube is not unexpected, as this isn’t the first situation where a social media company has been slapped on the wrist for questionable data practices.

“I think you have to go back a bit further on this and remember the controversy surrounding Facebook and Cambridge Analytica, which collected information used in an effort to influence the 2016 presidential election by catering to individuals’ personal biases,” said Carey, an expert in advertising, marketing, and digital and social media marketing. This practice, which she referred to as “social media mining,” is a way of drawing conclusions about a population and then using the data to sell products, services, or in the case of the Facebook controversy, political views and ideologies.

In her opinion, Carey thinks the penalty Google received was not severe enough, saying YouTube operated under full knowledge of what they were doing. “[YouTube] knowingly and illegally monitored, tracked and served targeted ads to young children to keep the ad revenue flowing from companies like Hasbro and Mattel,” she said, noting that these actions came from financial pressure from shareholders. “The steeper the fines, the more pain for content creators who are violating the FTC, the FCC, or COPPA. This will, hopefully, lead to better guidelines and stricter rules to protect social media users, YouTube viewers, and content creators.”

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