Google to pay up to $200M to settle FTC YouTube investigation: Politico
Google has agreed to pay between $150 and $200 million to resolve an FTC investigation into YouTube over alleged violations of a children’s privacy law, according to a person familiar with the matter.
The FTC voted 3-2 along party lines to approve the settlement, sending it over to the Justice Department as part of the review process, the person confirmed. Details about other terms of the settlement were not immediately available.
The settlement is the latest move from the FTC meant to crack down on Silicon Valley privacy violations. Facebook last month paid $5 billion to resolve an expansive agency probe into its data practices.
The industry has more broadly seen its fortunes sour in Washington, as President Donald Trump and associates, Democratic presidential candidates and lawmakers of both parties have all pilloried tech for its perceived failures to stem hate speech, extremism, privacy flaps, alleged bias and a wealth of other ills. Many of those same critics dinged the FTC over the Facebook penalties, calling into question both the impact of the $5 billion sum on the moneyed social media giant and the efficacy of the settlement terms.
A coalition of privacy groups had complained to the FTC that YouTube violated the Children’s Online Privacy Protection Act by collecting personal information about minors and using it to target advertisements without getting consent from parents.
The settlement dwarfs the FTC's largest fine to date for COPPA violations: $5.7 million levied in February against the operators of Musical.ly, the China-based social video app that's become a juggernaut since rebranding as TikTok.
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Nevertheless, several of the groups behind the original COPPA complaint against YouTube viewed the settlement skeptically.
"They should levy a fine which both levels the playing field, and serves as a deterrent to future COPPA violations. This fine would do neither," Josh Golin, executive director of coalition leader the Campaign for a Commercial-Free Childhood, said in a statement, noting that a fine in the $150 million to $200 million range is "the equivalent of two to three months of YouTube ad revenue."
"The punishment should’ve been at least half a billion dollars," Jeff Chester, executive director of the Center for Digital Democracy, told POLITICO. "It's scandalous. It sends the signal that you in fact can break a privacy law and get away largely scot-free."
Meanwhile, Marc Rotenberg, president of fellow complainant the Electronic Privacy Information Center, said the key will be the terms the FTC imposes on YouTube under the settlement. "The critical challenge for the FTC is whether it has the ability to restrain business practices that violate privacy," he said. "Imposing large fines does not address that problem."
Spokespeople for Google and the FTC declined comment.
Bloomberg recently reported that YouTube is finalizing plans to end targeted advertisements on videos aimed at minors. The Washington Post was first to report the party-line vote approving a "multimillion-dollar" settlement last month.
Reps. David Cicilline (D-R.I.) and Jeff Fortenberry (R-Neb.) recently urged the FTC to require that videos directed at children be moved off YouTube’s main platform and onto YouTube Kids. That's the company's dedicated service for kid-friendly videos, which YouTube just made available on the internet after offering it through a mobile app and smart TVs for the last several years.
The lawmakers also want the FTC to mandate annual independent audits for YouTube to monitor compliance with the terms of the settlement and to block it from launching new children's services without outside review.
COPPA author Sen. Ed Markey (D-Mass.), who's made similar recommendationsas to what the FTC should require of YouTube as part of the settlement, said in a statement that he's dubious the agency was tough on the company given the party-line split.
"I look forward to reviewing the requirements placed upon Google in this settlement, but I am disappointed that the Commission appears poised to once again come out with a partisan settlement that that falls short of the Commission’s responsibility to consumers and risks normalizing corporate bad behavior," the lawmaker said.
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