Google will pay $170 million to settle allegations that YouTube violated children's privacy laws by collecting data from children younger than 13, the Federal Trade Commission announced Wednesday.
The proposed settlement also calls for Google to develop a system aimed at ensuring compliance with the Children's Online Privacy Protection Act. That law prohibits website operators from knowingly collecting the type of tracking data used for behavioral advertising from children younger than 13 without their parents' consent.
News of the settlement comes more than one year after a coalition of advocacy groups -- including Center for Digital Democracy, Campaign for a Commercial-Free Childhood, Electronic Privacy Information Center and Public Citizen -- asked the FTC to prosecute YouTube over its “illegal collection” of tracking data.
Google argued last year that the terms of service at YouTube.com state that the site is not intended for children younger than 13. Instead, Google said it offers a child-focused video site, "YouTube Kids," which doesn't allow behaviorally targeted ads. But the advocates contended that more children watch clips on YouTube's main site than the specialized YouTube Kids.
The original complaint referenced a Common Sense survey that asked parents whether their children under the age of 18 watch videos on YouTube, and if so, on which of the company's services; 44% of the parents said their children use the general YouTube.com site.
The FTC alleges in its complaint, also unveiled Wednesday, that YouTube “hosts numerous channels that are 'directed to children,'” as that term is defined by the federal children's privacy law.
The agency adds that Google markets YouTube to Mattel, Hasbro and other companies as a "top destination for kids."
In a presentation to Mattel, Google allegedly stated: “YouTube is today’s leader in reaching children age 6-11 against top TV channels.”
And a presentation to Hasbro allegedly included the boasts “YouTube was unanimously voted as the favorite website for kids 2-12,” and “93% of tweens visit YouTube to watch videos.”
The Republican-dominated agency voted 3-2 to approve the settlement, with the two Democratic Commissioners dissenting on the grounds that the penalties aren't tough enough.
The watchdogs Campaign for a Commercial-Free Childhood and Center for Digital Democracy gave the settlement a mixed review.
The groups stated Wednesday that the terms are likely to “significantly reduce behavioral marketing to children on YouTube,” but added that the deal “doesn’t do nearly enough to ensure children will be protected or to hold Google accountable.”