Google Agrees to Pay Up to $200 Million to Settle FTC YouTube Investigation: Report

Image: Youtube

The Federal Trade Commission is fining Google between $150 million and $200 million to settle the whole debacle with its subsidiary, YouTube, allegedly breaking children’s privacy law, Politico first reported Friday.

While details about the settlement haven’t been officially announced, a person familiar with the matter told Politico the measure gained FTC approval with a 3-2 vote along party lines, seeming to confirm similar reports from the Washington Post last month. After gaining FTC approval, the settlement would go on to the Justice Department for review.

Reports of the FTC’s investigation into the online video platform originally surfaced in June after several privacy groups claimed YouTube collected data on its youngest viewers without parental consent in an effort to serve them ads. This would violate the Children’s Online Privacy Protection Act, which limits how companies can scrape data from users younger than 13.

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News of Google’s possible settlement comes just weeks after the FTC lobbed a $5 billion fine at Facebook after an investigation found the company compromised millions of users personal data. Several politicians and privacy advocates criticized this penalty as too lenient, particularly when compared to Facebook’s earnings (reportedly $15.08 billion in the first quarter of this year alone).

And these critics may have similar complaints if this settlement amount gets the commission’s official stamp of approval. One of the groups whose complaint about Youtube helped prompt the investigation, the Campaign for a Commercial-Free Childhood, described the FTC’s purported $200 million fine as “terribly inadequate” in a statement from the group’s executive director, Josh Golin.

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“They have allowed YouTube to build a children’s media empire through illegal means that now, no one can compete with; all for the cost of a fine which is the equivalent of two to three months of YouTube ad revenue. 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,” Golin told Gizmodo via email Friday.

While $200 million is massive compared to penalties the commission has previously handed down for similar violations, like the $5.7 million fine it levied earlier this year against TikTok, such an amount is dwarfed by Google’s revenue. For reference, last year the company took in well over $100 billion just in advertising.

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We are encouraged by reports that, as a result of our advocacy, YouTube will no longer serve manipulative behavioral ads to children. But we await the terms of the final settlement to determine whether these changes will actually be meaningful. It is extremely concerning that Google has not removed kids’ content from the main YouTube site, and it’s unclear how children who watch there will be protected from Google’s surveillance.

In the wake of these privacy concerns, YouTube quietly announced earlier this week that it’s launching a website version of its mobile app geared towards kids. This version will debut with three settings allocated for specific age ranges, and hopefully won’t be plagued by those disturbing videos that previously landed the YouTube Kids app in hot water. Bloomberg also recently reported the company is “finalizing plans” to stop targeting ads to kids, according to sources familiar with the matter.

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As to Youtube’s recent changes, Golin commented:

“We are encouraged by reports that, as a result of our advocacy, YouTube will no longer serve manipulative behavioral ads to children. But we await the terms of the final settlement to determine whether these changes will actually be meaningful.”

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Gizmodo reached out to Google and will update this story should the company respond.

Updated: 8/31/2019, 11:00 a.m. with the CCFC’s statement.

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About the author

Alyse Stanley

Nights and weekend reporter, Gizmodo.