WASHINGTON (CN) - Google and YouTube will pay $170 million to settle claims Wednesday that they violated child-privacy laws by collecting personal information from children without getting their parents' consent.
While New York will get $34 million of the settlement fund, the remaining $136 million is earmarked for the Federal Trade Commission and. FTC Chairman Joe Simons said the penalty is 30 times larger than the next largest the FTC has imposed for similar violations.
In a 19-page complaint filed with the proposed settlement this morning, the FTC and New York accused Google and YouTube of violating a federal regulation created under the Children's Online Privacy Protection Act. For companies that run websites targeted at children under the age of 13, the law requires them to get parental consent before collecting personal information used to track users and target advertisements.
To comply with the rule, each website targeted toward children must have a posted privacy policy and tell users how it plans to use the information.
The FTC and New York say Google and YouTube did none of this, even while collection information on scores of channels explicitly geared toward children and boasting in pitch meetings that YouTube has become "the new Saturday morning cartoons."
"YouTube touted its popularity with children to prospective corporate clients," Simons said in a statement Wednesday. "Yet when it came to complying with COPPA, the company refused to acknowledge that portions of its platform were clearly directed to kids. There's no excuse for YouTube's violations of the law."
The complaint details a handful of YouTube's most popular channels geared toward kids, from which the company brought in nearly $50 million in advertising that relied on the personal information gathered from users.
In a blog post Wednesday, Google said it will start limiting data collection on all videos targeted at children on YouTube, regardless of how old the person actually watching the video might be.
"I have the privilege of working alongside parents who deeply care about protecting kids," YouTube CEO Susan Wojcicki wrote in the post. "We know how important it is to provide children, families and family creators the best experience possible on YouTube and we are committed to getting it right."
As part of the settlement, the company will also require content creators to say whether their videos are directed to children and will keep creators up-to-date on their COPPA obligations.
In a press conference Wednesday, Simon said this change is particularly significant because it will make the company liable for COPPA violations going forward.
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