NEW YORK (NYTIMES) - The Federal Trade Commission (FTC) has voted to fine Google US$150 million (S$208 million) to US$200 million (S$277 million) to settle accusations that its YouTube subsidiary illegally collected personal information about children, according to three people briefed on the matter.
The case could have significant repercussions for other popular platforms used by young children in the United States.
The settlement would be the largest civil penalty ever obtained by the FTC in a children's privacy case. It dwarfs the previous record fine of US$5.7 million for children's privacy violations the agency levied this year against the owners of TikTok, a social video-sharing app.
Politico first reported the amount of the settlement, which would have to be approved by the Justice Department.
The news of the FTC's settlement with Google comes at a moment when regulators and lawmakers in Washington and the European Union are challenging the power - and the aggressive data-mining practices - of tech giants like Facebook and Google.
Last month, the FTC announced a US$5 billion fine against Facebook for abusing its users' personal data. Members of Congress this year have also introduced at least a dozen privacy and transparency Bills to bolster protections for Americans' social media data, genetic data, facial recognition data and other kinds of information.
The FTC's agreement with YouTube involves a larger fine than in previous children's privacy settlements, but the case has renewed complaints from consumer advocates that the agency has generally failed to require privacy violators to make substantive change to their data-mining practices.
"Once again, this FTC appears to have let a powerful company off the hook with a nominal fine for violating users' privacy online," Senator Edward Markey said in a statement on Friday (Aug 30).
If regulators fail to take a tougher stand to protect children's privacy, the problematic practices of social media companies will not change, said Mr Josh Golin, executive director of the Campaign for a Commercial-Free Childhood, a nonprofit group.
"YouTube has reaped huge profits by ignoring federal children's privacy law and engaging in illegal data collection and targeted marketing," Mr Golin said.
The FTC, which is expected to announce the settlement in September, declined to comment. YouTube declined to comment.
Google has faced scrutiny before over how it collects and uses people's data. It is already subject to an FTC consent order from 2011 for deceptive data-mining involving its now-defunct social network Buzz.
That order required the Internet search company to institute a comprehensive privacy programme and prohibited it from misrepresenting its data-handling practices.
In 2012, Google agreed to pay US$22.5 million to settle FTC charges that it had violated the consent order by deceiving users of Apple's Safari browser about its data-mining practices.
Whether YouTube's alleged misuse of children's data also violates that order is not known.
Children are among the most avid viewers of YouTube. Yet the video site has struggled to police content intended for and featuring them. In February, a video documenting how pedophiles used the comments on videos of children to guide other predators went viral on YouTube.
The revelations were especially damaging because YouTube had pledged in 2017 to do more to protect families after reports of paedophiles cruising the site for videos of minors and leaving lewd or sexual comments. YouTube addressed the latest issue by disabling comments on most videos featuring children under 13 years old after brands threatened to suspend advertising on the site.
In June, The New York Times published an investigation into how YouTube's recommendation system automatically promoted videos of scantily clad children to people who had watched other videos of young children in compromised positions or sexually themed content.
The accusations against YouTube emerged last year after a coalition of more than 20 consumer advocacy groups filed a complaint to the FTC saying that the video platform was violating a federal privacy law by collecting and exploiting the personal information of children.
That law, called the Children's Online Privacy Protection Act, prohibits online services aimed at children under 13 from collecting personal details - like a child's birth date, contact information, photos or precise location - without a parent's permission. The law also prohibits children's apps from using persistent identifiers to target youngsters with ads based on their behaviour.
YouTube has long maintained that its platform is not intended for children under 13, even as some of its most popular channels - with names like Cocomelon Nursery Rhymes and ChuChu TV - are clearly aimed at youngsters, offering colourful animated videos that have been viewed more than 1 billion times.
People who set up accounts on YouTube must affirm that they are at least 13 and must agree to Google's terms of service, enabling the company to track users' video-viewing activities, Internet browsing habits and other details. YouTube has said that it deletes accounts when it determines that a user is under 13.
YouTube maintains a separate app for younger users, called YouTube Kids, which says that it does not allow behaviour-based ads.
But the children's groups said in their complaint that YouTube was aware that millions of children were watching its main channel and collected the children's personal details anyway, without parental consent.
The FTC settlement with YouTube could have major implications for other popular, general interest apps - like animated video games - in the US that have millions of users under the age of 13.
Google is also the subject of a state lawsuit over alleged children's privacy violations brought by Mr Hector Balderas, attorney-general of New Mexico. Google has asked that the case be dismissed.