Sep 4, 2019

FTC unveils $170 million YouTube settlement

Illustration: Rebecca Zisser/Axios

Google will pay $170 million to settle a Federal Trade Commission complaint that its YouTube subsidiary illegally collected children's personal information, the agency announced Wednesday morning.

The big picture: The FTC touted the settlement, details of which had circulated widely last week, as a record-breaking penalty that would shape YouTube's future behavior. But critics — including the FTC's two Democratic commissioners — argued that both the size of the fine and accompanying new restrictions on the company's behavior don't go far enough to protect the public.

Details: The FTC found that YouTube's tracking of underage users violated provisions of the 1998 Children's Online Privacy Protection Act (COPPA) because the company failed to notify users of child-directed channels about the tracking and obtain parental consent.

  • Under a consent decree that is part of the settlement, YouTube will be required to build a system for "channel owners to identify their child-directed content" so YouTube can comply with COPPA rules.

What they're saying: "This settlement achieves a significant victory for the millions of parents whose children watch child-directed content on YouTube," FTC chairman Joseph Simons and commissioner Christine Wilson wrote in a release. "It also sends a strong message to children’s content providers and to platforms about their obligation to comply with the COPPA Rule. "

"We believe the significant monetary penalty, coupled with the far-reaching conduct relief, is almost certainly better than what we would achieve in litigation. Importantly, the relief for consumers is immediate, rather than after years of litigation."
— Simons and Wilson

The $170 million penalty "is almost 30 times higher than the largest civil penalty previously imposed under COPPA," Wilson notes.

Yes, but: That's still small compared with the tens of billions Google earns in revenue annually, and critics of the settlement argue that it won't serve as as real deterrent to the company and its peers.

  • Similar criticisms arose in July when the FTC announced its much larger $5 billion settlement with Facebook for privacy violations.
  • In a dissenting statement, commissioner Rohit Chopra argues: "The Commission repeats many of the same mistakes from the flawed Facebook settlement: no individual accountability, insufficient remedies to address the company’s financial incentives, and a fine that still allows the company to profit from its lawbreaking. The terms of the settlement were not even significant enough to make Google issue a warning to its investors."

What's next: The settlement, which also would conclude a parallel inquiry by New York state, must be approved by a Federal district court judge.

Go deeper: For tech giants, profits far outweigh fines

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YouTube changes policies in response to children's privacy fine

YouTube says it's making 4 major changes to its policies, after settling with the Federal Trade Commission for $170 million for violating children's privacy laws.

Why it matters: The changes announced by the video giant shows that it's taking the problem of preventing further violations somewhat seriously, even if children's privacy advocates argue that the fine didn't go far enough.

Go deeperArrowSep 5, 2019

The growing list of U.S. government inquiries into Big Tech

Illustration: Sarah Grillo/Axios

Monday, a large group of state attorneys general led by Texas's Ken Paxton is expected to announced a new antitrust probe into Google, adding to the lengthening list of investigations into the big internet companies.

Why it matters: Big tech companies like Google, Facebook, and Amazon are now facing numerous state and federal probes into their practices. These companies have historically enjoyed wide regulatory freedom in the U.S., but lawmakers and regulators want to change that — and antitrust law gives government its most powerful tools to penalize, regulate or even break up American corporations.

Catch upArrowSep 9, 2019

Sackler family made $1B in wire transfers, NY attorney general finds

Members of P.A.I.N. (Prescription Addiction Intervention Now) and Truth Pharm protest on September 12. Photo: Erik McGregor/LightRocket via Getty Images

The Sackler family made roughly $1 billion in wire transfers between themselves and various financial institutions, the New York Times reports.

The big picture: The family's business, Purdue Pharma — which is currently facing thousands of lawsuits for its role in fueling the opioid epidemic — reached a tentative "global" settlement in the nationwide opioids lawsuit this week. That settlement would result in the maker of OxyContin entering bankruptcy.

Go deeperArrowSep 13, 2019