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Illustration: Aïda Amer/Axios

Although the U.S. government is still struggling to define regulations for the tech industry, it's finding ways to take action over the growing portion of the internet used by kids.

Why it matters: An increase in federal penalties against tech companies for violating kids' privacy rules is shaping new expectations for how the internet will be governed.

Driving the news: The Federal Trade Commission has reportedly approved a settlement with Google over kids' privacy violations on YouTube, per The Washington Post.

  • The company is expected to pay a multimillion-dollar fine for neglecting to protect the data of children under the age of 13 — a violation of the Children's Online Privacy Protection Act (COPPA).
  • The COPPA law requires websites and online businesses serving children 12 years old and younger to comply with privacy standards for collecting and using kids' data.
  • The news comes just weeks after Bloomberg reported that the FTC was considering asking YouTube to disable kids' advertising on its main app.

"This fine and the various debates about COPPA 2.0 are inevitably going to take children's digital protections to a much more comprehensive place," emails Dylan Collins, CEO of kids' tech platform SuperAwesome.

  • Colins argues that in the future, laws which have previously only applied to self-declared kids' content should start to be applied to any platform that could be accessed by kids.

The big picture: Tech companies in general, and YouTube in particular, are facing increased scrutiny regarding how privacy tools are built to protect the most vulnerable group of internet users.

  • In February, TikTok, a Chinese-owned karaoke app, agreed to a $5.7 million settlement with the FTC for illegally collecting personal data from children, making it the largest settlement from a violation of COPPA in the law's 20+ year history.
  • The Children’s Advertising Review Unit (CARU) of the Council of Better Business Bureaus last week said it found that Snapchat complies with COPPA and "goes beyond minimal procedures to prevent under-age use." The app was recently criticized by Sen. Marsha Blackburn (R-Tenn.) for being a "child predator's dream," although little hard evidence has been presented to back that claim.

Be smart: A shift towards broader kids' privacy laws is important, because platforms built and designed for kids online are often neglected by the very kids they're built for.

  • A new study from Kids Insights finds that children in the U.S. begin avoiding
    the YouTube Kids app in favor of the main app once they reach 6 years old.

Also this month, the Federal Communications Commission voted to ease 30-year-old broadcast rules for children's TV programming, reducing the amount of dedicated children's content broadcasters are required to air.

  • Republican FCC leaders said the move will allow broadcasters to better compete with streaming platforms like Netflix and YouTube.
  • The agency's Democratic members said relaxing the rules will make it harder for low-income families who rely on quality children's content aired on over-the-air channels.

By the numbers: According to a new kids' digital media report from SuperAwesome and PwC, 62 million kids globally went online for the first time in 2018, which accounted for more than 40% of the total net new internet users in 2018.

What's next? In light of increasing calls for action around YouTube's child privacy practices, the FTC is weighing updates to COPPA that would define how the law applies to websites and platforms that aren't designed for kids but are widely used by them.

  • "We also encourage Congress to update our privacy laws to reflect the digital world our kids are living in," said James P. Steyer, founder and CEO, Common Sense. "Until platforms are forced to pay stiff penalties and commit to real changes they will not properly serve their kids and family audiences."
  • In March, Sens. Ed Markey (D-Mass.) and Josh Hawley (R-Mo.) introduced legislation to extend COPPA privacy protections to 13-15 year olds. It would also ban targeted ads to kids.

The bottom line: The internet was originally built for adults, and the industry has never taken full responsibility for how kids use it. That could finally begin to change if policymakers and regulators ratchet up the pressure.

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Bipartisan group of senators unveils $908 billion COVID stimulus proposal

Sens. Joe Manchin (D-W.Va.) and Susan Collins (R-Maine) in the Capitol in 2018. Photo: Tom Williams/CQ Roll Call

A bipartisan group of senators on Tuesday proposed a $908 billion coronavirus stimulus package, in one of the few concrete steps toward COVID relief made by Congress in several months.

Why it matters: Recent data shows that the economic recovery is floundering as coronavirus cases surge and hospitals threaten to be overwhelmed heading into what is likely to be a grim winter.