WASHINGTON (Reuters) – Google, which is owned by Alphabet Inc, and its YouTube video service will pay $170 million to settle allegations that it broke federal law by collecting personal information about children, the Federal Trade Commission said on Wednesday.
YouTube had been accused of tracking viewers of children’s channels using cookies without parental consent and using those cookies to deliver million of dollars in targeted advertisements to those viewers.
The settlement with the FTC and the New York attorney general’s office, which will receive $34 million, is the largest since a law banning collecting information about children under age 13 came into effect in 1998. The law was revised in 2013 to include “cookies,” used to track a person’s internet viewing habits.
It is also small compared with the company’s revenues. Alphabet, which generates about 85% of its revenue from sales of ad space and ad technology, in July reported total second-quarter revenue of $38.9 billion.
YouTube said in a statement on Wednesday that in four months it would begin treating all data collected from people watching children’s content as if it came from a child. “This means that we will limit data collection and use on videos made for kids only to what is needed to support the operation of the service,” YouTube said on its blog.
In late August, YouTube announced it would launch YouTube Kids with separate niches for children depending on their ages and designed to exclude disturbing videos. It has no behavioral advertising.
YouTube allows companies to create channels, which include advertisements that create revenue for both the company and YouTube.