YouTube could face FTC probe over alleged collection of children’s data

"If you are under 13 years of age, then please do not use the service," the terms say. "There are lots of other great web sites for you."

It's a warning that goes unheeded by millions of children around the world who visit YouTube to watch cartoons, nursery rhymes, science experiments or videos of toys being unboxed.

In a formal complaint being filed Monday, child advocates and consumer groups are asking the Federal Trade Commission to investigate and impose potentially billions of dollars of penalties on Google for allegedly violating children's online privacy and allowing ads to target them.

"Google profits handsomely from selling advertising to kid-directed programs that it packages," said Jeff Chester, director of the Center for Digital Democracy, one of the groups that drafted the complaint. "It makes deals with producers and distributors of kids' online programs worldwide. Google has built a global and very lucrative business based on kids' deep connections to YouTube."

YouTube's business model relies on tracking IP addresses, search history, device identifiers, location and other personal data about its users so that it can gauge their interests and tailor advertising to them. But that model isn't supposed to work for US children, who are protected by the Children's Online Privacy Protection Act. That's a 20-year-old law that prohibits internet companies from knowingly collecting personal data from kids under 13 without their parents' consent.

The coalition accuses YouTube of violating COPPA and deliberately profiting off luring children into what Chester calls an "ad-filled digital playground" where commercials for toys, theme parks or sneakers can surface alongside kid-oriented videos.

YouTube said in an emailed statement that it "will read the complaint thoroughly and evaluate if there are things we can do to improve. Because YouTube is not for children, we've invested significantly in the creation of the YouTube Kids app to offer an alternative specifically designed for children."

That toddler-oriented YouTube Kids app, launched in 2015, offers more parental controls but is not widely used — and uses the same videos and channels that kids can also find on the regular YouTube service.

Although it's not known if the FTC will take action, the complaint comes at a time of increased public scrutiny over the tech industry's mining of personal data and after the FTC opened an investigation last month into Facebook's privacy practices.

"It seems like (the FTC) may be more reinvigorated and ready to take these issues seriously," said Josh Golin, director of the Campaign for a Commercial-Free Childhood, which drafted the complaint along with the Center for Digital Democracy and a Georgetown University law clinic. Several other groups have signed on, including Common Sense Media, which runs a popular website for families, and the advocacy division of Consumer Reports.

"I think the day of reckoning has arrived," said U.S. Sen. Edward Markey, a Massachusetts Democrat who co-authored COPPA in the 1990s and says he wants the FTC to look into the YouTube complaint. "Americans want to know the answers as to whether or not the privacy of their children is being compromised in the online world."

FTC spokeswoman Juliana Gruenwald Henderson said in an email that the agency hasn't yet received the letter but looks forward to reviewing it. The complaint was originally scheduled to be filed last week but was delayed after the shooting on Tuesday at YouTube's California headquarters.

"We take enforcement of COPPA very seriously and have brought more than two dozen COPPA cases since the COPPA rule was enacted," she said. The FTC's investigations aren't usually public, but it has previously settled child privacy cases with Yelp, mobile advertising network inMobi and electronic toy-maker VTech.

None of those platforms are as popular for kids as YouTube, which has toddler-themed channels with names like ChuChuTV nursery rhymes, which as of last week counted more than 16 million subscribers and 13.4 billion views. It also has more personality-driven programs that cater to preteens.

A former FTC attorney who now advises companies on COPPA compliance said a case against YouTube would not be straightforward because it's a general-audience service, making it hard to tell if parents are curating content for their kids to watch or letting them use it on their own. Kandi Parsons said the FTC hasn't yet set its targets on kid-directed channels within broader media websites, though that doesn't mean it won't.

"If the FTC thought that a service was directed to children and it was delivering online targeted advertising without consent, that could be a violation," Parsons said. She said the FTC could send Google a civil subpoena seeking more information, and also use other techniques to find out how the service is tracking its users.

Advocates say Google knows what it is doing. They point to its "Google Preferred" program that allows advertisers on YouTube to pay a premium to get their ads on the most popular videos. The program includes a "Parenting & Family Lineup" that has featured channels such as ChuChu TV, Fox's BabyTV and Seven Super Girls, whose topics include "fluffy unicorn slime."

YouTube does "age-gate" to block children who identify themselves as under 13 from starting an account that allows users to post videos, but an account isn't needed to watch videos on the platform.

"It's laughable if Google execs claim that they think the parent is in charge of the online viewing behaviors of tens of millions of children," Chester said. "Children are watching this content by themselves. Google is trying to look the other way."

"They created a successful model monetizing kids' data on YouTube and really did not want to think about the consequences," he said. "Google is one of those companies that has failed to address its ethical dilemmas in a serious way."