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FTC official: I understand concern over YouTube settlement, but believe it's appropriate

Key Points
  • The FTC says Google's YouTube will pay $170 million to settle a complaint that it earned millions by illegally collecting personal information from children without a guardian's consent.
  • Two Democrats voted against the settlement, hoping for a harsher punishment.
  • Andrew Smith, an official at the FTC, says that while he can understand disappointment over YouTube's $170 million settlement, he's confident that it was the right amount.
Federal Trade Commission Director of Bureau of Consumer Protection, Andrew Smith, speak at a press conference on Sept. 4, 2019, at the FTC headquarters in Washington, DC.
Mandel Ngan | AFP | Getty Images

Andrew Smith, an official at the Federal Trade Commission, told CNBC on Wednesday that while he can understand disappointment over the size of YouTube's settlement with the agency, he's confident it was the right amount.

Earlier in the day, the FTC announced that Google's YouTube will pay a $170 million fine to settle a complaint that it earned millions by illegally collecting personal information from children without a guardian's consent.

"I think it's a penalty that sends a strong message to the marketplace," said Smith, director of the FTC's Bureau of Consumer Protection. "I have to respectfully disagree with the detractors. This is a historic fine by anybody's standards."

Google's parent company, Alphabet, reported second quarter earnings in July that placed the company's revenue at $38.94 billion.

Two Democrats voted against the measure, wanting to further punish the social media giant.

"For the third time since 2011, the Federal Trade Commission is sanctioning Google for privacy violations," FTC Commissioner Rohit Chopra said in a dissenting statement. "This latest violation is extremely serious. The company baited children using nursery rhymes, cartoons and other kid-directed content on curated YouTube channels to feed its massively profitable behavioral advertising business."

Chopra, joined by fellow Democratic Commissioner Rebecca Kelly Slaughter, voted against the settlement. And while Smith said he appreciates their concerns, he said the company and the marketplace will have "the guidance it needs."

"We're not taking Google's word for anything," Smith added.

Along with the fine, Google and YouTube have to "develop, implement, and maintain a system that permits channel owners to identify their child-directed content on the YouTube platform" so that YouTube can ensure it is complying with the Children's Online Privacy Protection Act, which it was accused of violating. It must also provide information about its data collection practices and obtain parental consent before collecting personal information from children.

YouTube on Wednesday said it is taking steps to address concerns raised over its practices and will stop personalizing ads to children.

"From its earliest days, YouTube has been a site for people over 13, but with a boom in family content and the rise of shared devices, the likelihood of children watching without supervision has increased," the company said in a blog post.