According to reports citing persons close to the matter, Google is close to finalizing a $150 to $200 million settlement with the FTC to end an investigation into how it handles users who are legally minors. The deal has already been voted on by the FTC and is under review by the U.S. Department of Justice.
The figure is much higher than the tens-of-millions that had been expected. But that could also keep Google well clear of more damaging consequences for the YouTube platform.
What was this investigation about?
The investigation was chiefly centered around how the company used the data YouTube collected from minor children. Specifically, it centered on the fact that no account is required to access YouTube. Advertisements shown are typically the type used to track individual virtual movement and activity across the internet.
Consent and the ability to even grant consent lie at the heart of the matter. No account can even be created for anyone under the age of 13 and obtaining parental permission is especially difficult. Those users are also legally unable to give consent on their own through general use of YouTube.
The information taken includes a significant amount of exceedingly personal data including phone numbers, app usage, and device information. All of that could be classified as identifiable, making it more sensitive than just a browser history or watch history might be. Improper collection and use of that data is a breach of the Children's Online Privacy Protection Act.
Another matter at the center of the controversy surrounding the investigation. Investigators reportedly concluded that YouTube had violated the act in question, is how changes will impact content creators. One possible solution would simply be to move the content for kids — and, consequently, viewers and creators — to YouTube Kids. That would result in effective demonetization of those videos.
The streaming video provider has also considered and apparently stopped running targeted ads on those same videos. That change will already impact revenue generated by and for YouTubers. It will likely be less impactful than a move to switch channels entirely would be.
The apparent settlement is a close shave for embattled Google
This isn't the first time Google has run into trouble with authorities around the globe over its use of data and likely won't be the last — despite the company's best efforts. The search giant has faced increasing scrutiny due to practices pertaining to everything from how it surfaces content to data collection and anti-competitive behavior.
Its latest brush with regulators was arguably a much closer ordeal. Finalizing the settlement with the FTC also could serve to help level the playing field for video streaming apps by creating a clearer division between kid-friendly and more mature offerings from Google.
Sources close to the investigation have stated that the settlement was reached with only a three-to-two vote. Finer details about any policy or practice changes Google's subsidiary might need to make have not been disclosed. That's likely pending approval from the Justice Department. But there is also a chance that it will turn down the settlement outright and seek harsher consequences.
So Google may not quite be safe from stronger repercussions just yet. It isn't apparent how its apps or services might change as a result of the settlement.