A U.S. appeals court revived a lawsuit accusing Google and several other firms of violating the privacy of children under the age of 13 by tracking their YouTube activity without parental authorization in order to send tailored advertising to them.
The federal Children's Online Privacy Protection Act, or COPPA, was not intended to pre-empt state law-based privacy claims, according to the 9th U.S. Circuit Court of Appeals in Seattle.
The Federal Trade Commission has the jurisdiction to levy fines of up to $42,530 for each infringement under COPPA, the strongest federal consumer privacy regulation in the U.S.
This statute grants the FTC and state attorneys general the power to control the online collecting of personal information regarding children under the age of 13, but not private plaintiffs.
The lawsuit was dismissed in July 2021 by U.S. District Judge Beth Labson Freeman in San Francisco, who ruled that the plaintiffs' claims under the laws of Tennessee, California, Colorado, Indiana, Massachusetts, and other states were preempted by the federal privacy legislation.
The lawsuit claimed that YouTube video producers like Hasbro Inc., Mattel Inc., the Cartoon Network, and DreamWorks Animation enticed youngsters to their channels knowing that they would track them in violation of similar state laws.
However, Circuit Judge Margaret McKeown said in a 3-0 decision on Wednesday that the phrasing of the federal law made it "nonsensical" to believe that Congress meant to prevent the plaintiffs from relying on state laws that address the same alleged misbehavior.
Freeman was given the case back to explore any other defenses Google and the content producers could have against it.
Regulatory authorities claimed that in October 2019, Google had knowingly and illegally harvested personal information from children and used it to make money by targeting them with advertisements. As a result, Google agreed to pay a record $170 million fine and make changes to protect children's privacy on YouTube.
The FTC approved the settlement by a vote of 3-2. YouTube also agreed to implement a mechanism that asks video channel owners to identify the children's content they broadcast so that targeted advertising are not displayed in such videos.
According to regulations, YouTube must also get parental authorization before collecting or sharing personal information like as a child's name or images.
YouTube stated that it has agreed not only to stop displaying targeted adverts on children's videos, but also to stop collecting personal data on anyone who watched such films, even if the business believed the viewer was an adult.
The business also stated that it would remove features on children's videos that entailed the usage of personal data, such as comments and notifications.
