YouTube is finalizing plans under which it will no longer play "targeted" advertisements on its main site for videos meant for kids, Bloomberg reported, citing people familiar with the discussion. While the plan is reportedly intended to satisfy U.S. regulators, it could negatively impact the Google-owned video giant's ad sales as kids' content on YouTube is immensely popular.
Targeted, or "behavioral" ads rely on collecting information from viewers. YouTube's new moves come even as the Federal Trade Commission, or FTC, was investigating whether the company breached the Children's Online Privacy Act, or COPPA. According to the report, the FTC has reached a settlement with YouTube, but details of the terms have not been released. Critics of YouTube have alleged that the company has collected vast data about children that visit its website in violation of the COPPA. Under COPPA, websites that collect information about children must provide parents with notice of this data collection and also obtain parental consent before collecting any information from children. While kids below thirteen are prohibited by Google's policies from signing up for a YouTube account, they are able to easily watch videos on the site.
In June, a U.S. senator and two consumer privacy groups urged the FTC to take action against YouTube following extensive evidence that the Google-owned video site was invading child users' privacy. Senator Edward Markey noted in his letter that YouTube appeared to collect information such as device identifiers and location without providing the requisite notice and obtaining parental consent.
According to the two consumer privacy groups, YouTube has "profited enormously" by hosting channels and videos specifically designed for children on the main YouTube platform. They also alleged that YouTube claimed its video site is not for children under thirteen, and therefore, no parental consent was required before collecting children's personal information. However, YouTube has said kids should use its YouTube Kids app, which does not use targeted ads. YouTube Kids is a separate platform with enhanced parental controls and curated video playlists.