Sara Collins – Privacy – Youtube and FTC Settlement

Satish: You’re listening to the Digital Identity Show. This is your host Satish, and today I have Sara Collins. She’s a policy counsel for Education Privacy Project and she’s with the Future of Privacy Forum. Sara previously worked on as an investigations attorney in the enforcement unit at Federal Student Aid. Today she joins our show to talk about the recent YouTube and FTC settlement and COPPA. Welcome to the show, Sara, how are you?

Sara Collins: I’m doing well. Thank you for having me.

Satish: Yeah, it’s great to have you. So, wanted to understand, I think there was a recent settlement between YouTube and FTC. Can you give us a little bit of the details and how is it related to kids’ privacy and a little bit, maybe, more about COPPA?

Sara Collins: Sure. Great. So COPPA, or COPPA, as I like to call it, I don’t know if there’s a true way of saying it, is the Children’s Online Privacy Protection Act. It was passed in the end of 1998, went into effect in 2000, so it’s about 20 years old, give or take.

Sara Collins: It lays out some things that, right now, would seem really basic but were a bit new at the start of the internet age, so that if you had a website that was directed toward children, you had to have privacy policy and you had to outline certain things in that privacy policy. It also told you when you needed to get consent from parents and how you sought the verifiable consent, and certain marketing restrictions and other things.

Sara Collins: With that background, and it sort of being one of the first privacy laws at the federal level, at least as it pertains to, specifically, the internet, we now have had this gigantic YouTube settlement. To put it in context, this settlement was for 170 million and it was split 34 million to the New York attorney general and 136 million to the FTC. Before that, the largest COPPA settlement was actually in February of this year, and it was against Musical.ly, or also known as TikTok, and that settlement was 5.7 million. So this is a very big jump. And it tells us a couple of things.

Sara Collins: In the YouTube settlement, what it hinges on is something called actual knowledge. Now, YouTube is not directed at children per se. It’s a general audience platform. It’s like Facebook or Twitter or any other sort of broad-reaching platforms. There’s lots of different people on it, lots of different kinds of content on it. But because YouTube knew there was child-directed content on it, and the way the FTC decided they knew was because there was evidence of YouTube’s board members talking about child-directed content, having sales meetings where they would tell toy makers or other people who might want to advertise, that they were the most popular website for girls, six to 11, and other sort of representation, that that meant they knew that they have had kids on the website, which means they triggered COPPA responsibilities.

Sara Collins: This is important for a couple of reasons. It sort of gets rid of the fallacy that actual knowledge means you know specifically what kid is on your website, where. Actual knowledge is a bit broader than that. It has much more to do with, I know there are kids on this site and I am representing the other. You’re making some sort of material representation.

Sara Collins: I’m going back to the TikTok settlement because I think it’s also useful to understand where we are with the Google settlement. They also talked about TikTok’s board having specific Tumblr posts for their younger users explaining the mechanics of things like that. If you’re interacting with the outside world with the knowledge that there are children on your site, that could be imputed to have actual knowledge. I think that’s really big and one of the big parts of the settlement.

Satish: Okay. What are some of the key observations to understand the case? Right, if I’m a newbie, I’m starting off a website or something like that. And what are some of the takeaways for me from this specific settlement?

Sara Collins: A great question. So, if you’re a child-directed website, you have a child-directed channel on YouTube, behavioral advertising or targeted advertising or however you’d like to call it, when the advertising is based on information about yourself, that’s a no-no. You can’t do it.

Sara Collins: You can have contextual advertising. So, if you have a channel dedicated to My Little Pony, and My Little Pony sees that, you can solicit and you can have advertising from My Little Pony because, obviously, from context, the people that are watching your content or on your website are probably interested in that product. But you can’t use the much more targeted contextual or behavioral advertising.

Sara Collins: Now this is important to note for one very specific reason, is, right now, behavioral advertising, behavioral marketing, pays much better. So even in the settlement that they mentioned, channel operators could choose whether or not to turn on behavioral advertising, and YouTube, if you don’t know this, is based on a revenue-sharing model. YouTube gets something like 60-ish percent of the advertising revenues. The creator, if they’re monetized, gets about 40. It varies a bit and there’s other considerations, but let’s just use those numbers because they make it easy.

Satish: Sure.

Sara Collins: YouTube had a bit of an incentive to remind creators that if they only had contextual advertising, they’d be getting less money because YouTube would also be getting less money because their ads are worth less. What we see from this is that, right now, children’s content, at least as how we monetize the internet and how creators have monetized the internet, is less lucrative.

Satish:  And one last question, right? It’s a relatively big settlement. What changes do you expect to see at YouTube and others based on this ruling? Any thoughts around that? How this will impact the future marketing to kids? How does that impact?

Sara Collins: Yeah. I’m going to take that in two questions. First, let’s just talk about YouTube because we actually have a blog post from Google and YouTube explaining what they’re changing in wake of the settlement.

Sara Collins: The FTC has actually given them a couple of months to come completely in compliance. And part of that is to educate all of the independent content creators on their site. So they’ve done one thing which is required in the settlement, which is create a button to tag your content as child-directed, which would turn on contextual advertising, but it would also mean that you can’t have comments on the page and you can’t put those videos into playlists.

Sara Collins: Another thing that YouTube is doing, which is not required by the settlement, and it was probably because the commissioners didn’t know how technically feasible it was, but YouTube is going ahead anyway, is having a machine-learning algorithm try to ID misidentified child-directed content on their main site.

Satish: Wow!

Sara Collins: So, yeah. This is a big step and they’re educating creators right now about the responsibilities, about the new buttons and the new responsibilities. But I think we know from YouTube’s history that whenever they put in a new like algorithmic or moderation tool, there are always bumps in the road. It’s always both over and under inclusive. I think most of the listeners on your show probably know that while machine learning and algorithm models have come a long way, they are still not perfect, and something as nuanced as what is child-directed is hard. It’s a subjective inquiry, fundamentally. I think that we’re going to see a lot of conversation about that in the coming months.

Sara Collins: Now, more broadly, what’s really interesting to me is that YouTube was treated almost like an ad network. There’s something if you were looking through COPPA compliance called the FTC FAQs on COPPA. And there are a whole bunch of questions about all the different requirements and it’s answered in a very plain language, approachable manner. And so one of the hypotheticals they address is, “I’m an ad network and I know some of the websites that I serve are child-directed, does that mean I have actual knowledge under COPPA?” And the FTC says “yes”.

Sara Collins: This is sort of the same thing. They’re treating YouTube as that third-party operator and the channel providers are like the websites in that example. They’re the first-party. I think what we’re going to be seeing is people who had never really considered themselves like a first-party operator, because they themselves aren’t collecting data. If you’re a YouTube creator, you don’t control what data is collected. You don’t even control how they distribute your analytics. It might come as a surprise that you have all this responsibility towards data that you don’t feel you have ownership over.

Sara Collins: And I think quite a few platforms that have this revenue-sharing model, and are come as you are and take what we have, or don’t, I think this is going to signal a big sea change going forward.

Satish: Sounds good. Thanks a lot, Sara, for educating us on the recent settlement and also COPPA, or COPA, however we call it, yeah.

Sara Collins: Thank you so much.

Satish is the host of the podcast Digital Identity Show that covers various topics related to Digital Identity, Fraud, Payments, Privacy and Security.