September 19, 2019

Google's Slap on the Wrist

“The federal government has levied a record-setting fine against a giant internet platform for abusing its users’ privacy. Critics say the government hasn’t done nearly enough.

Yes, that was also the takeaway in July, when the US laid out a $5 billion penalty against Facebook. It’s also today’s news: Google’s YouTube has agreed to pay $170 million in fines to settle Federal Trade Commission charges that it illegally harvested children’s personal data, which it used to serve them personalized ads.

First things first: $170 million ($136 million will be paid to the FTC and another $34 million to New York state, which joined the Feds’ case) is a record for companies accused of violating the 1998 Children’s Online Privacy Protection Act. It’s also basically a rounding error in terms of profits for Google and YouTube.

Google’s parent company Alphabet may generate $161 billion in revenue this year; RBC analyst Mark Mahaney thinks YouTube will generate $20 billion of that.

That alone is enough to make the settlement unsatisfactory to the FTC’s Rohit Chopra, who voted against the Facebook deal and also dissents today. “Financial penalties need to be meaningful or they will not deter misconduct,” Chopra writes in a statement, which is partially redacted but indicates that he wanted Google to pay something in the billions for its sins.”

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