YouTube’s settlement with the Federal Trade Commission (FTC) over concerns with how the video platform handles content aimed at reaching children could potentially result in a change that might cost the company millions of dollars in ad sales, according to a Bloomberg report on Tuesday.
YouTube has been under investigation by the FTC for violating children’s privacy laws, specifically that the video giant had been collecting the data of children under the age of 13 — which would be a violation of the Children’s Online Privacy Protection Act (COPPA). In July, The Washington Post reported that a settlement had been reached and said that a fine, likely be in the “multimillion-dollar” range, would be handed to Google, YouTube’s parent company.
On Tuesday, Bloomberg reported that as an apparent attempt to appease regulators, YouTube plans to end its practice of allowing “targeted” ads on videos that children are more likely to watch — a decision that could cut the platform’s ad revenues by as much as 10%, representing $50 million annually, according to an industry analyst cited in the report.
Bloomberg said that it was not entirely clear if ending targeted ads on children’s videos was a part of the FTC settlement. It is also not clear how YouTube would actually put this idea into practice and determine which of the millions of videos on its platform were directed at children.
Both Google and the FTC declined Business Insider’s request for comment on the matter.
Still, Bloomberg said the impact would be one of the more conservative outcomes from proposed changes to the platform resulting from the investigation. One possible outcome, the report said, might be ending advertising on children’s videos altogether, whether those ads are targeted or not.
With news of the FTC investigation swirling since June, Google had been considering other major changes to its video platform to protect children, including moving all children’s content to YouTube Kids, a secondary app with increased moderation, according to Bloomberg. YouTube had also considered disabling the platform’s recommendation feature for children’s programming, according to reports.
This year, YouTube has already removed more than 800,000 videos that violated its child-safety policies.
It is unclear what the extent of the alleged FTC fine against YouTube will be, though in February, the agency levied a $5.7 million fine against TikTok, a video app geared toward teens, for not requiring parental consent before collecting data from users under the age of 13. Such a practice, the FTC decided, was in violation of COPPA.