Google Gets Off Easy, FTC Fines Them $200M Fine For Children’s Privacy Violations

This is not investment advice. The author has no position in any of the stocks mentioned. has a disclosure and ethics policy.

According to Politico, Google parent Alphabet (NASDAQ:GOOGL), will be slapped with a $150 to $200M fine for violations of children's privacy laws.

The Federal Trade Commission voted 3-2 to approve the fine, and details should be released publicly in the coming days.

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Earlier this Summer The Washington Post first broke the story that YouTube had failed to put in place protections that would safeguards kids privacy online and that the FTC was considering a large fine against Google. At the time some were saying the fine could be in the billions.

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Critics wasted no time today in voicing their displeasure as the news began to circulate. Democratic Senator Ed Markey (D-Mass) said, "the FTC appears to have let YouTube off the hook with a nominal fine for violating users’ privacy online. And in this case, Google’s intrusions on kids’ personal info are at issue. We must come down hard on companies that infringe on children’s privacy.”

And this would be close to what most Democrats would say as the party has begun cast a crtitical eye in the direction of big tech, namely at Google, Amazon (NASDAQ:AMZN), Facebook(NASDAQ:FB), and Microsoft(NASDAQ:MSFT).

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Presidential hopeful Elizabeth Warren has based her platform on breaking up some of these companies and believes that much tighter regulation and closer scrutiny is needed to protect consumers of alleged rampant abuse of things like privacy and digital rights.

While it's going to be a matter of opinion what a proper settlement amount would be, the general understanding is that a fine is meant to be a preventative measure, since a fine like this would never make it to the actual victims (consumers). In fact, to counter some of that criticism we could point out that the FTC recently levied a record-breaking fine against Facebook in the sum of $5 billion just a few months ago.

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When it comes to the actual heart of the matter, YouTube crossed the Children's Online Privacy Protection Act (COPPA) by illegally targeting minors for data collection. It's impossible to say where this data ended up. The bad version is that kids as young as 5 years old might now have a file at any number of online marketing firms, for instance.

What we do know is that $150 to $200M is a complete slap on the wrist for a company like Google. How many billions did reaping user data illegaly net them? Privacy advocates say that under COPPA the FTC had the power to sue Google for tens of billions of dollars, and when you step back and look at the matter, Google most likely got off with an overwhelmingly light settlement.

Despite the "good" news, Google shares ended the day down slightly by 0.3% to $1,190 per share. Google's 52-week high is $1,296 which it hit in April.

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