The chairman of the Federal Trade Commission asked children's privacy advocates whether having video creators on YouTube disable ads could resolve concerns the site is violating laws to protect kids, according to a person familiar with the conversation.
During a July 1 call, Chairman Joseph Simons and fellow Republican Commissioner Noah Phillips suggested the world's largest video site wouldn't need to move all children's content to a separate platform as advocates have proposed, according to the person. Instead, individual channels could disable advertising to bring the site into line with a U.S. law's ban on collecting information on children under age 13 without parental permission.
The FTC is investigating Google's YouTube for potential violations of the Children's Online Privacy Protection Act. The heads of two kids groups who had previously filed complaints against the site participated in the conversation, the person said.
The commissioners didn't say if they were leaning toward the solution, nor did they concede the existence of the investigation, said the person, who requested anonymity to talk about discussions that aren't public, although the high-level call appeared to be a sign that the agency is moving toward a settlement.
The two groups that participated in the call -- the Campaign for a Commercial-Free Childhood and the Center for Digital Democracy -- wrote in a July 3 letter released Monday, that it wasn't clear that disabling the presentation of ads would stop data collection. Video creators would likely be opposed to removing ads because it would harm their revenue, the letter said.
"We are concerned about any remedy that would allow children's content to remain on the main YouTube site and shift the burden of responsibility to content creators to opt out of 'interest-based' advertising," the letter said.
The groups have pushed commissioners to embrace a range of fixes, from record fines to requiring the company to move all kids' content to another platform where it would be harder to monetize.
The settlement could resemble the February agreement with the app now known as TikTok, kids' privacy experts said. The popular teen video service agreed to pay a record $5.7 million to resolve claims it failed to obtain parental consent before collecting names, email addresses and other information from children. It also agreed to delete the data.
The activists want the agency to go farther. In addition to fines, they have previously written that they want a requirement that YouTube secure FTC sign-off for any new child-directed services and for the company to move kids' content to a separate platform without targeted ads, commercial data collection, links, recommendations or autoplay.
Last year, a coalition of more than 20 child advocacy and privacy groups, including those on the FTC call, filed a complaint with the agency, alleging YouTube knowingly collected data on and pushed ads to children younger than 13. YouTube technically doesn't let children have accounts on the site but executives have acknowledged kids watch YouTube regularly.
Amid the investigation, YouTube is considering changes to how it handles content for kids, according to a person familiar with the company's discussions, who stressed they were unlikely to go as far as moving all kids' videos to its separate YouTube Kids app. Data say fewer children currently use the app than the number that watch the main site.
Research firm Loup Ventures estimates that 5%, or roughly $750 million, of YouTube's annual revenue comes from content aimed at children. Alphabet Inc., which owns Google, doesn't break out sales for the video site.