YouTube has agreed to stop targeted ads that appear during videos that children are likely to watch, said sources. The Federal Trade Commission, which has been investigating whether YouTube violated the Children’s Online Privacy Protection Act (COPPA), reached an agreement with the company but hasn’t made its terms public yet. It isn’t clear whether YouTube’s move to end targeted ads in children’s videos is in response to the settlement. The move is expected to impact ad sales, and sources said YouTube’s plans could change.

Bloomberg reports that the FTC also “is expected to levy a multimillion-dollar fine” against YouTube. COPPA bans targeted or “behavioral” ads for children under 13 without parental permission since it is based “on collecting information about the viewer.”

But these kinds of ads, which rely on huge amounts of digital data, are key to YouTube’s business. The Google-owned company “has long maintained that its primary site is not for children” and points to the YouTube Kids app, which doesn’t use targeted ads. Still, the main site has a great deal of content aimed at kids that has “billions of views.”

But ending targeted ads is less onerous for YouTube than the other remedies suggested by consumer groups, which wanted the company to move all kids’ videos to YouTube Kids. FTC chair Joseph Simons suggested that YouTube could disable ads on these videos.

YouTube proposed, instead, that it simply doesn’t use “an array of digital signals” to target specific demographic groups for videos likely to be watched by children, similar to what Apple has already done. According to Loup Ventures, YouTube’s revenue from children’s media is between $500 million and $750 million a year. Its analyst Doug Clinton said that that “the potential impact of YouTube curbing targeted ads at 10 percent of its overall intake from kids’ videos — so about $50 million.”

Less clear is “how YouTube would deliver this targeting ban with the thousands of video channels with whom it splits ad sales … [as well as] how YouTube would define which videos are ‘directed at children’ and which aren’t.” But YouTube’s proposal is “unlikely to please complainants,” who have already made the point that “bans on YouTube ad targeting would be difficult to enforce.”

Campaign for a Commercial-Free Childhood’s Josh Golin noted that “removing the feature from select kids’ videos doesn’t guarantee that YouTube stops tracking web habits if children watch other clips.” Center for Digital Democracy executive director Jeff Chester noted that “if the FTC settlement only forced YouTube to curb targeting, his group would likely challenge the decision.”

Related:
As YouTube Mulls Changes to Kids’ Content, Rival Services See Opportunity, Bloomberg, 8/21/19
YouTube Is Closing Its Private Messages Feature…and Many Kids Are Outraged, TechCrunch, 8/21/19