Embedded Deception: How the FTC’s Recent Interpretation of the Children’s Online Privacy Protection Act Missed the Mark

By Olivia Levinson. Full Text.

Every year, YouTube amasses billions of dollars in online advertising revenue. While many advertisements play before, in between, and after YouTube videos, there are often more elusive advertisements within the videos themselves. Embedded advertisements within videos pose unique consumer protection concerns, especially as they pertain to young audiences. Ryan’s World, an immensely popular children’s YouTube channel that brings in close to $30 million a year, showcases how pervasive embedded advertisements are becoming and how they can influence consumer behavior.

The Children’s Online Privacy Protection Act (COPPA) was designed, in part, to limit how children’s online data is used to generate advertisement revenue. In 2019, the Federal Trade Commission and YouTube entered into a $170 million settlement over YouTube’s violations of COPPA. Though this settlement had a high dollar amount, it was favorable toward YouTube. Now, content creators, as opposed to strictly YouTube, are liable for COPPA violations. The risks of violating COPPA’s complex provisions could lead content creators to abandon traditional advertising in favor of embedded advertising. This Note proposes the FTC expand its interpretation of COPPA to encompass embedded advertisements. It then suggests that the FTC should focus on the content of videos, not just whether they are directed toward children. Finally, this Note proposes both the development of technology that can detect embedded advertisements and legislative solutions that expand COPPA. These solutions aim to redirect liability for COPPA compliance toward powerful corporations like YouTube, which benefit from and are able to utilize children’s data, and away from content creators, who are less equipped to navigate complex regulatory schemes.