A US appeals court reinstated a lawsuit accusing Google, owned by Alphabet, and several other businesses of violating the privacy of children under the age of 13 by monitoring their YouTube activity without their parents' permission and using that information to send them targeted advertisements.
The 9th US Circuit Court of Appeals in Seattle said Congress did not intend to pre-empt state law-based privacy claims by adopting the federal Children's Online Privacy Protection Act, or COPPA.
It grants the Federal Trade Commission and state attorneys general the power to control the online collection of personal information regarding children under the age of 13, but not private plaintiffs, Reuters reported.
The lawsuit claimed that YouTube content producers like Hasbro, Mattel, the Cartoon Network, and DreamWorks Animation enticed kids to their channels knowing that they would be tracked and that Google's data collecting violated similar state laws.
The action was dismissed in July 2021 by US District Judge Beth Labson Freeman in San Francisco on the grounds that the plaintiffs' claims under the laws of Tennessee, California, Colorado, Indiana, Massachusetts, and New Jersey were preempted by the federal privacy legislation.
However, Circuit Judge Margaret McKeown said in a 3-0 judgement on Wednesday that the phrasing of the federal law made it "nonsensical" to believe that Congress meant to prevent the plaintiffs from relying on state laws that address the same alleged misconduct.
Freeman was given the case back to explore any other defences Google and the content producers could have against it.
Requests for comment from Google's and the content providers' attorneys were not immediately fulfilled. Similar queries received no quick response from the children's attorneys.
In order to resolve complaints from the FTC and New York Attorney General Letitia James that YouTube had improperly gathered children's personal data without parental consent, Google agreed to pay $170 million (approximately Rs. 1,400 crores) in October 2019.
According to the plaintiffs in the San Francisco lawsuit, Google did not start adhering to COPPA requirements until January 2020.
In their complaint, they demanded compensation for 16 and under YouTube viewers between July 2013 and April 2020.
The case number is 21-16281 in Jones et al. v. Google LLC et al., 9th US Circuit Court of Appeals.