Big tech companies like YouTube owner Alphabet and many others will face further restrictions on how they use children's data to boost profits under a proposal released Wednesday by the Federal Trade Commission.
The FTC said in a notice of proposed rulemaking that it is considering changing the Children's Online Privacy Protection Rule to place more restrictions on when and how companies can monetize children's data.
It would also limit how companies can use messaging to get kids to stay online. This rule affects companies that collect personal information about users under the age of 13.
“Kids should be able to play and learn online without being constantly tracked by companies trying to collect and monetize their personal data,” FTC Chairwoman Lina Khan said in a statement. “The changes proposed in COPPA are sorely needed, especially in an age where online tools are essential to navigating everyday life.”
Since many platforms and websites on the Internet are free, companies rely on advertising to pay their bills. They try to tailor these ads using information about users that indicate what they might be interested in.
Critics have accused the platforms of failing to account for mental health harm in the algorithms used by the platforms to keep young people engaged.
Under the proposed changes, companies would have to obtain “separately verified parental consent” to share most information about children with advertisers and other third parties.
The proposed changes would reinforce that companies cannot ban children's activities if they refuse to collect personal data and would allow school districts to prohibit companies that provide educational technology from using any information they collect for commercial purposes.
The FTC said it will accept comments on the rule for 60 days.
Neither Alphabet nor Meta immediately responded to a request for comment.