YouTube is to pay $ 170m (£139.4m) over allegations it collected the personal data of children without parental consent.
The US Federal Trade Commission (FTC) fined the Google-owned platform $ 136m (£111m) after it violated a law requiring companies to gain the permission of parents before collecting personal details from their children.
This is the largest fine the FTC has ever levelled against Google, which will pay an additional $ 34m (£27.9m) following similar accusations by the New York state attorney general.
The company was said to have tracked viewers of channels targeted at children using cookies.
Cookies are downloaded to a computer when a website is visited for the first time, and on subsequent visits the data stored in those cookies is sent back – giving platform owners an idea of what users have seen before and what they might want to see next time, making them key for targeted advertising.
YouTube was accused of using these cookies to deliver million of dollars in targeted adverts to young viewers – putting them in breach of a 1998 law banning the collection of information about children under 13.
The video-sharing website had fought the case by saying its service is intended for those aged over 13, but younger children are regular users and many popular channels feature cartoons and other content made for them.
The company does offer a YouTube Kids app, but it does not feature behaviour-based advertising and recently introduced parental controls.
YouTube’s arguments held little weight with the FTC, which said YouTube touted its popularity with children while marketing itself to toymakers such as Mattel and Hasbro.
Commission chairman Joe Simons said: “YouTube touted its popularity with children to prospective corporate clients.
“Yet when it came to complying with federal law, the company refused to acknowledge that portions of its platform were clearly directed to kids.”
New York attorney general Letitia James said YouTube and parent company Google had “abused their power”.
She added that they had “knowingly and illegally monitored, tracked, and served targeted ads to young children, just to keep advertising dollars rolling in”.
Responding to the fines, YouTube said in a blog post that it would begin treating all data collected from people watching content targeted at children as if it came from a child.
That change in policy will be introduced by the end of the year.
Google will have little difficulty paying the money, as the total bill is a fraction of its revenues.
In July, parent company Alphabet, which generates about 85% of its revenue from sales of ad space and ad technology, reported total second-quarter revenues of $ 38.9bn (£31.9bn).
The fine falls well short of the $ 5bn (£4.1bn) imposed against Facebook earlier this year for privacy violations.