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Recode Daily: What YouTube’s paltry $170 million fine tells us about tech’s regulatory reckoning

Plus: WeWork is adding a woman to its board … finally. 

Photo illustration of a Youtube logo displayed on a cellphone screen. Photo Illustration by Omar Marques/SOPA Images/LightRocket via Getty Images

YouTube will pay $170 million to settle charges it violated kids’ privacy and a 1998 law. That’s a pittance. Google’s YouTube has agreed to pay the fines to settle Federal Trade Commission charges that it illegally harvested children’s personal data, which it used to serve them personalized ads. The $170 million is a record for companies accused of violating the 1998 Children’s Online Privacy Protection Act. It’s also basically a rounding error in terms of profits for Google and YouTube. (Google’s parent company Alphabet may generate $161 billion in revenue this year; one analyst estimates that YouTube will generate $20 billion of that.)

  • The bigger issue is whether YouTube is fundamentally going to change the way it does business. YouTube says it is going to overhaul how it interacts with kids who watch videos on its massive platform, but critics doubt the platform’s commitment to that pledge.
    [Peter Kafka / Recode]

More trouble for Google: More than half of the nation’s state attorneys general are preparing to investigate Google for potential antitrust violations. The Washington Post broke news of the investigation ahead of its planned announcement next week. According to the Post, the investigation follows growing skepticism toward the tech giant as states such as Louisiana, Mississippi, and Texas “have sharply criticized Google for its handling of users’ personal information and its algorithms for surfacing search results.”

  • What we don’t know: It is unknown if the same attorneys general plan to open more probes into other tech giants, like Amazon and Facebook, which are also being scrutinized for monopolistic practices on a federal level. It’s also unclear if the DOJ, which is doing its own review of big tech and their antitrust concerns, will join the states in their investigations.
    [Tony Romm / The Washington Post]

Amazon is testing a payment method at Whole Foods that involves scanning human hands. Right now, Amazon employees in New York City are testing the biometric technology “at a handful of vending machines to buy such items as sodas, chips, granola bars and phone chargers,” according to the New York Post. The system, which is codenamed “Orville,” allows Amazon Prime customers to scan their hands at a Whole Foods store and link them to their credit or debit card for payment. Sources told the New York Post that Amazon wants to start rolling the system out to stores in early 2020.

  • But why? The technology Amazon is developing could encourage Amazon consumers to spend more money when they shop at Whole Foods. Amazon has already reduced the human interactions that Prime members have at checkout at its “Amazon Go” convenience stores, where customers don’t even have to scan their items to pay for them.
    [Nicolas Vega / The New York Post]

WeWork is adding a woman to its board … finally. Just in time for its impending IPO, WeWork says it will add Frances Frei, a professor of technology and operations management at Harvard Business School, to its board, according to Reuters. The We Company, the parent company of WeWork, said it will seek to add another director to its board within a year of the IPO, “with a commitment to increasing the board’s gender and ethnic diversity,” in an amended filing.

  • In other news: We Company CEO Adam Neumann will return the $5.9 million the company paid him for the use of the trademarked word “We” ahead of the IPO. “The deal to pay Neumann for use of the ‘We’ trademark came after the decision to rebrand WeWork as the We Company earlier this year,” Reuters writes.
    [Joshua Franklin / Reuters]

Top Stories from Recode

How Amazon’s Ring is creating a surveillance network with video doorbells. Here’s everything we know about Amazon’s video doorbell and the controversies surrounding it.
[Rani Molla]

Was Etsy too good to be true? The people who built Etsy dreamed of remaking commerce with their bare hands. Fifteen years later, its sellers are being asked to compete with Amazon.
[Kaitlyn Tiffany]

Facebook will finally ask permission before using facial recognition on you. You’re being asked to opt in — years after the technology became part of your social media experience.
[Sigal Samuel]

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