Google, YouTube content providers must face U.S. children's privacy lawsuit

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By Jonathan Stempel

(Reuters) - A U.S. appeals court on Wednesday revived a lawsuit accusing Alphabet (NASDAQ:GOOGL) Inc's Google and several other companies of violating the privacy of children under age 13 by tracking their YouTube activity without parental consent, in order to send them targeted advertising.

The 9th U.S. 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.

That law gives the Federal Trade Commission and state attorneys general, but not private plaintiffs, the authority to regulate the online collection of personal data about children under age 13.

The lawsuit alleged that Google's data collection violated similar state laws, and that YouTube content providers such as Hasbro Inc (NASDAQ:HAS), Mattel Inc (NASDAQ:MAT), the Cartoon Network and DreamWorks Animation lured children to their channels, knowing that they would be tracked.

In July 2021, U.S. District Judge Beth Labson Freeman in San Francisco dismissed the lawsuit, saying the federal privacy law pre-empted the plaintiffs' claims under California, Colorado, Indiana, Massachusetts, New Jersey and Tennessee law.

But in Wednesday's 3-0 decision, Circuit Judge Margaret McKeown said the federal law's wording made it "nonsensical" to assume Congress intended to bar the plaintiffs from invoking state laws targeting the same alleged misconduct.

The case was returned to Freeman to consider other grounds that Google and the content providers might have to dismiss it.

Lawyers for Google and the content providers did not immediately respond to requests for comment. The children's lawyers did not immediately respond to similar requests.

In October 2019, Google agreed to pay $170 million to settle charges by the FTC and New York Attorney General Letitia James that YouTube illegally collected children's personal data without parental consent.

The plaintiffs in the San Francisco case said Google did not begin complying with COPPA until January 2020.

Their lawsuit sought damages for YouTube users age 16 and younger from July 2013 to April 2020.

The case is Jones et al v. Google LLC et al, 9th U.S. Circuit Court of Appeals, No. 21-16281.