AOL parent company agrees to pay $5M over children's privacy violations

Oath, the Verizon-owned media company that encompasses the former Yahoo and AOL brands, has agreed to pay $4.95 million to settle charges that it violated children’s online privacy by improperly tracking them and auctioning off their data to advertisers.

The settlement, reached with the New York attorney general’s office, is the largest-ever enforcement action under the 1998 Children’s Online Privacy Protection Act (COPPA).

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“COPPA is meant to protect young children from being tracked and targeted by advertisers online. AOL flagrantly violated the law — and children’s privacy — and will now pay the largest-ever penalty under COPPA,” state Attorney General Barbara Underwood said in a statement. “My office remains committed to protecting children online and will continue to hold accountable those who violate the law.”

According to Underwood’s office, AOL’s ad-placing business had not been COPPA-compliant until last year and the company had knowingly been disclosing data collected on children under 13 to third parties in violation of the law.

The prosecutor alleged that an AOL account manager in New York had manipulated the company’s ad systems to violate COPPA in order to increase revenue.

Under the agreement, Oath will be required to implement COPPA-compliant systems and to train its workforce on privacy practices. Oath will also have to destroy the information that it improperly collected.

“We are pleased to see this matter resolved and remain wholly committed to protecting children’s privacy online,” an Oath spokesperson said in a statement.

—Updated at 11:35 a.m.