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The Federal Trade Commission (FTC) is currently seeking comments on new rules that would further restrict platforms' efforts to monetize children's data.

Through the Children's Online Privacy Protection Act (COPPA), the FTC initially sought to give parents more control over what kinds of information that various websites and apps can collect from their kids. Now, the FTC wants to update COPPA and "shift the burden from parents to providers to ensure that digital services are safe and secure for children," the FTC's press release said.

“By requiring firms to better safeguard kids’ data, our proposal places affirmative obligations on service providers and prohibits them from outsourcing their responsibilities to parents,” FTC chair Lina Khan said.

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Four nonprofit groups seeking to protect kids' privacy online asked the Federal Trade Commission (FTC) to investigate YouTube today, after back-to-back reports allegedly showed that YouTube is still targeting personalized ads on videos "made for kids."

Now it has become urgent that the FTC probe YouTube's data and advertising practices, the groups' letter said, and potentially intervene. Otherwise, it's possible that YouTube could continue to allegedly harvest data on millions of kids, seemingly in violation of the Children's Online Privacy Protection Act (COPPA) and the FTC Act.

The first report alleging YouTube's noncompliance with federal laws came last week from Adalytics and was quickly corroborated by research from Fairplay, one of the groups behind the FTC letter, The New York Times reported . Both groups ran ad campaigns to test if YouTube was really blocking all personalized ads from appearing in children's channels, as YouTube said it was. Both found that "Google and YouTube permit and report on behavioral ad targeting on 'made-for-kids' videos, even though neither should be possible under COPPA."

Microsoft will face new restrictions on what it can do with this young player's info. (credit: Aurich Lawson / Thinkstock)

Microsoft will pay $20 million to settle an FTC complaint that its Xbox platform illegally collected and retained information about children without their parents' consent, in violation of the Children’s Online Privacy Protection Act (COPPA).

According to the FTC complaint in the matter, Microsoft's Xbox account sign-up process asked children under 13 for their name, date of birth, email address, and phone number, all before parents got involved in the sign-up process.

The complaint also alleges that Microsoft did not specifically notify parents that information such as uploaded photos and gameplay data associated with their player ID would be collected and potentially shared with third parties. Instead Microsoft included these specifics in a Privacy Statement, which the FTC says was akin to "sending parents off on what amounted to a DIY errand."

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An appeals court has revived a lawsuit against that accuses Google, YouTube, DreamWorks, and a handful of toymakers of tracking the activity of children under 13 on YouTube. In an opinion released Wednesday , the Ninth US Circuit Court of Appeals ruled that the Children's Online Privacy Protection Act does not bar lawsuits based on individual state privacy laws.

Passed in 1998 and amended in 2012, COPPA requires websites to obtain parental consent for the collection and dissemination of personally identifiable information of children under the age of 13. COPPA gives the FTC and state attorneys general the ability to investigate and levy fines for violations of the law.

Several states across the US have laws similar to COPPA on the books. The revived lawsuit cites laws in California, Colorado, Indiana, and Massachusetts to argue that Hasbro, DreamWorks, Mattel, and the Cartoon Network illegally lured children to their YouTube channels in order to target them with ads.