Creators say YouTube's new labeling policy for kids' content that holds creators solely accountable are murky, as some video categories fall in a gray area
The government could sue them for thousands of dollars — On Tuesday afternoon, YouTube formally announced its plan to have creators label … Tweets: @stopskeletons , @nickonripple , @kellymakena , @waxpancake , and @loudmouthjulia Tweets: @stopskeletons : Good overview! Features a quote from @PixelDan, whose channel is in limbo after YouTube decided it was targeted towards kids https://twitter.com/... Nick Anderson / @nickonripple : “The FTC made it clear that it could sue individual channel owners who abuse this new labeling system. Crucially, those lawsuits will fall entirely on channel owners, rather than on YouTube itself.” Wait, WHAT?!!! Are we gonna be sued to oblivion or not?? https://www.theverge.com/... Makena Kelly / @kellymakena : Yesterday, YouTube started rolling out a new labeling system for creators as a result of its $170 million COPPA settlement with the FTC. YouTubers are freaked out and afraid the government will sue them for thousands if they mislabel videos. https://www.theverge.com/... Andy Baio / @waxpancake : Like many of his friends, my 15-year-old son livestreams Minecraft on YouTube, and they're *all* freaking out about this change—panicking not just about losing critical features like comments and chat, but getting fined by the FTC. https://www.theverge.com/... Julia Alexander / @loudmouthjulia : YouTubers are beginning to feel YouTube's changes in compliance with COPPA and FTC guidelines. It's ... extremely confusing, and consequences are potentially terrifying for creators. @kellymakena spoke to lawyers and looked at what the implications are and what happens next. https://twitter.com/...
Context & Ripple Effects
This is the fallout from the FTC's probe into children's video privacy, which ended in a $170 million COPPA settlement whose conditions — stripped comments and notifications — were always going to hit creator revenue. The new labeling system is how YouTube implements that settlement: creators must self-identify kids' content, and gray-area channels like toy reviewers are left guessing.
The stakes are asymmetric by design. The FTC has said it can sue individual channel owners who mislabel, so the legal exposure lands on creators while YouTube keeps its platform position. That echoes the earlier kidfluencer sponsored-marketing minefield, where unmarked ads targeting under-13s already put individual channels on the hook.
First-order effects
- Channels in the gray zone — gaming, toy, and family content like @PixelDan's — face an impossible call: label as kids' content and lose comments, notifications, and revenue under the settlement terms, or don't label and risk an FTC lawsuit they alone would pay for.
Second-order effects
- Rational creators will over-label rather than risk federal liability, pushing more videos into the restricted kids' tier than the policy intends — compounding the revenue depression already built into the YouTube-FTC deal and shrinking ad inventory across adjacent categories.
Third-order effects
- If the pattern holds, COPPA enforcement accelerates the shift of regulatory liability onto individual creators as contractors — YouTube avoids being treated as a media company (it reportedly dropped plans to screen all under-8 videos into YouTube Kids for exactly that reason) while the people with the least legal resources absorb the compliance risk.
The trend: Platform regulation is increasingly enforced through creator self-certification, moving liability from the distribution layer to individual channels.