Oath, the ad tech division of Verizon, has agreed to pay around $5m (£3.9m) to settle charges that it violated a federal childrens privacy law. The fine is the largest ever penalty in a case based on the Childrens Online Privacy Protection Act (COPPA).

An investigation by the New York Attorney Generals office found that, as AOL, Oath had conducted billions of auctions for ad space on hundreds of websites the company knew were directed to children under the age of 13. Through these auctions, AOL collected, used and disclosed personal information from the websites users in violation of COPPA, as part of its offering to advertisers to track and serve targeted advertising.

“COPPA is meant to protect young children from being tracked and targeted by advertisers online,” said Attorney General Barbara Underwood. “AOL flagrently violated the law – and childrens privacy – and will now pay the largest-ever penalty under COPPA. My office remains committed to protecting children online and will contine to hold accountable those who violate the law.”

The case focused on AOL and Oaths activity prior to November 2017, when its systems ignored any information that it receive from ad exchanges indicating that an ad space may be subject to COPPA.

Privacy issues are a growing concern among consumers and lawmakers. Earlier this year, a group of child advocacy, privacy and consumer rights organisations filed a complaint with the Federal Trade Commission, asking it to investigate YouTube for potential COPPA violations, arguing that while the sites terms claim its aimed at children older than 13, YouTube is clearly targeting younger children by hosting videos including cartoons, nursery rhymes and toy ads.