Critics, however, have said the fine is insignificant and that the required changes are inadequate.

The tech giant struck the deal with the Federal Trade Commission and New York’s Attorney General, who had accused YouTube of violating the federal Children’s Online Privacy Protection Act (COPPA).

The fine is the largest civil penalty ever obtained by the commission in a privacy case concerning children and dwarfs that made against TikTok earlier this year of $5.7m.

YouTube will also have to create a system asking video channel owners to identify the children’s content they post to ensure targeted ads are not used in such videos.

Furthermore, the website must obtain parents’ consent before it collects or shares personal details such as a child’s name or photos.

Susan Wojcicki, YouTube’s chief executive, said on Wednesday that “nothing is more important than protecting kids and their privacy”.

Senator Edward J. Markey, Democrat of Massachusetts, said the penalty was a slap on the wrist for the company.

“The FTC let Google off the hook with a drop-in-the-bucket fine and a set of new requirements that fall well short of what is needed to turn YouTube into a safe and healthy place for kids,” Mr Markey said in a statement.