Apparently whole thing happened cause Youtube fucked up. You need to be 13+ to make account in youtube and they made Youtube KIDS where younger kids can go and won't receive targeted ads. So all was supposed to be fine, but then FTC found out that kids still used main youtube and that youtube had been marketing itself to investors and advertisers by pragging how it's main platform for children between 6-12. Matpat was talking about this in his video:
@Kiseki FTC has made blog post to clarify some stuff (still quite confusing on what is child appealing), but they actually clarified about the fine and have said that FTC considers how much the business makes and if fine would cripple them before deciding on fine and how big it is. So they actually came down a bit and stopped fearmongering- at first their representative made these threatening statements but i guess they realized that youtube is also screwing over creators and creators aren't evil millionares that want to exploit children. Issue with COPPA is that it doesn't have understanding over digital spaces like youtube and it's really outdated in the first place.