A child sits down to stream a cartoon, but behind the scenes, their personal data may have been quietly collected. That alleged practice has now left Disney facing a $10 million fine.
The Federal Trade Commission announced the penalty after finding the company violated the Children’s Online Privacy Protection Rule, known as COPPA. Regulators said Disney gathered personal information from kids watching youth-focused videos without proper safeguards.
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What COPPA requires
COPPA requires companies that run websites, apps or other online services aimed at children younger than 13 to follow strict rules surrounding their personal data. Lawmakers designed the law to give parents control over information collected about their kids.
The FTC sent the allegations to the Justice Department, which filed a complaint saying Disney failed to properly label certain YouTube videos as “Made for Kids.”
“Our order penalizes Disney’s abuse of parents’ trust, and, through a mandated video-review program, makes room for the future of protecting kids online — age assurance technology,” said Andrew N. Ferguson, FTC chairman.
Settlement terms for Disney
Under the settlement, Disney will pay a $10 million penalty, follow COPPA’s rules by notifying parents and getting their consent before collecting data from kids under 13. Disney must also set up a system to check whether it should label its YouTube videos as “Made for Kids.” That requirement could change if YouTube adopts technology to verify users’ ages or takes over the labeling process itself.
In 2019, YouTube told creators, including Disney, they had to label their videos as either “Made for Kids” or not. The label matters because it determines whether YouTube enables features like comments, autoplay and targeted ads for the video.
What Disney says about settlement
Disney emphasized that the settlement involves a small number of its YouTube videos. However, the company acknowledged mistakes in labeling those videos, prompting the decision to resolve the FTC’s complaint.
“Supporting the well-being and safety of kids and families is at the heart of what we do,” a Disney spokesperson said. “This settlement does not involve Disney-owned and -operated digital platforms, but rather is limited to the distribution of some of our content on YouTube’s platform.”
Where Disney fell short
According to the Justice Department’s complaint, Disney often left child-focused videos on channels marked “Not Made for Kids,” which meant that YouTube treated them like general-audience content. As a result, features that collect personal information stayed active on those videos.
The complaint points to examples on Disney’s own YouTube channels, including Pixar, Disney Plus, Disney Animation Studios and others, where clips from “Frozen,” “Moana,” “Cars” and Mickey Mouse cartoons were not marked for children even though they clearly appealed to young audiences. Regulators say YouTube warned Disney as early as 2020, when YouTube itself reclassified hundreds of its videos as “Made for Kids.” Despite the warning, Disney did not change its overall approach.
The government argued that Disney benefited from the extra ad revenue while it collected children’s personal data without proper parental consent.
Google’s previous COPPA settlement
Google, YouTube’s parent company, faced a similar issue in 2019 when the company agreed to pay $170 million to settle allegations that YouTube collected personal information from children without parental consent.
That settlement required Google to strengthen its practices for labeling videos aimed at young audiences and to prevent targeted advertising on content directed at children.
