
The Walt Disney Company has agreed to pay a civil penalty of $10 million as part of a proposed settlement with the Federal Trade Commission (FTC) regarding accusations of breaching children’s privacy laws. This breach occurred due to the company’s failure to accurately label videos aimed at children on YouTube, which led to the illegal collection of personal data from minors under 13 without obtaining parental consent.
The FTC has charged Disney and its subsidiaries—Disney Worldwide Services, Inc. and Disney Entertainment Operations LLC—with infringing the Children’s Online Privacy Protection Act (COPPA). This was allegedly done by incorrectly categorizing numerous YouTube videos as “Not Made for Kids” (NMFK), even though the content was clearly designed for children, featuring popular franchises such as Frozen, Toy Story, Coco, and Mickey Mouse. These incorrect classifications purportedly allowed both YouTube and Disney to gather data for targeted advertising, which constitutes a direct violation of COPPA.
“This case underscores the FTC’s commitment to enforcing COPPA, which was enacted by Congress to ensure that parents—not companies like Disney—make decisions about the collection and use of their children’s personal information online,” said FTC Chairman Andrew N. Ferguson.
Mislabeling and Missed Warnings
As stated in the complaint filed by the Department of Justice on behalf of the FTC, Disney labeled entire YouTube channels as NMFK instead of tagging each video separately. This blanket approach reportedly resulted in hundreds of child-oriented videos being incorrectly labeled. Despite YouTube alerting Disney in 2020 about over 300 videos that had been mislabeled, the company allegedly persisted with its sweeping labeling method.
Consequently, young viewers may have been exposed to features that should have been turned off—such as personalized advertisements, autoplay, and comments—while their data was gathered without adequate notice or consent.
According to the proposed order, Disney will not only incur a $10 million fine but will also:
- Fully adhere to COPPA regulations, which include informing parents and securing verifiable consent prior to collecting data from children;
- Establish a video-level review process to assess whether content is “Made for Kids,” unless YouTube implements strong age verification technologies that can independently ascertain user age;
- Collaborate with FTC compliance initiatives in the future.
This settlement is part of an increasing effort by regulators to hold Big Tech and significant content creators responsible for the management of children’s data online. It also highlights the FTC’s focus on the future of age verification tools as a standard for protecting children’s privacy.
The complaint and settlement were submitted to the U.S. District Court for the Central District of California and are pending judicial approval.
This represents the latest in a series of privacy enforcement actions resulting from YouTube’s 2019 settlement with the FTC regarding similar COPPA infractions, which required the platform to have content creators label their videos as “Made for Kids” (MFK) or not.
As children’s screen time grows and digital content becomes increasingly personalized, the spotlight on online privacy protections for minors continues to intensify. The Disney case could set new precedents for how entertainment companies engage with young audiences—and how strictly regulators will enforce the rules.
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