Disney to pay $10 million to settle FTC allegations over children’s data

Investing.com -- Disney will pay $10 million to settle Federal Trade Commission allegations that the company allowed personal data to be collected from children who viewed kid-directed videos on YouTube without proper parental notification or consent.

The settlement, filed by the Department of Justice upon FTC referral, addresses violations of the Children’s Online Privacy Protection Rule (COPPA). According to the complaint, Disney failed to properly label some of its YouTube videos as "Made for Kids," which allowed the collection of personal data from children under 13 for targeted advertising.

"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.

Following a 2019 FTC settlement with YouTube over COPPA violations, YouTube began requiring content creators to designate videos as either "Made for Kids" (MFK) or "Not Made for Kids" (NMFK). Videos marked as MFK have certain features disabled, including personalized ads and comment sections.

The complaint alleges Disney chose to mark all its YouTube videos at the channel level rather than individually. This resulted in many child-directed videos being incorrectly labeled as NMFK by default. Even after YouTube informed Disney in mid-2020 that it had changed designations on more than 300 Disney videos from NMFK to MFK, Disney continued its channel-level designation policy.

The affected videos included child-directed content from popular franchises such as The Incredibles, Coco, Toy Story, Frozen, and Mickey Mouse.

Under the proposed settlement, Disney must pay the $10 million civil penalty, comply with COPPA requirements, and establish a program to review whether videos posted to YouTube should be designated as MFK. This review requirement would be waived if YouTube implements age assurance technologies that can determine the age of all users or changes its content labeling system.

The settlement was approved by a 3-0 Commission vote before being filed in the U.S. District Court for the Central District of California, Western Division.

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