Disney Settles FTC Allegations Over Children's Data
Disney agreed to pay $10 million to settle Federal Trade Commission allegations that it unlawfully collected children's personal data by failing to properly label certain YouTube videos as 'made for kids.'
Disney has agreed to a $10 million settlement with the Federal Trade Commission (FTC) after the agency alleged that the entertainment giant violated federal children's privacy laws in its handling of certain YouTube videos. The FTC charged Disney with failing to properly label some videos as 'made for kids,' a requirement under the Children’s Online Privacy Protection Act (COPPA), thus exposing young viewers to targeted advertising and unauthorized data collection.
How the Violation Occurred
According to the FTC's complaint, Disney Worldwide Services and Disney Entertainment Operations uploaded videos to YouTube—many during the early days of the COVID-19 pandemic—that were aimed at children but not designated as such on the platform. These included popular storytime videos featuring celebrities reading to children and content from franchises like "Coco," "Frozen," and "Toy Story." The mislabeling enabled YouTube’s algorithms to treat the content as general audience material, allowing the collection of personal data from children under the age of 13 without parental consent.
The FTC emphasized that Disney’s actions violated COPPA, which mandates that operators of commercial websites or online services directed at children must provide direct notice to parents and obtain their consent before collecting personal information from children. The improper labeling, the FTC said, facilitated the 'unlawful collection' of children's personal data and exposed them to age-inappropriate features on YouTube.
Settlement Terms and Industry Implications
As part of the settlement, Disney will pay a $10 million penalty and is required to establish an 'Audience Designation' program to ensure videos uploaded to YouTube are accurately categorized going forward. The settlement does not involve Disney’s own digital platforms, but rather pertains to content distributed on YouTube. Disney has stated that these videos represent a small fraction of their overall uploads but conceded an error in their labeling process at the time.
The FTC’s order also mandates that Disney create a video-review program to prevent future violations and to bolster compliance with children’s privacy standards. This case marks the first time a YouTube content provider, rather than the platform itself, has faced FTC penalties for children’s privacy violations since YouTube’s own landmark settlement in 2019. The move is seen as a warning to other content providers that distribute material on third-party platforms, signaling that they too may be held accountable for privacy compliance.
In response, Disney reiterated its commitment to children’s privacy, stating, "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." The company added that it remains dedicated to maintaining the highest standards of compliance and will continue to invest in tools to protect children online.
The FTC’s action comes as regulators and platforms like YouTube face increasing scrutiny over how children’s data is handled online. YouTube, for its part, has recently begun testing new age estimation tools and continues to emphasize its responsibility to protect young users.