The Walt Disney Company has agreed to pay a $10 million settlement following accusations by the US Federal Trade Commission (FTC) that it unlawfully allowed children’s personal data to be collected. The issue arose from Disney’s failure to properly designate its child-targeted content on YouTube, which led to the collection of viewers’ personal information without parental consent.
According to the FTC, Disney violated the Children’s Online Privacy Protection Act (COPPA) by not informing its audience that it was tracking their data and failing to secure parental consent for such tracking. The FTC alleged that Disney’s corporate policy was to set its YouTube channels as either for or not for children, but it failed to appropriately label a significant number of child-targeted videos when uploading them to channels classified as not made for kids.
The affected YouTube channels included Disney, Pixar, Disney Plus, Walt Disney Studios, Disney Animation Studios, Disney Movies, and Disney on Ice, all of which were allegedly marked as not made for kids. As a result, even clips from popular children’s movies such as Frozen, Moana, Cars, and Tangled were similarly marked, allowing YouTube to collect personal information and place targeted advertisements on these videos.
The FTC announced the settlement, which includes a 10-year program for Disney to review all its YouTube videos and designate them as either for or not for kids. The settlement does not involve Disney-owned and -operated digital platforms, but rather its content distribution on YouTube’s platform. A Disney spokesperson stated that the company has a long tradition of embracing high standards of compliance with children’s privacy laws and remains committed to investing in the necessary tools to continue being a leader in this space.
The issue was first brought to Disney’s attention in June 2020, when YouTube informed the company that it had changed the designations for over 300 videos from not made for kids to made for kids. However, Disney did not revise its policy, resulting in the continued collection of personal information and placement of targeted advertisements on child-directed videos.
The settlement reinforces the importance of complying with COPPA, which requires companies to obtain parental consent before collecting personal information from children under 13. The incident highlights the need for companies to ensure that their policies and practices are aligned with regulatory requirements to protect children’s online privacy.
