Disney is set to pay $10 million for violating children’s privacy

The FTC claims Disney failed to mark YouTube videos “Made for Kids,” which allowed YouTube to serve targeted ads and collect data from children under 13 without parental consent, violating COPPA

The Walt Disney Company has agreed to pay $10  million to settle a lawsuit over its violating of children’s privacy.

The suit was brought by the Federal Trade Commission, which accused the entertainment giant of violating children’s privacy laws through its YouTube content. The FTC’s complaint centers on Disney’s failure to properly label certain videos uploaded to YouTube, many of which were uploaded during the COVID-19 pandemic, as “Made for Kids.”

Because these videos were mislabeled, YouTube was able to display targeted advertising and collect personal data from children under 13 without obtaining valid parental consent, in violation of the Children’s Online Privacy Protection Act.

This is the first known case in which a third-party YouTube content provider has reached a deal with the FTC over children's privacy concerns since the landmark 2019 settlement involving YouTube and its parent company, Google.

"Supporting the well-being and safety of kids and families is at the heart of what we do," a Disney spokesperson told Axios. "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."

Disney has agreed to pay $10million for violating children’s privacy via its YouTube content. (Getty Images)

Under the agreement, Disney has committed to implementing a comprehensive audience designation program to ensure its future content on YouTube is correctly marked as “made for kids” where appropriate. Additionally, Disney must institute a 10‑year compliance program, including age‑assurance technology and systematic video reviews, to prevent recurrence of such violations.

After a 2019 FTC settlement, YouTube began requiring creators—including Disney—to label their videos as either “Made for Kids” or “Not Made for Kids.” This designation affects certain features. For that content, YouTube disables personalized ads, data collection and comments, according to Disney's complaint.

Creators can label individual videos or set an entire channel as for kids or not for kids, which applies the setting to all uploads by default. However, YouTube has made clear that creators are ultimately responsible for accurately classifying their content.

The videos featured child-focused themes, visuals, and music from The Incredibles, Coco, Toy Story, Frozen and Mickey Mouse, according to the FTC.

The YouTube content in question included videos of The Incredibles, Toy Story and Frozen, along with from Disney channels such as Disney Junior and Pixar Cars. (AFP via Getty Images)

"Disney has a long tradition of embracing the highest standards of compliance with children's privacy laws, and we remain committed to investing in the tools needed to continue being a leader in this space," a Disney spokesperson said.

The Independent has contacted the Walt Disney Company for comment.

Enforcing children’s privacy online has been challenging due to inconsistent age verification standards. Major tech companies, including YouTube, Epic Games, TikTok and Microsoft, have faced substantial fines in recent years, with YouTube alone settling for $30 million last month and $170 million in 2019.