The Federal Trade Commission (FTC) has taken action against The Walt Disney Company for allegedly violating the Children’s Online Privacy Protection Rule (COPPA). The Department of Justice, acting on an FTC referral, filed a complaint asserting that Disney failed to correctly designate a significant number of its videos on YouTube as “Made for Kids.” This mislabeling allowed for the collection of personal data from children under 13 without verifiable parental consent, a practice that the COPPA rule is specifically designed to prevent. As a result of the data collection, these children were then exposed to targeted advertising, a practice that is disabled on content properly labeled for children.
The complaint details the extent of Disney’s alleged misdeeds, revealing that the company has uploaded tens of thousands of videos to over 1,250 YouTube channels since 2020. Even a small fraction of this content, posted to just three dozen channels, garnered 1.2 billion views in the U.S. within a three-month span in 2020. The FTC alleges that a large number of these videos were not properly labeled for children, and that Disney financially benefited from this practice. The company profited through its share of YouTube’s advertising revenue and by placing its own ads on the videos, which the complaint claims was enabled by the improper labeling.
YouTube had previously informed Disney of the need to correctly label its content to comply with COPPA, with a warning issued as early as November 2019. The streaming platform’s advertising practices are directly dependent on whether content is designated as “Made for Kids.” Despite this notification and a follow-up warning in June 2020 that Disney was failing to fix the issue, the problem persisted. Examples of improperly labeled videos included clips from popular children’s movies and cartoons like Frozen, Mickey Mouse, and Toy Story, all of which are clearly directed at a young audience.
In a prepared statement, FTC Chairman Andrew Ferguson emphasized the agency’s commitment to enforcing COPPA, stating that the law “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.” The proposed settlement includes not only the $10 million fine but also mandates significant changes to Disney’s operations. The company will be required to notify and obtain parental consent before collecting data from children under 13, in line with COPPA regulations.
Furthermore, the settlement imposes a requirement for Disney to implement a new program to ensure that all future videos uploaded to YouTube are correctly designated for children. This provision, however, may be superseded if YouTube itself successfully implements its own age assurance technologies. The FTC’s action and the resulting settlement underscore the critical importance of protecting children’s privacy in the digital age and serve as a warning to other companies about the serious consequences of non-compliance with online privacy laws.
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