Disney to Pay $10M to Settle Alleged Violations of US Child Privacy Laws

The Walt Disney Company has agreed to pay $10 million to resolve allegations that it breached US children’s privacy laws by failing to label certain YouTube videos as made for children, allowing targeted advertising to be served.

The settlement follows an investigation by the US Federal Trade Commission (FTC) into Disney’s collection of children’s personal data. Regulators argued that Disney’s alleged failure to properly classify child-directed content resulted in the collection of personal information and the delivery of targeted adverts without parental notice or consent.

In addition to the financial penalty, Disney has agreed to implement a compliance programme to ensure adherence to children’s data protection laws, the US Department of Justice said on Tuesday.

“The Justice Department is firmly committed to ensuring that parents have a say in how their children’s information is collected and used,” said Brett Shumate, an assistant attorney general in the department’s civil division.

A Disney spokesperson confirmed that the company has agreed to the terms of the settlement, which were initially announced in September. Disney has previously said the agreement is limited to the distribution of certain content on YouTube and does not involve its own digital platforms.

The settlement involves Disney Worldwide Services Inc and Disney Entertainment Operations LLC.

Following a 2019 settlement between the FTC and Google, YouTube began requiring content creators to label videos directed at children to prevent targeted advertising and the collection of personal data. Such practices are prohibited under the Children’s Online Privacy Protection Act (COPPA), which requires parental notification and consent for data collection involving children under 13.

Regulators alleged that Disney failed to label certain videos -- many uploaded during the Covid-19 pandemic -- as child-directed content, despite being aware of the issue as early as June 2020. According to court filings, YouTube later reclassified more than 300 Disney videos, including content from Toy Story, Frozen and The Incredibles.

Since 2020, Disney has uploaded content across more than 1,250 YouTube channels through multiple subsidiaries. Many of the videos attracted significant viewership, particularly during the early months of the pandemic, according to the Justice Department’s complaint filed in California.

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