Disney has agreed to pay a $10 million fine to settle charges that it violated the Children's Online Privacy Protection Act (COPPA) by miscategorizing certain videos and allowing data collection for targeted advertising.
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“The Department of Justice is committed to ensuring that parents have a say in how their children’s information is collected and used,” Assistant Attorney General Brett A. Shumate in announcing the federal court order. “The Department will act quickly to eliminate any unlawful infringement on parents’ rights to protect their children’s privacy.”
According to the complaint filed by the US Department of Justice, following a referral from the Federal Trade Commission (FTC), Disney allegedly failed to label videos aimed at children on YouTube as “Made for Kids” (MFK), a label that tells YouTube to block the collection of personal data and stop displaying personalized ads on properly labeled content in order to protect children’s privacy.
Content creators have been required to mark their videos and channels as MFK since 2019, when Google and YouTube paid $170 million to settle claims that they violated the COPPA regulation, which requires online services, websites, and apps to obtain parental consent before collecting personal information from children under 13.
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The Justice Department added that Disney failed to properly label content aimed at children, even after YouTube notified the entertainment giant in 2020 that it had changed the label on over 300 Disney videos from NMFK to MFK.
“The complaint alleges that the mislabeling allowed Disney, through YouTube, to collect personal data from children under 13 who watched children’s videos and use it for targeted advertising,” the FTC said in September when it announced its proposed decision to impose the $10 million fine.
"Disney receives a portion of the revenue generated from advertising on its YouTube videos, as well as from ads it sells directly," the FTC added.
In addition to the fine, the agreement requires Disney to notify parents before collecting children's personal data and to ensure that videos posted on YouTube are properly labeled as "Made for Kids" to prevent illegal data collection and targeted advertising on videos for children.
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In September 2024, the FTC also revealed that online video streaming and social media companies earn billions annually by leveraging data collected through extensive surveillance of children and teens.
