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The Walt Disney Company will pay $10 million (£7.4 million) to settle claims that it violated children’s privacy laws by failing to label some YouTube videos as directed at children, enabling targeted advertising.
Disney had agreed to the settlement with the US Federal Trade Commission (FTC) in September to resolve an inquiry into its collection of children’s personal data.
The FTC argued that Disney’s alleged mislabelling meant children were exposed to targeted ads and had their personal data collected without parental consent.
The entertainment giant also agreed to implement a programme to ensure compliance with children’s data protection laws, the US Department of Justice announced on Tuesday.
Brett Shumate, assistant attorney general in the Justice Department’s civil division, stated, “The Justice Department is firmly committed to ensuring parents have a say in how their children’s information is collected and used.”
A Disney spokesperson confirmed the company would abide by the terms initially announced in September, emphasising that the settlement applies only to certain content on YouTube and not to Disney-owned digital platforms.
The agreement involves Disney Worldwide Services Inc and Disney Entertainment Operations LLC.
Following a 2019 FTC settlement with YouTube’s parent company, Google, creators are required to label videos made for children to prevent targeted advertising and personal data collection under the 1998 Children’s Online Privacy Protection Act (COPPA).
The law requires creators of content aimed at children under 13 to obtain parental consent before collecting personal information.
Regulators alleged that Disney failed to mark certain videos—many uploaded during the Covid-19 pandemic—as made for children, breaching the law.
Since 2020, Disney uploaded videos to over 1,250 YouTube channels through its subsidiaries, with many becoming extremely popular early in the pandemic, according to the Justice Department.
Legal filings indicate that Disney was aware of these labelling failures as early as June 2020. At that time, YouTube reportedly informed Disney that it had changed the labels on more than 300 videos, including titles from The Incredibles, Toy Story, and Frozen.
Government lawyers contended that Disney’s misclassification caused YouTube to collect personal data and run targeted advertisements on children’s videos on Disney’s behalf.
