Disney to Pay $10m to Settle Alleged Children’s Privacy Law Breaches
The Walt Disney Company has agreed to pay $10 million (£7.4 million) to resolve allegations that it violated US children’s privacy laws by failing to properly label certain YouTube videos as content made for children, regulators have said.
The settlement follows an investigation by the US Federal Trade Commission (FTC), which found that Disney allegedly did not identify some child-directed videos correctly, allowing targeted advertising to be served and children’s personal data to be collected without parental notice or consent.
According to the US Department of Justice, Disney also committed to establishing a comprehensive compliance programme to ensure adherence to children’s data protection requirements going forward. A federal court order confirming the settlement was announced on Tuesday.
“The Justice Department is firmly devoted to ensuring parents have a say in how their children’s information is collected and used,” said Brett Shumate, an assistant attorney general in the Justice Department’s civil division.
A Disney spokesperson confirmed that the company has accepted the terms of the settlement, which were initially announced in September. Disney previously stated that the agreement applies only to the distribution of some of its content on YouTube and does not affect Disney-owned or operated digital platforms.
The settlement involves Disney Worldwide Services Inc and Disney Entertainment Operations LLC.
The case builds on changes introduced by YouTube following a 2019 settlement between the FTC and Google, YouTube’s parent company. Under those rules, content creators are required to label videos that are directed at children to prevent targeted advertising and the collection of personal data, practices prohibited under the 1998 Children’s Online Privacy Protection Act (COPPA).
COPPA requires creators producing content for children under the age of 13 to notify parents and obtain consent before collecting personal information. Regulators alleged that Disney failed to comply with these requirements by misclassifying certain videos, many of which were uploaded during the Covid-19 pandemic.
The Justice Department said that since 2020, Disney has uploaded videos across more than 1,250 YouTube channels through multiple subsidiaries. Many of the videos attracted large audiences, with viewership surging during the early months of the pandemic.
Legal filings claim Disney was aware of issues with incorrectly labelling child-directed content as early as June 2020. At that time, YouTube reportedly informed Disney that it had reclassified more than 300 videos, including content related to popular franchises such as The Incredibles, Toy Story, and Frozen.
Government lawyers argued that Disney’s alleged failure to properly label the videos resulted in YouTube collecting children’s personal information and placing targeted advertisements on child-directed content on Disney’s behalf, in violation of federal law.
