Disney to Pay $10 Million to Settle Children’s Privacy Violations on YouTube

The Walt Disney Company has agreed to pay $10 million (£7.4 million) to settle allegations that it violated US children’s Privacy laws by improperly handling child-directed content on YouTube. Regulators alleged that Disney failed to correctly label certain videos as being intended for children, which allegedly enabled targeted advertising and the collection of personal data without the knowledge or consent of parents.

The settlement follows an investigation by the US Federal trade Commission (FTC) into Disney’s data practices related to children’s content distributed on third-party platforms. On Tuesday, the US Department of Justice confirmed that a federal court order had formally approved the agreement, which was initially announced in September.

According to regulators, Disney did not designate several videos as child-directed despite the content being clearly aimed at young audiences. As a result, children were allegedly exposed to targeted advertisements, and their personal information was collected in ways that violated federal privacy protections designed specifically for minors.

At the center of the case is the Children’s Online Privacy Protection Act (COPPA), a landmark 1998 law that restricts the collection and use of personal information from children under the age of 13. COPPA requires content creators and online services to notify parents and obtain verifiable parental consent before collecting personal data from children.

The FTC argued that Disney’s alleged misclassification of its YouTube videos undermined safeguards meant to prevent targeted advertising on children’s content, particularly on platforms with massive youth audiences such as YouTube.

Disney Agrees to Penalty and Enhanced Compliance Measures

As part of the settlement, Disney has also agreed to implement a comprehensive compliance program aimed at ensuring future adherence to children’s Data Protection laws. The US Department of Justice said the program is designed to prevent similar violations and strengthen internal oversight of how children’s data is handled.

Announcing the court order, Brett Shumate, an associate attorney general in the Justice Department’s civil division, emphasized the importance of parental control over children’s information. “The Justice Department is firmly committed to ensuring that parents have a say in how their children’s information is collected and used,” he said.

Disney has previously clarified that the settlement does not apply to Disney-owned and operated digital platforms. Instead, the agreement is limited to the distribution of certain Disney content on YouTube, which is owned by Google.

YouTube Policies and Broader Regulatory Context

The action builds on regulatory changes introduced after a major 2019 settlement between the FTC and Google, YouTube’s parent company. That agreement required YouTube to overhaul its approach to children’s content, including mandating that creators clearly label videos intended for young audiences.

These labels are critical under COPPA, as they are intended to prevent the use of children’s content for prohibited activities such as targeted advertising and extensive personal data collection.

According to a Justice Department complaint filed in California, Disney began uploading videos to more than 1,250 YouTube channels through various subsidiaries starting in 2020. Many of these videos were described as “extremely popular,” with viewership surging during the early months of the Covid-19 pandemic, when families increasingly turned to online entertainment.

Regulators said Disney was aware of potential labeling issues as early as June 2020. The lawsuit alleges that YouTube informed Disney that it had independently classified more than 300 videos as being directed at children after determining they were aimed at minors.

Those videos reportedly featured content linked to some of Disney’s most iconic franchises, including Frozen, Toy Story, and The Incredibles, all of which have large followings among young viewers.

The settlement serves as a significant reminder to media companies and content creators of the strict requirements surrounding children’s data privacy. It also reinforces regulators’ intent to hold even the world’s largest entertainment companies accountable for compliance with laws designed to protect children online.