Disney will pay $10 million to implement compliance measures after regulators said children’s YouTube videos were wrongly labelled, enabling targeted advertising.
The Walt Disney Company has agreed to pay $10 million to settle allegations that it breached children’s privacy laws by failing to correctly identify certain YouTube videos as made for children, a lapse that allowed targeted advertising and the collection of personal data without parental consent.
The settlement, first announced in September, resolves an investigation by the US Federal Trade Commission into Disney’s handling of children’s personal information. Regulators argued that because some videos were not properly labelled, children were served targeted advertisements and had their data collected without notice to or permission from parents.
Regulatory action and legal findings
The entertainment group has also committed to establishing a programme to comply with children’s data protection laws, according to the US Department of Justice. Announcing the federal court order on Tuesday, Brett Shumate, an assistant attorney general in the Justice Department’s civil division, said, “The Justice Department is firmly devoted to ensuring parents have a say in how their children’s information is collected and used.”
A Disney spokesperson confirmed that the company has agreed to the terms outlined in September. Disney has previously stated that the settlement applies only to the distribution of some of its content on YouTube and does not involve Disney-owned and operated digital platforms. The agreement covers Disney Worldwide Services Inc and Disney Entertainment Operations LLC.
Background to the YouTube rules
The case follows a 2019 settlement between the FTC and Google, YouTube’s parent company, after which the platform required creators to label videos directed at children. The measure was designed to prevent targeted advertising and the collection of personal data on children’s content, practices prohibited under the 1998 Children’s Online Privacy Protection Act (COPPA).
COPPA requires creators producing content for children under 13 to notify parents and obtain consent before collecting personal information. Regulators alleged that Disney failed to identify certain videos—many uploaded during the pandemic—as made for children. Since 2020, Disney has uploaded videos to more than 1,250 YouTube channels through several subsidiaries, with many described in the complaint as “extremely popular” and viewership surging in the early months of the Covid-19 pandemic.
According to the legal filing, Disney was aware of failures to correctly mark children’s videos as early as June 2020. YouTube is said to have informed Disney at the time that it had changed labels on more than three hundred videos, including content from The Incredibles, Toy Story and Frozen. Government lawyers alleged that Disney’s misclassification “results in YouTube collecting personal information and placing targeted advertisements on child-directed videos on Disney’s behalf.”
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