The Walt Disney Co. has agreed to pay $10 million to settle a Federal Trade Commission inquiry into alleged violations of child privacy laws.
The settlement, disclosed Tuesday, covers videos that Disney uploaded to YouTube that were not properly marked as children’s content. That lapse allowed the videos to become targets for online advertising, drawing the attention of federal regulators.
The Burbank entertainment giant “allowed personal data to be collected from children who viewed kid-directed videos on YouTube without notifying parents or obtaining their consent as required by the Children’s Online Privacy Protection Rule,” the agency said on its website.
Since 2020, Disney has uploaded videos to more than 1,250 YouTube channels, according to the complaint filed by the U.S. Justice Department. Investigators alleged Disney failed to appropriately mark child-specific videos as “Made for Kids,” allowing targeted advertising to reach children.
Instead, the videos carried a default classification as “not made for kids,” allowing advertisers to glean information about users — some aged 13 and younger, the complaint said.
The videos ran on numerous YouTube channels, including those branded with Pixar, Disney Animation Studios and Disney on Ice.
Disney generates advertising revenue from the YouTube videos. Targeted ad campaigns were inappropriately directed toward children, the government said in its complaint.
The company said the violations did not occur on Disney-owned platforms.
“Supporting the well-being and safety of kids and families is at the heart of what we do,” a Disney spokesperson said in a statement. “… Disney has a long tradition of embracing the highest standards of compliance with children’s privacy laws, and we remain committed to investing in the tools needed to continue being a leader in this space.”
The 1998 Children’s Online Privacy Protection Act applies to commercial website or online platform operators that collect, use or disclose personal details about users.
The FTC complaint alleged YouTube alerted Disney and other content creators in late 2019 that they needed to properly mark the videos to comply with the federal law. Disney was told that if it failed to do so, it “may face compliance issues with the FTC or other authorities.”
During the probe, investigators discovered “at least 12 different ad campaigns with over 350,000 ad impressions” that ran on Disney-branded channels. Those channels should have been shielded from the advertising, according to the complaint.
Two Disney subsidiaries were named as defendants: Florida-based Disney Worldwide Services and Burbank-based Disney Entertainment Operations.
“This case underscores the FTC’s commitment to enforcing COPPA, which was enacted by Congress to ensure that parents, not companies like Disney, make decisions about the collection and use of their children’s personal information online,” FTC Chair Andrew N. Ferguson said in a statement.
“Our order penalizes Disney’s abuse of parents’ trust, and, through a mandated video-review program, makes room for the future of protecting kids online.”
Axios first reported the settlement.
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