Disney Will Pay $10 Million for Collecting Children’s Data from YouTube

Disney will pay a $10 million civil penalty to the Federal Trade Commission after the company allegedly failed to comply with a law designed to protect children’s data. 

The FTC alleged in a statement on Tuesday, Sept. 2, that the entertainment company failed to designate YouTube videos as “Made for Kids.” That disclaimer is made to comply with the Children’s Online Privacy Protection Act, the federal law that protects the data of children under 13 years of age and prevents it from being collected and used for targeted advertising.

Due to Disney’s alleged violation, it has agreed to pay $10 million to settle the FTC’s claims. Additionally, Disney must also maintain an audience designation program to ensure that all its YouTube videos are correctly classified, according to the FTC’s statement.

Per the FTC’s complaint, in June 2020, YouTube notified Disney about around 300 videos that were not marked “Made for Kids” (MFK), including videos featuring characters from The Incredibles, Coco, Toy Story, Tangled and Frozen.

Although YouTube redesigned those videos, the company allegedly did not overhaul its policy. For the next couple of years, Disney continued designating videos “based on the channel-level default rather than designating individual videos as MFK when appropriate,” the official complaint alleges.

Additionally, the complaint claimed that the targeted advertising campaigns were allegedly enabled on videos marked both MFK and “Not Made for Kids” (NMFK), and uploaded to MFK channels, including: Disney Channel, the Disney Descendants channel, the Disney Family channel, the Disney Games channel, the Disney Junior channel, the Disney Music channel, the Disney XD channel, the Mickey Mouse channel, the Pixar Cars channel, the Radio Disney channel and the Nat Geo Kids channel.

Disney obtains a share of YouTube’s ad revenue on its videos, and also sells advertising directly.

“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 — age assurance technology,” FTC chairman Andrew Ferguson said in the FTC statement.

Disney issued a statement, saying, “Supporting the well-being and safety of kids and families is at the heart of what we do.”

“This settlement does not involve Disney owned and operated digital platforms but rather is limited to the distribution of some of our content on YouTube’s platform,” the statement continued. “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.”

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Disney is not the first company to pay a fine in relation to allegedly violating children’s online safety laws. In 2019, YouTube paid $170 million for collecting children’s data. Due to the previous settlement, the social media platform then required content providers to disclose whether their videos were “Made for Kids.”