Walt Disney (NYSE:DIS) has agreed to pay $10M to settle allegations from the Federal Trade Commission that the company collected personal data from children watching kid-directed videos it had uploaded to Google’s (GOOG)(GOOGL) YouTube without notifying parents or obtaining consent.
The FTC determined Disney had violated the Children’s Online Privacy Protection Rule, or COPPA. The complaint, which was filed by the U.S. Department of Justice, alleged Disney violated the COPPA Rule by failing to properly label videos it uploaded to YouTube as “Made for Kids.”
The mislabeling allowed Disney “to collect personal data from children under 13 viewing child-directed videos and use that data for targeted advertising to children,” according to the FTC. “The mislabeling also exposed children to age-inappropriate YouTube features like autoplay to videos not ‘Made for Kids.'”
“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,” said FTC Chairman Andrew Ferguson. “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.”
After 2019, YouTube began requiring creators to indicate if uploads were “Made for Kids” or “Not Made for Kids” to comply with COPPA. YouTube does not collect personal information or serve personalized ads to viewers watching “Made for Kids” videos.
“According to the complaint, even after being told by YouTube in mid-2020 that YouTube had changed designations on more than 300 Disney videos from NMFK to MFK, Disney did not change its policy of designating videos at the channel level and continued to fail to properly designate individual videos as MFK,” the FTC said.
Several large tech companies have faced fines for COPPA violations over the past few years, including Microsoft (MSFT), Epic Games, YouTube and TikTok (BDNCE).