Disney to Pay $10 Million in FTC Settlement Over Children’s Data Collection on YouTube

Key Takeaways

• $10 Million Penalty: Disney will pay $10 million to settle FTC allegations it violated COPPA by mislabeling children’s YouTube videos.
• Mislabeling at Scale: Disney marked channels as “Not Made for Kids,” exposing under-13 viewers to targeted ads and features like autoplay.
• Mandated Oversight: The order requires Disney to implement a program reviewing whether its videos should be designated as “Made for Kids.”
• Age Assurance Push: Regulators are signaling a move toward technology-driven age verification as a safeguard for children online.
• Compliance Signal: The case highlights rising enforcement pressure on content creators and multinationals to actively manage COPPA compliance.

Deep Dive

Disney will pay $10 million to settle allegations from the Federal Trade Commission (FTC) that it violated children’s online privacy protections by mislabeling YouTube videos, allowing the unlawful collection of personal data from under-13 viewers. The case not only imposes a financial penalty on one of the biggest names in entertainment but also signals a shift in how regulators expect companies to safeguard kids’ online experiences.

The complaint, filed by the Department of Justice after referral from the FTC, accused Disney of marking entire YouTube channels as “Not Made for Kids” despite posting videos clearly intended for children. That blanket labeling, according to regulators, exposed viewers of films like Frozen, The Incredibles, and Toy Story to targeted advertising and YouTube features not permitted on children’s content. Even after YouTube flagged hundreds of Disney videos and corrected their designations in 2020, Disney allegedly continued the practice.

FTC Chairman Andrew N. Ferguson described the case as a warning shot.

“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,” he said.

The order requires Disney not only to pay the penalty but also to implement a system for reviewing how its YouTube content is classified. Unless YouTube itself rolls out robust age-assurance technologies or stops leaving content labeling to creators, Disney must carry out these reviews to ensure compliance with the Children’s Online Privacy Protection Act (COPPA).

COPPA, first enacted in 1998, places responsibility on companies to obtain parental consent before collecting personal information from children under 13. This case builds on earlier enforcement against YouTube in 2019, which led to new labeling rules that content creators are expected to follow. The FTC’s latest move suggests that regulators are losing patience with industry reliance on channel-level classifications and default settings that skirt responsibility.

The settlement highlights a growing regulatory emphasis on active oversight of digital content labeling and age assurance. It also demonstrates how regulators are pushing companies toward more granular, technology-driven solutions for online safety, beyond check-the-box compliance.

The Commission voted unanimously to approve the settlement, which still requires approval from a federal judge in California. If approved, the order will have the force of law.

The GRC Report is your premier destination for the latest in governance, risk, and compliance news. As your reliable source for comprehensive coverage, we ensure you stay informed and ready to navigate the dynamic landscape of GRC. Beyond being a news source, the GRC Report represents a thriving community of professionals who, like you, are dedicated to GRC excellence. Explore our insightful articles and breaking news, and actively participate in the conversation to enhance your GRC journey.