Disney Settles With FTC for $10M Over COPPA Allegations
Disney violated children’s privacy law by allowing illegal collection of minors' personal data on YouTube, the FTC alleged in a $10 million settlement announced with Disney on Tuesday.
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Disney violated the Children’s Online Privacy Protection Act rule by failing to properly label videos as “Made for Kids” on several of the company’s channels, the agency said.
COPPA requires companies to obtain parental consent before collecting data from children 13 and younger on child-directed content. YouTube, in response to a 2019 settlement with the agency, began requiring creators to label videos. According to the complaint, YouTube informed Disney of the failure to label as early as June 2020, when the video platform changed designations for more than 300 videos on channels including Pixar, Disney, Disney Movies, Walt Disney Animation Studios and Oh My Disney, according to the complaint.
The FTC said Disney will pay a $10 million civil penalty and must comply with COPPA by “notifying parents before collecting personal information from children under 13 and obtaining verifiable parental consent for collection and use of that data." It also must establish a program for verifying whether its YouTube videos should be labeled for children.
The commission voted 3-0 to refer the complaint and proposed order to the Department of Justice. DOJ filed the complaint with the U.S. District Court for the Central District of California, Western Division.
“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 Chairman Andrew 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 -- age assurance technology.”
Disney, in a statement Tuesday, said: “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. 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.”
Google didn’t comment.
The FTC in its announcement said Disney’s mislabeling exposed children to “age-inappropriate” features like autoplay and videos for general audiences and adults. The agency noted Disney “receives a portion of the revenues that YouTube generates from advertising placed with Disney videos and revenues from advertising that Disney sells directly.”