Disney pays $10M for mismarking kids’ videos on YouTube

Disney will pay a $10 million penalty to settle Federal Trade Commission allegations that it violated federal children’s online privacy laws by improperly labeling YouTube videos, marking the first known case where a content provider has been fined for COPPA violations on the platform since the agency’s landmark 2019 settlement with YouTube itself.

The settlement, announced Tuesday, stems from Disney’s failure to properly designate certain child-directed videos as “Made for Kids” when uploading them to YouTube between 2020 and 2022. This mislabeling allowed the videos to be targeted with advertising and enabled the collection of personal data from children under 13 without parental consent, violating the Children’s Online Privacy Protection Act.axios

The Violation Details

According to the FTC complaint filed in U.S. District Court for the Central District of California, Disney uploaded child-directed content including Mickey Mouse cartoons and clips from movies such as “Frozen,” “Toy Story,” “The Incredibles,” and “Coco” but failed to mark them with YouTube’s required “Made for Kids” designation. The complaint alleges that YouTube informed Disney in mid-2020 that it had changed the classification on more than 300 of Disney’s videos to “Made for Kids,” yet Disney did not alter its policy of applying blanket designations at the channel level.mediapost

The videos in question were primarily storytime content featuring celebrities reading to children that Disney uploaded during the early days of the COVID-19 pandemic. Disney had set its channel defaults to “Not Made for Kids” and did not individually review videos for proper classification.axios

Settlement Terms and Broader Implications

Under the settlement agreement, Disney must establish an “Audience Designation” program to formally review whether videos uploaded to YouTube should be classified as made for children. The company will also comply with COPPA requirements and invest in enhanced privacy compliance tools.axios

FTC Chairman Andrew Ferguson emphasized the significance of the case, stating that it “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”.hollywoodreporter

Industry Context

This settlement follows a pattern of increased COPPA enforcement by the FTC. YouTube agreed to pay $170 million in 2019 for similar violations, with the agency indicating at the time it would investigate content providers on the platform. Epic Games, the maker of Fortnite, paid $275 million for COPPA violations in 2022, while YouTube recently settled another children’s privacy case for $30 million last month.axios

The case signals potential legal exposure for other entertainment companies that may have similarly mislabeled content on YouTube and could face scrutiny over their compliance with children’s privacy laws across third-party platforms.hollywoodreporter

Disney emphasized in a statement that the 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,” adding that the company maintains “a long tradition of embracing the highest standards of compliance with children’s privacy laws”.cbsnews