Disney to Pay $10 Million in U.S. Settlement Over Children’s Data Collection

Walt Disney has agreed to pay $10 million to settle allegations from the U.S. Federal Trade Commission (FTC), which accused the company of unlawfully allowing personal data to be collected from children under 13 on YouTube. Regulators stated that Disney failed to designate certain kid-focused videos as “made for children,” which consequently enabled data tracking and targeted advertising without parental consent. 

The FTC’s complaint claimed that Disney’s conduct breached the U.S. Children’s Online Privacy Protection Rule (COPPA). This rule mandates that online platforms directed at children under 13 must clearly disclose data practices to parents and obtain verifiable parental consent before collecting information from minors. By mislabeling its videos, Disney was accused of sidestepping these obligations and exposing young viewers to potentially non-compliant data practices. 

While this settlement does not involve Disney’s own digital platforms, the company acknowledged that some of its content distributed on YouTube fell short of compliance standards. Under the agreement, Disney must introduce an audience designation program to make sure its videos are accurately labeled as child-directed when applicable.

Industry and Business Implications

This settlement underscores the escalating regulatory scrutiny around data privacy, especially within the children’s entertainment sector. With digital advertising revenues facing pressure, entertainment giants and tech platforms face heightened compliance risks when distributing content across third-party platforms. For Disney, while the fine is modest compared with its overall earnings, the reputational stakes are significant as it continues to position itself as a family-first brand. 

A Disney spokesperson highlighted the company’s continued commitment to protecting children’s privacy, pointing to its “long history of upholding the highest compliance standards” and vowing further investment in tools to protect young audiences. 

Summary:

Disney will pay $10 million to resolve FTC claims that it broke U.S. children’s privacy laws by mislabeling YouTube videos, which allowed unlawful data collection.This case highlights intensifying regulatory oversight in digital media, with broader implications for content creators, advertisers, and tech platforms operating in child-focused markets.

Frequently Asked Questions (FAQs)

1. Why is Disney paying $10 million to the FTC?

Disney agreed to the settlement after the U.S. Federal Trade Commission alleged that the company failed to properly label some of its YouTube videos as child-directed, which allowed unlawful data collection from children under 13 without parental consent.

2. What law did Disney allegedly violate?

The FTC claimed Disney’s actions violated the Children’s Online Privacy Protection Rule (COPPA), a U.S. regulation that requires online services targeting children under 13 to notify parents and obtain verifiable consent before collecting personal information.

3. Does this settlement involve Disney’s own platforms like Disney+?

No. The settlement specifically relates to Disney content distributed on YouTube. Disney’s owned and operated platforms, such as Disney+, are not part of this case.

4. What changes will Disney have to make under the agreement?

Disney is required to implement an audience designation program to ensure its videos are properly labeled as child-directed when appropriate, helping prevent future violations.

5. How significant is the $10 million fine for Disney?

Financially, the penalty is relatively small compared to Disney’s overall earnings. However, the reputational impact is more significant, as it involves children’s data privacy—a sensitive issue for parents and regulators alike.

6. Why is this case important for the entertainment and tech industries?

The settlement highlights the growing regulatory focus on children’s data privacy. It signals to content creators, advertisers, and tech platforms that compliance failures—even on third-party platforms—can carry both financial and reputational risks.

7. What does this mean for parents?

The case serves as a reminder for parents to stay vigilant about how their children consume digital content and how personal data may be collected or used by online platforms.