Disney Settles COPPA Violation Claims with $10 Million Civil Penalty

Disney has reached a settlement agreement to pay a $10 million civil penalty following allegations of violating the Children’s Online Privacy Protection Act (COPPA). The company was accused of improper labeling of videos and allowing data collection for targeted advertising.

Assistant Attorney General Brett A. Shumate emphasized the government’s commitment to protecting children’s privacy rights. The Department of Justice took decisive action to address the unlawful infringement on parents’ ability to control their children’s information.

The U.S. Justice Department filed a complaint against Disney, prompted by a referral from the Federal Trade Commission (FTC). The allegations focused on Disney’s failure to designate kid-directed videos on YouTube as “Made for Kids” (MFK), a crucial label that safeguards children’s privacy by restricting data collection and personalized ads.

Since 2019, content creators have been required to label their videos and channels as MFK, a measure enforced after Google and YouTube settled a $170 million claim for COPPA Rule violations. This rule mandates obtaining parental consent before collecting personal information from children under 13.

Despite alerts from YouTube in 2020 regarding mislabeling, Disney continued to improperly designate children-focused content. This negligence allowed data collection from underage viewers, leading to targeted advertising aimed at children.

The FTC highlighted that revenue generated from advertising on Disney videos, as well as ads sold directly by Disney, contributed to the violation. As part of the settlement, Disney will notify parents before collecting children’s data and ensure proper labeling on YouTube to prevent unlawful data collection and targeted ads.

In a separate investigation in September 2024, the FTC exposed video streaming and social media companies profiting from extensive data surveillance of minors.

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