The Walt Disney Company has agreed to pay a $10 million settlement to the U.S. Federal Trade Commission (FTC) after being accused of violating the Children’s Online Privacy Protection Act (COPPA). The FTC charged that Disney failed to correctly label a number of its YouTube videos as “Made for Kids”, thereby allowing the platform to collect personal data from children under 13 without parental consent
What Disney Did—and Why It Went Wrong
According to the FTC’s complaint, Disney used default channel-level settings rather than individually labeling each video. As a result, even children’s content—such as videos from The Incredibles, Toy Story, and Frozen—was marked as “Not Made for Kids.” YouTube’s misclassification enabled features like autoplay and targeted advertising, which are restricted under COPPA.
YouTube had flagged this issue back in June 2020 by reclassifying over 300 videos. However, Disney reportedly did not change its default labeling system thereafter, continuing the practice despite the warning.
Requirements of the Settlement
As part of the settlement, Disney will:
- Pay the $10 million penalty
- Implement a 10-year compliance program, ensuring proper labeling of future YouTube uploads
- Obtain parental consent for data collection from users under 13
- Maintain a video-review program for age-appropriate classification—or rely on future age-assurance infrastructure provided by YouTube
FTC Chairman Andrew Ferguson stressed this settlement addresses a crucial issue of trust:
“Our order penalises Disney’s abuse of parents’ trust, and, through a mandated video-review programme, makes room for the future of protecting kids online—age assurance technology.”
Why This Matters Now
This case marks the first FTC settlement involving a YouTube content provider since YouTube’s own $170 million COPPA settlement in 2019. It signals heightened scrutiny for third-party creators, not just platforms.
Disney’s Official Response
Disney emphasized that this issue only affects content distributed via YouTube—not content on its own platforms. The company reaffirmed its commitment to child privacy and stated it intends to invest in tools for stronger compliance.
Broader Implications
- Compliance Costs Are Rising: The $10 million penalty illustrates the financial consequence of COPPA violations, particularly for global brands distributing content on third-party platforms.
- Trust and Brand Integrity: Disney’s long-standing reputation for family-friendly media may be impacted by this lapse. The settlement underscores the importance of safeguarding brand trust.
- Regulatory Momentum: As digital media grows, regulatory bodies may apply stricter measures—including mandatory age-verification tools—to protect children’s data.
