The Walt Disney Company will pay a total of $10 million to settle claims that the company violated the protection of children’s online privacy, the United States Department of Justice confirmed Tuesday.
The agreement is a result of claims that the company failed to correctly identify videos on YouTube that belong to children and that the company collected information from children under the age of 13 without the consent of parents.
The news from the Justice Department is made public a few months after the Federal Trade Commission announced the settlement in September of last year. This matter relates to Disney’s management of content uploaded on YouTube from 2020 to 2022, with popular titles such as Frozen, Inside Out, Finding Dory, and Encanto.
What Disney Did Wrong?
The FTC complaint lodged by the DOJ alleges that Disney fails to adequately categorize its videos on the respective YouTube platform as “Made for Kids” under the Children’s Online Privacy Protection Act and ignores the fact that failing to do so allows the automated system on the platform to harvest the data of minors on the platform without the knowledge and/or consent of the parents.
“The problem arose after the change to YouTube’s policies in 2019. After a 2019 settlement with the FTC, YouTube has been requiring video producers to classify their content as ‘made for kids’ or ‘not made for kids.’ Video producers can use these classifications for specific videos, channels, or the entire account.”
According to the FTC, Disney received a notification in the middle of 2020 that the designation on over 300 of their videos on the online platform, YouTube, had been altered to “made for kids.” The regulatory body noted that Disney was notified of this, yet they went on to use the broad designation on the channel anyway without ensuring the individual videos had the correct designation.
The complaint pointed out some puzzling inconsistencies: the main Pixar channel was designated as “not made for kids,” while the separate Pixar Cars channel was designated as “made for kids.” This inconsistency, according to the FTC, proved that Disney failed to properly identify and label child-directed content when it was posted on channels designated for general audiences.
What the Settlement Requires
Apart from the $10 million fine, the U.S. District Court for the Central District of California ordered Disney to implement a broad compliance program to ensure their future adherence to COPPA guidelines on the YouTube platform. This means they have to put measures in place to correctly categorize children content on the platform.
The Justice Department states, “The Justice Department is completely committed to making sure that parents are accorded a voice in the collection and use of information about their children,” says Assistant Attorney General Brett A. Shumate of the Civil Division. The department plans on acting quickly in order to eliminate any illegal activity concerning the violation of a parent’s right to protect privacy.
Response from Disney
When the settlement was first made public in September last year, a spokesperson for the company stated their concern and commitment to the safety of children. “At the heart of everything we do is the support and safety of kids and families,” a spokesperson declared. This particular settlement, they said, “does not relate to the distribution of our owned and operated apps and services but is restricted to the distribution on YouTube’s platform.”
“The statement continued: “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 that are necessary to continue to be a leader in that area,”
When contacted by the Orlando Sentinel on Tuesday after the DOJ announcement, Disney had nothing further to say on the matter.
Part of a Larger Pattern
Disney is not the only company that has had its practices questioned by governments with regard to children’s privacy on-line. Microsoft Corporation paid $20 million in 2023 to settle charges that it had violated the privacy rights of children during the registration process to use its Xbox gaming system service. The FTC has recommended taking legal action against TikTok in 2024, claiming violations of COPPA.
These enforcement actions come as there has been an escalation of concern related to the privacy of children in the digital era. The COPPA, which originally came into force in the year 2000, has found itself under more relevance due to the widespread presence of social media platforms amongst children and teenagers.
A legislative amendment of the same was approved by the U.S. Senate in the year 2024 but has not been approved by the House. House Republicans recently reintroduced it, and there have been hearings related to the same taking place.
The Disney agreement is a reminder of the fact that even large entertainment corporations with a child audience need to be aware of the intricate regulations underlying protecting children’s online privacy. Future digital platforms will require adequate infrastructure for carrying out regulations aimed at providing control for parents concerning children’s personal data.
