Disney has reached an agreement to pay a $10 million civil penalty to resolve allegations of violating the Children’s Online Privacy Protection Act by improperly labeling videos and permitting data collection for targeted advertising.

“The Justice Department is dedicated to ensuring that parents maintain control over the collection and usage of their children’s information,” stated Assistant Attorney General Brett A. Shumate in a recent announcement regarding the federal court order. “The Department will act promptly to eliminate any unlawful infringements on parents’ rights to safeguard their children’s privacy.”

A complaint filed by the U.S. Justice Department, stemming from a referral by the Federal Trade Commission (FTC), claims that Disney failed to accurately label kid-targeted videos on YouTube as “Made for Kids” (MFK). This crucial label instructs YouTube to prevent personal data collection and refrain from showing personalized ads on properly designated content, ensuring the protection of children’s privacy.

Since 2019, content creators have been obligated to mark their uploaded videos and YouTube channels as MFK. This requirement came after Google and YouTube agreed to pay $170 million to settle claims of violating the Children’s Online Privacy Protection (COPPA) Rule, which mandates online services, websites, and apps to obtain parental consent before collecting personal information from children under 13.

The Justice Department noted that Disney also neglected to appropriately classify child-centered content, even after YouTube informed the company in 2020 that over 300 Disney videos had their labels switched from NMFK to MFK.

“The complaint alleges that the mislabeling enabled Disney, via YouTube, to gather personal data from children under 13 watching videos intended for them and utilize that data for targeted advertising,” the FTC remarked in September when announcing the proposed order for the $10 million civil penalty.

“Disney earns a part of the advertising revenue that YouTube generates from ads shown with Disney videos, as well as revenues from ads that Disney sells directly.”

Along with the civil penalty, the settlement will require Disney to notify parents before collecting personal information from children and verify that videos uploaded to YouTube are correctly labeled as “Made for Kids” to prevent unlawful data collection and targeted advertising related to its children’s content.

In September 2024, the FTC also exposed that video streaming and social media platforms are generating billions annually through data monetization gathered through extensive surveillance of minors.

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