Disney’s Settlement with the FTC
Disney has reached a settlement with the Federal Trade Commission (FTC) involving a $10 million civil penalty due to the collection of children’s data from videos shared on YouTube. The FTC alleged that Disney did not label certain videos as “Made for Kids,” which is essential for compliance with federal regulations that safeguard children’s data from being used for targeted advertising.
In a statement, FTC Chairman Andrew Ferguson remarked, “Our order penalizes Disney’s abuse of parents’ trust, and, through a mandated video-review program, makes room for the future of protecting kids online — age assurance technology.”
Disney’s Response
Disney expressed its commitment to following child privacy laws, stating, “Supporting the well-being and safety of kids and families is at the heart of what we do. This settlement does not involve Disney owned and operated digital platforms but rather is limited to the distribution of some of our content on YouTube’s platform. 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 needed to continue being a leader in this space.”
YouTube’s Background
In 2019, YouTube settled a similar issue by paying $170 million for the improper collection of children’s data. Following the settlement, the platform mandated content creators to indicate whether their videos were “Made for Kids” or not. According to the FTC’s complaint, Disney was informed in June 2020 that approximately 300 videos from popular titles such as “The Incredibles,” “Coco,” “Toy Story,” “Tangled,” and “Frozen” were not designated appropriately.
The complaint further claimed that YouTube had to repeatedly adjust the designations of additional videos over the subsequent years. YouTube allows for either individual or channel-wide video designations. It was reported that Disney primarily chose channel-level designations, leading many child-friendly videos to be categorized under its “Not Made for Kids” designation by default.
Consequences and Future Practices
Among the videos affected are cartoons, sing-alongs, and story times that feature actors reading children’s literature. Disney benefits financially from YouTube through ad revenue sharing and direct advertising sales. The FTC’s complaint noted, “Disney’s failure to accurately designate child-directed videos as MFK results in YouTube collecting personal information and placing targeted advertisements on child-directed videos on Disney’s behalf.” Additionally, certain features such as comments and autoplay are disabled on videos labeled as “Made for Kids.”
As part of the settlement, Disney is required to establish an Audience Designation Program to correctly classify all videos shared on YouTube. The agreement also paves the way for YouTube to implement age assurance technology, which would help in identifying the age of viewers, thereby easing the burden of individually tagging videos.
