Disney to Pay $10 Million in Settlement Over Children's Data Privacy on YouTube

Disney Faces Penalties for Children's Data Collection

The Walt Disney Company has agreed to pay a sum of $10 million to resolve allegations from the U.S. Federal Trade Commission (FTC) regarding the collection of personal information from children. This significant settlement addresses concerns that Disney-operated channels on YouTube gathered data from young viewers without first obtaining the required consent from their parents, a violation of federal privacy laws designed to protect minors online.

The core of the issue centers on how data, such as persistent identifiers used for targeted advertising, was collected from audiences under the age of 13. These identifiers, often in the form of cookies, allow advertisers to track user behavior across different websites and deliver personalized ads. The FTC's investigation found that certain YouTube channels, specifically created for and clearly appealing to children, were implicated in this unauthorized data collection practice.

Understanding the Children's Online Privacy Protection Act (COPPA)

At the heart of this settlement is the Children's Online Privacy Protection Act, commonly known as COPPA. Enacted in 1998, this federal law is designed to give parents control over what information is collected from their young children online. It mandates that operators of commercial websites and online services directed to children under 13, or who have actual knowledge that they are collecting personal information from children under 13, must obtain verifiable parental consent before collecting, using, or disclosing personal information from those children.

Personal information under COPPA is broadly defined and includes not only names and addresses but also persistent identifiers like IP addresses and cookie IDs. The law aims to create a safer online environment for children by limiting how their data can be used, especially for commercial purposes like targeted advertising, without explicit parental approval.

Broader Implications for Online Content Providers

This settlement serves as a crucial reminder for all companies that provide online content, particularly those whose offerings are aimed at children. It underscores the stringent requirements of COPPA and the FTC's commitment to enforcing these protections. While Disney operated the channels, the case also highlights the complex relationship between content creators and platform providers like YouTube (owned by Google), which have also faced scrutiny over children's data privacy in the past.

The $10 million payment is not just a penalty but also a signal to the industry that compliance with children's privacy regulations is non-negotiable. Companies must implement robust systems to identify child-directed content and ensure that all data collection practices align strictly with legal requirements.

What happens next

Following this settlement, Disney is expected to implement enhanced measures to ensure its online properties comply with COPPA moving forward. This will likely involve reviewing and updating its data collection practices on child-directed platforms and working closely with platforms like YouTube to ensure proper categorization and handling of content for young audiences. The FTC will continue to monitor online services to enforce privacy protections for children.