The Federal Trade Commission (FTC) has announced a $10 million settlement with Disney following allegations that the media giant violated the Children’s Online Privacy Protection Act (COPPA) by misclassifying videos on YouTube, leading to the unlawful collection of children’s personal data.
The complaint, filed by the Department of Justice (DOJ) on behalf of the FTC in the U.S. District Court for the Central District of California, accuses Disney Worldwide Services, Inc. and Disney Entertainment Operations LLC of failing to accurately label numerous child-directed videos as “Made for Kids” (MFK). As a result, children under 13 were exposed to personalized advertising and data collection without their parents’ knowledge or consent, directly violating COPPA’s parental notice and consent requirements.
According to the court documents, Disney maintained a policy of setting audience designations at the channel level on YouTube, either “Made for Kids” or “Not Made for Kids” (NMFK), and failed to manually review and correctly label individual videos even when the content clearly targeted children.
YouTube implemented the MFK designation system in 2019 following its own COPPA settlement with the FTC. The platform required content creators, including Disney, to self-classify their videos to prevent the collection of persistent identifiers, such as cookies and IP addresses, on child-directed content. However, the complaint reveals that Disney uploaded tens of thousands of videos across more than 1,250 channels and chose to use a default channel-level designation. This practice allowed numerous child-directed videos, including those featuring characters from Toy Story, Moana, Frozen, and Mickey Mouse, to remain mislabeled as NMFK.
Despite being notified in mid-2020 by YouTube that it had reclassified over 300 Disney videos from NMFK to MFK, Disney continued to adhere to its default policy without implementing corrective measures. Videos flagged by YouTube included those from franchises like The Incredibles, Coco, Tangled, and Encanto.
The proposed stipulated order imposes a $10 million civil penalty and mandates the creation of an internal Audience Designation Program. This program will require Disney to assess each video individually and designate it as MFK when appropriate, unless YouTube itself deploys a platform-wide age assurance system that can determine user age or removes the ability for content creators to self-label videos.
Disney will also be required to:
- Comply with COPPA by providing direct notice to parents and obtaining verifiable parental consent before collecting personal information from users under 13.
- Train relevant staff annually on compliance obligations and audience designation procedures.
- Maintain comprehensive records of compliance efforts for 10 years.
The FTC highlighted this case as a signal to other content providers that outsourcing platform responsibilities does not absolve them of legal obligations. Chairman Andrew N. Ferguson stated the order reflects the agency’s commitment to modernizing enforcement by integrating age assurance technologies into compliance frameworks.
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