Disney to Pay Millions in Fines for Children's Data Violations

Disney Pays Millions for Violations of Children's Data Protection Act

WASHINGTON — One of the world's largest entertainment companies, Disney, has agreed to pay a civil penalty of $10 million to settle a dispute with the U.S. Federal Trade Commission (FTC). The sanction was imposed for systematic violations related to the collection of data from underage consumers through video clips distributed on the global platform YouTube.

The scandal affects a critical area — the protection of personal privacy for the most vulnerable part of the audience. According to the accusations made by the FTC, Disney failed to fulfill the basic requirements of the federal Children’s Online Privacy Protection Act (COPPA). Specifically, the company did not sufficiently and clearly label some of its content as "Made for Kids" as required by law.

The statement from the regulatory body emphasizes that the settlement is not just a punishment, but also a step toward a fundamental change in the giant's practices. Disney has committed to changing its policies and complying with the requirements of COPPA, which imposes the obligation for explicit parental consent when collecting data from users under 13 years old.

FTC Chairman Andrew Ferguson did not spare his criticism. "With our order, we are punishing Disney's abuse of parental trust and, through a mandatory video content review program, we are creating a foundation for the future protection of children online — by introducing age-verification technologies", he stated. His comment clearly shows that the regulator views the case not as an isolated oversight, but as a serious breach of trust for millions of families who trust the Disney brand.

For its part, the company was quick to clarify that the settlement does not affect its own digital platforms. According to Disney's position, the problem is limited solely to the way some of their content was distributed on YouTube. This distinction seems to be an attempt to limit the public and financial effect of the agreement, by emphasizing that the violations are not part of the company's core business practices.

In an official statement, Disney tried to reassure the public, emphasizing its commitment to the protection of children. "Supporting the well-being and safety of children and families is at the core of our business", the statement says. "Disney has a long-standing tradition of adhering to the highest standards for children's data protection and will continue to invest in the necessary tools to be a leader in this area".

Despite these assurances, the case raises serious questions about the control of digital content. Problems with incorrectly labeling children's video clips on YouTube are not new. American regulators strengthened their control back in 2019, when the platform itself agreed to pay the impressive sum of $170 million for similar violations. At that time, YouTube introduced the obligation for every video to be explicitly categorized.

The FTC's complaint against Disney revealed specific details. In June 2020, YouTube notified Disney that about 300 video clips, including popular titles like "The Incredibles", "Coco", "Toy Story", "Tangled" and "Frozen", were not correctly labeled as being for children. Although YouTube subsequently re-categorized them, such oversights continued in the following years, indicating a systematic problem.

The investigation showed that despite having channels marked for a children's audience, Disney published children's video clips in channels labeled as "Not Made for Kids". This allowed YouTube to collect personal data from young viewers and show them targeted ads, which is a direct violation of COPPA.

According to the terms of the new agreement, Disney will be required to maintain a special program for classifying the audience of each of its videos on YouTube. To ease the burden of manual labeling, the possibility of using technologies for automatic determination of the viewers' age is also being introduced. This seems to be an attempt at a long-term solution to a problem that underscores how difficult it is for media giants to comply with legislation in the rapidly changing digital environment.