Disney fined $10m for collecting data on children on YouTube
Disney has agreed to pay $10 million (€8.6 million) to settle allegations by the US Federal Trade Commission (FTC) that the company illegally collected personal data from children watching Disney videos on YouTube. The FTC claimed that Disney violated the Children’s Online Privacy Protection Rule (COPPA) by failing to properly label some of its YouTube videos as ‘made for kids’. This incorrect labeling allowed Disney and YouTube to collect data on children under 13 and use it for targeted advertising, a practice prohibited by COPPA.
Disney benefits financially from YouTube’s advertising revenue, both directly and through a share in YouTube’s ad income. The FTC aims to enforce COPPA and protect parental control over children’s online data. The proposed rule is intended to penalize Disney for breaching trust and encourages the use of age-verification technologies on YouTube as a future solution for protecting children online.
COPPA requires websites and online services targeting children under 13 to inform parents about the personal information they collect and obtain verifiable parental consent before doing so. After a previous settlement with the FTC in 2019, YouTube implemented a system requiring content creators to designate their videos as ‘made for kids’ (MFK) or ‘not made for kids’ (NMFK). This designation ensures that certain features are disabled on MFK videos, such as personalised ads and comment sections.
While content creators can label each video individually or designate an entire channel as MFK or NMFK, Disney chose to label all its YouTube channels as NMFK by default. As a result, many videos aimed at children were incorrectly labeled as NMFK, allowing data collection and targeted advertising, even though they contained content aimed at young viewers. Despite warnings from YouTube about the inaccuracy of these designations, Disney continued its policy of labeling channels this way.
The proposed settlement requires Disney to pay a $10 million fine and comply with COPPA regulations, including obtaining parental consent before collecting data from children under 13. In addition, Disney must implement a programme to review the MFK designation of its YouTube videos, unless YouTube introduces age-verification technologies that can verify users’ ages or removes the ability for content creators to label videos as MFK.
The FTC unanimously voted to refer the complaint and proposed order to the Department of Justice, which then filed the case in a federal court in California.
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