Disney Settles FTC Allegation for $10M Over Using Cartoons to Collect Kids’ YouTube Data

Disney has agreed to pay $10 million to resolve allegations from the Federal Trade Commission (FTC) that it violated federal law. The company allegedly misled consumers by incorrectly labeling cartoons on YouTube, allowing the unlawful collection of children’s personal data.

The FTC claims that Disney failed to properly label certain videos of its popular children’s cartoons uploaded to YouTube as “Made for Kids.” This designation is meant to prevent features like personalized ads. Instead of marking individual videos as either “Made for Kids” or “Not Made for Kids,” Disney allegedly left the default designation at the channel level. As a result, all videos on a “Not Made for Kids” channel were automatically labeled as such.

According to the government, this mislabeling affected videos from kid-friendly movies such as “The Incredibles,” “Toy Story,” and “Frozen.” These videos were incorrectly marked as “Not Made for Kids,” bypassing YouTube’s stricter rules, including limits on autoplaying unrelated “Not Made for Kids” content. This allowed Disney to collect children’s data and serve targeted ads, violating the Children’s Online Privacy Protection Act (COPPA), which requires parental consent to collect information from children under 13.

The FTC alleges that Disney was aware of the issue since 2020, when YouTube corrected the labels on over 300 of its videos. Despite this, Disney continued to upload videos with only the default channel-level designation, according to the complaint.

Under the proposed settlement, Disney will pay a $10 million civil penalty, obtain parental consent for data collection from children under 13, and establish a program to review the labeling of YouTube videos. This program must be maintained for ten years unless YouTube develops its own system to determine user age categories. If such a system is implemented, Disney will no longer need its own labeling process.