Disney Settles $10 Million FTC Case Over Children's Data Collection on YouTube

The Walt Disney Company has agreed to pay a $10 million settlement to the U.S. Federal Trade Commission (FTC) over allegations that it unlawfully collected personal data from children under 13 through misclassified YouTube videos. The FTC claimed that Disney failed to appropriately label certain videos as “Made for Kids,” allowing YouTube to collect data and serve targeted ads without parental consent, violating the Children’s Online Privacy Protection Act (COPPA). The videos in question featured popular franchises like Frozen, Toy Story, and The Incredibles. Despite being alerted by YouTube in June 2020 about the mislabeling, Disney continued to rely on default channel settings rather than individually tagging videos appropriately.

As part of the settlement, Disney is required to implement a video-review system with age-assurance technology to ensure future compliance with COPPA. The company emphasized that the issue was limited to content distributed via YouTube and not its own digital platforms.

This case highlights the ongoing challenges in enforcing children's privacy laws in the digital age. In 2019, Google and YouTube paid a $170 million settlement for similar COPPA violations. The FTC's recent actions against Disney and other companies underscore the importance of robust data protection measures for children online.

For Disney, this settlement serves as a reminder of the importance of maintaining vigilant compliance with privacy regulations, particularly as digital platforms continue to evolve. The company has stated its commitment to maintaining high standards in protecting children's privacy and investing in the tools needed to continue being a leader in this space.

As the digital landscape grows increasingly complex, companies must prioritize transparency and accountability in their data practices to build and maintain consumer trust. The FTC's actions reflect a broader commitment to safeguarding children's privacy in an interconnected world.

The Disney FTC settlement also highlights broader implications for the advertising industry, particularly in relation to content targeted at children. Advertising to young audiences carries unique ethical and legal responsibilities because children are inherently more impressionable and less capable of distinguishing between entertainment and marketing.

Subliminal messaging, or subtle cues embedded within content that influence behavior without conscious awareness, remains a controversial issue, especially in the context of children’s programming. Even when unintended, such messaging can shape preferences, drive consumption, and influence brand loyalty in ways that raise ethical concerns for companies operating in the digital space.

Disney’s settlement serves as a stark reminder that businesses must navigate the fine line between effective marketing and exploitation of vulnerable audiences. With billions of impressions generated by children-focused content on YouTube and other platforms, companies like Disney have a duty to ensure their marketing practices are transparent, compliant, and protective of privacy.

The COPPA regulations are designed to prevent the collection of personal data from children without parental consent. Still, the digital ecosystem’s complexity requires proactive systems to identify, tag, and manage content appropriately. Failure to do so can result not only in financial penalties but also reputational damage, which can undermine consumer trust—a critical asset for any business operating in the family entertainment space.

Looking ahead, Disney faces both an opportunity and a responsibility. The company must invest in robust monitoring systems, employee training, and AI-driven tools to identify content that could inadvertently expose children to targeted advertising or subliminal messaging. Beyond regulatory compliance, Disney’s role as a global leader in entertainment gives it a moral obligation to set industry standards for ethical marketing practices. By leading in transparency and protection of young audiences, Disney can help shape the broader conversation about advertising ethics, digital privacy, and responsible content creation. This proactive approach not only safeguards children but also reinforces Disney’s credibility as a business committed to responsible innovation in an increasingly digital, data-driven world.

This careful management of children’s privacy and marketing practices will likely serve as a benchmark for other companies, highlighting that compliance with laws like COPPA is just the baseline; ethical responsibility is equally crucial for long-term success and public trust.