Disney Settles with FTC for $10M over Kids' Privacy Lawsuit

According to Axios, The Walt Disney Company has reached a $10 million settlement with the Federal Trade Commission (FTC) over a children's privacy lawsuit, the company announced Tuesday.

What's Happening:

The settlement stems from a complaint by the FTC that alleges Disney failed to properly designate certain videos uploaded to YouTube as being "made for kids." This administrative error, which occurred primarily during the early days of the COVID-19 pandemic, allowed for the improper collection of data from children who viewed the content.
The FTC claims Disney violated the 1998 Children's Online Privacy Protection Act (COPPA). This law requires companies to obtain parental consent and notify users before tracking data from content directed at children. By failing to correctly label the videos, Disney inadvertently allowed them to be targeted with online advertising, which is a key reason for the FTC's complaint.
This case is the first known instance of a YouTube content provider settling with the FTC over such violations since the agency's landmark 2019 settlement with YouTube and its parent company, Google. The fine against Disney for content on a third-party platform sets a precedent that could lead to penalties for other content creators that distribute their work on external sites and apps.
The videos at the center of the complaint were largely "storytime" videos featuring celebrities reading to kids, which were uploaded during the pandemic.
As part of the settlement, Disney is required to establish a formal "Audience Designation" program to review videos before they are uploaded to YouTube to ensure correct categorization. Disney noted it already has a process in place but will work to strengthen its compliance.

What They’re Saying:

Disney spokesperson: "Supporting the well-being and safety of kids and families is at the heart of what we do. This settlement does not involve Disney-owned and -operated digital platforms, but rather is limited to the distribution of some of our content on YouTube's platform."

A Closer Look at COPPA: The Law at the Heart of the Matter

The Children's Online Privacy Protection Act, or COPPA, is the foundational law that governs the Disney settlement and many other high-profile privacy cases.
Enacted in 1998 and taking effect in 2000, this federal law was a direct response to the growing commercialization of the internet and its increasing appeal to children.
The goal of COPPA is to give parents control over what information is collected from their children online.
The most critical component of the law is the requirement for companies to obtain "verifiable parental consent" before collecting, using, or disclosing personal information from a child under the age of 13.
Companies must post a clear, comprehensive, and easy-to-understand privacy policy that outlines their data collection practices. This policy must detail what information they collect from children, how they use it, and whether it is shared with third parties.
Parents have the right to review the personal information collected from their child and can request that it be deleted. They can also refuse to allow any further collection or use of that data.
Companies are prohibited from conditioning a child’s participation in an online activity on the child providing more personal information than is reasonably necessary for that activity.
The enforcement of COPPA is primarily handled by the Federal Trade Commission (FTC), which has the authority to investigate complaints and issue significant civil penalties for violations, as seen in the Disney case.

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Disney Settles with FTC Over Privacy Lawsuit

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