The Walt Disney Company said Tuesday it will pay $10 million to settle allegations by the Federal Trade Commission that it mishandled children's privacy protections on YouTube, marking the first known case of a content provider-not the platform itself-facing FTC penalties over mislabeled videos.
The FTC complaint accused Disney Worldwide Services and Disney Entertainment Operations of violating the Children's Online Privacy Protection Act, or COPPA, by failing to designate certain videos uploaded to YouTube as "made for kids." The agency said the mislabeling allowed data collection and age-inappropriate features on videos clearly targeting children, including clips from Frozen, Coco, Toy Story and The Incredibles.
"Our order penalizes Disney's abuse of parents' trust, and, through a mandated video-review program, makes room for the future of protecting kids online - age assurance technology," FTC Chairman Andrew N. Ferguson said in a statement.
The law, passed in 1998, requires companies to notify parents and obtain consent before collecting personal data from children under 13. By failing to properly label its content, Disney exposed young viewers to targeted advertising and data collection, regulators said.
Disney conceded it made what it called an "administrative error" in classifying certain videos uploaded mostly during the pandemic. A spokesperson said, "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." The company added that it "has a long tradition of embracing the highest standards of compliance with children's privacy laws."
Under the settlement, Disney will create an "Audience Designation" program to review and classify videos before upload, formalizing processes to prevent similar violations.
YouTube requires uploaders to label videos that target children. Failure to do so can carry "legal consequences under COPPA and other laws," according to its policies. The Alphabet-owned company began enforcing those rules after reaching its own $170 million settlement with the FTC and New York state in 2019. More recently, YouTube agreed to pay $30 million to settle a separate children's privacy lawsuit.
The case underscores how regulators are expanding enforcement beyond platforms to include publishers of content. Industry lawyers said the Disney action signals that media companies distributing content on YouTube and other platforms could now face direct liability for compliance errors.
The FTC investigation, which began during the Biden administration, also highlighted how online age verification remains difficult. Children's privacy advocates have pushed for stronger laws, while tech firms have experimented with tools to estimate age. In July, YouTube said it would begin testing new age estimation features for certain logged-in users.
Regulators have broadened enforcement of COPPA in recent years. Epic Games, maker of Fortnite, agreed in 2022 to pay $275 million to resolve allegations that it violated children's privacy laws. TikTok, Microsoft and others have faced similar fines. The settlement with Disney, though relatively small, indicates the FTC's willingness to hold content creators directly responsible for compliance lapses.
