Why is Disney paying a $10 million fine? FTC settlement over YouTube videos explained

The Federal Trade Commission (FTC) charged Disney with violating the privacy of children and Disney paid a 10 million dollar fine. The issue was related to how Disney had uploaded its videos on YouTube. Part of the videos targeted children but could not be identified as such and, therefore, it was possible to gather personal information about under-13 children.

Another law referred to as the Children Online Privacy Protection Act (COPPA) mandates businesses to obtain parental consent before collecting information on children. The videos that are not labeled as "Made For Kids" are considered regular audience videos. That opened the gate to tracking and advertisements otherwise prohibited by law.

Disney is sidestepping a protracted battle in court by paying off the FTC. The company must pay the fine and comply with new regulations in order to ensure the occurrence of the same issue is not repeated.

What did the FTC say about Disney's YouTube videos?

The FTC said the company failed to meet the basic rules of COPPA. The issue was with YouTube videos that should have been marked for kids but were not. This led to the collection of children’s data without parental consent. FTC Chairman Andrew N. Ferguson said,

“This case underscores the FTC’s commitment to enforcing COPPA, which was enacted by Congress to ensure that parents, not companies like Disney, make decisions about the collection and use of their children’s personal information online. 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."

Under the settlement, the company must now change its practices. The company has to ensure every video meant for kids is properly labeled as such and reviewed before release.

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What must Disney do now?

The $10 million fine is only part of the settlement. The company has to make big changes to the way it handles videos on YouTube.

First, it must label all videos made for children correctly. Second, the company has to make sure no personal data from children under 13 is collected without parents saying yes. Third, it must create a review program to keep track of its labeling system.

The FTC also said YouTube may need better tools to check the age of its users. Until then, companies like Disney carry the full responsibility to protect young viewers. The case shows that regulators will enforce these rules even on well-known media companies.

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Disney is paying a $10 million fine because it did not follow COPPA rules. The FTC found that the company failed to label some YouTube videos as content for kids, which let data be collected from under-13 viewers.

As part of the settlement, Disney must pay the penalty, fix its labeling, and make sure children’s data is not collected without parental consent. This action highlights the pressure on big companies to follow child privacy laws online.

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