Disney’s $10 Million Mistake: How Lax Labeling Exposed Children to Online Data Harvesters

It’s a plot twist worthy of a Disney villain: one of the world’s most beloved companies, caught in a federal dragnet for mishandling children’s data. This summer, Disney agreed to pay a $10 million civil penalty after investigators revealed that the company failed to properly protect young viewers on YouTube, leaving their personal information vulnerable to tracking and targeted ads. The settlement shines a harsh spotlight on the high-stakes battle over children’s privacy online - and the lucrative business of mining kids’ digital footprints.

Fast Facts

• Disney will pay a $10 million civil penalty to settle violations of the Children’s Online Privacy Protection Act (COPPA).
• Regulators say Disney mislabeled hundreds of kid-directed YouTube videos, allowing data collection and targeted ads for viewers under 13.
• The Justice Department and FTC allege Disney continued mislabeling content even after YouTube flagged the issue in 2020.
• The settlement requires Disney to alert parents before collecting children’s data and to properly designate all “Made for Kids” content on YouTube.
• This case follows a 2019 $170 million settlement with Google/YouTube over similar COPPA violations.

Behind the Magic: How Disney’s Data Lapses Came to Light

Federal regulators began scrutinizing Disney after a referral from the Federal Trade Commission (FTC), which has made protecting children’s privacy a top priority. Under COPPA, companies must obtain parental consent before collecting personal data from children under 13. To help enforce this, YouTube requires content creators to mark videos as “Made for Kids” (MFK), which blocks personalized ads and restricts data collection.

But according to the Justice Department, Disney failed to properly label hundreds of its child-focused videos. This mislabeling, regulators say, opened the door for YouTube and Disney to gather personal information from young viewers - data that was then used to serve targeted ads. Even after YouTube itself reclassified over 300 Disney videos in 2020, the company allegedly continued to overlook correct labeling protocols.

“The complaint says the mislabeling allowed Disney, through YouTube, to collect personal data from children under 13 viewing child-directed videos and use that data for targeted advertising to children,” the FTC stated. Disney profited both from YouTube’s ad placements and its own direct ad sales - raising the stakes for compliance lapses.

The $10 million penalty, while dwarfed by Disney’s vast revenues, is intended as a warning shot. The settlement also includes strict new requirements: Disney must now alert parents before collecting children’s data and rigorously ensure all kid-directed content is correctly tagged as “Made for Kids.”

This case is part of a broader reckoning for tech and media giants. In September 2024, the FTC spotlighted how video streaming and social media companies rake in billions by surveilling and monetizing the digital habits of children and teenagers. The Disney case sends a clear message: even household names aren’t above the law when it comes to protecting kids online.

Conclusion

For Disney, the story doesn’t end with a check to the Treasury. As regulators ramp up scrutiny, companies across the digital landscape face a new era of accountability. The real heroes - or villains - of this story will be those who choose to safeguard children’s privacy, not just their own profits.

WIKICROOK

• COPPA: COPPA is a U.S. law that requires websites and apps to protect the personal information of children under 13 and obtain parental consent.
• Targeted Advertising: Targeted advertising delivers ads to users based on their personal data or online behavior, tailoring content for greater relevance and engagement.
• Made for Kids (MFK): Made for Kids (MFK) is a YouTube label for videos aimed at children, activating stricter privacy protections and limiting data collection for young viewers.
• Personal Data: Personal data is any information that can identify a person, such as names, addresses, or photos. It requires careful handling for privacy.
• Civil Penalty: A civil penalty is a financial fine imposed by authorities for breaching cybersecurity laws or regulations, serving as a deterrent and compliance tool.