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Disney has agreed to pay a $10 million settlement after the U.S. Federal Trade Commission (FTC) accused it of unlawfully allowing children's personal data to be collected. It seems the issue came down to some boxes that were left unchecked on the company's YouTube uploads.
The FTC announced the settlement on Tuesday, alleging that Disney had violated the Children's Online Privacy Protection Act (COPPA). Specifically, the FTC accused Disney of failing to inform its child-targeted content's audience that it was tracking their data, or securing parental consent for such tracking. Both of these are required under COPPA.
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"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 β age assurance technology," said FTC chairman Andrew N. Ferguson.
In addition to Disney's $10 million settlement, the FTC has ordered the company to establish a new 10-year program reviewing all of its YouTube videos and appropriately designating them as either for or not for kids.
"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 Disney spokesperson told Axios. "Disney has a long tradition of embracing the highest standards of compliance with children's privacy laws, and we remain committed to investing in the tools needed to continue being a leader in this space."
Tracking children under 13 without their parents' knowledge likely sounds alarming to many such caregivers. In this case, it appears that the issue may have simply been the result of incorrectly answered questions in YouTube's upload forms.
How did Disney allegedly allow children's data to be tracked?
To help users comply with COPPA, YouTube requires uploaders to specify whether or not each video is made for kids. Users can indicate this on each individual video, as well as configure their settings so that all future and existing uploads on their channel will be considered either for or not for kids.
When a video is marked as made for kids, YouTube restricts or disables some of its functionality. This includes the comment section, notifications, and significantly, data collection and targeted advertising. If a video isn't marked as made for kids, YouTube is able to collect viewers' personal information and tailor advertisements to them.
According to the FTC's complaint, Disney's corporate policy is to set its various YouTube channels as either for or not for children, and adhere to that default designation for any future uploads. As such, Disney allegedly failed to appropriately label a "significant number" of child-targeted videos when uploading them to YouTube channels classified as not made for kids.
Impacted YouTube channels included Disney, Pixar, Disney Plus, Walt Disney Studios, Disney Animation Studios, Disney Movies, and Disney on Ice, all of which were allegedly marked as not made for kids. Due to this designation, even clips from popular children's movies such as Frozen, Moana, Cars, and Tangled were similarly marked.
"The failure to mark child-directed videos appropriately as [made for kids] was brought to Disney's attention as early as June 2020, when YouTube informed Disney that it had changed the designations from [not made for kids to made for kids] for more than three hundred videos," read the FTC's complaint. "[Despite this], Disney did not revise its policy of designating videos based on the channel-level default rather than designating individual videos as [made for kids] when appropriateβ¦.
"Disneyβs failure to accurately designate child-directed videos as [made for kids] results in YouTube collecting personal information and placing targeted advertisements on child-directed videos on Disneyβs behalf."
YouTube itself fell afoul of COPPA in 2019, receiving a $170 million fine from the FTC. The company subsequently introduced its made for kids label to help bring the platform and its users in line with the act. Unfortunately for Disney, such features are only useful if they're used properly.
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