Disney settles with FTC over child data collection through YouTube videos
Disney and the Federal Trade Commission (FTC) have reached an agreement in a case involving the illegal collection of children's data through YouTube.
According to America’s antitrust agency, YouTube collected personal data from children without notifying their parents or obtaining their consent, as is required by the Children’s Online Privacy Protection Act (COPPA).
The entertainment company did so by failing to properly label videos that it uploaded to YouTube as ‘Made for Kids.’ This system allows uploaders to indicate whether videos are intended for children or not. YouTube does not collect personal information from such videos and does not display personalized ads.
The mislabeling allowed Disney to collect personal data from children under 13 and use that data for targeted ads to minors. In addition, children were also exposed to age-inappropriate YouTube features, including autoplay for videos without the ‘Made for Kids’ label.
Furthermore, Disney chose to mark all of its videos uploaded to YouTube at the channel level instead of labeling each video individually. All of these videos were labeled as ‘NMFK,’ which stands for ‘Not Made For Kids,’ allowing Disney to collect personal information from kids and offer personalized ads.
“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,” FTC Chairman Andrew Ferguson said in response.
Under the proposed settlement, Disney will be required to pay a $10 million civil penalty for infringing COPPA. In addition, the company has to make sure that when videos are posted to YouTube, they are labeled as ‘MFK.’
“In my view, this civil penalty is fair given Disney’s misconduct, illegally enriching itself by monetizing personal information collected from users watching child-directed videos without their parents’ consent, in light of its self-curated reputation as one of the world’s most trusted brand names in children’s entertainment,” the FTC says in a public statement.