In 2019, YouTube was fined $170 million for violating the Children’s Online Privacy Protection Act, which makes it illegal to collect data from children under the age of 13 without their parents’ explicit consent. After that, the company instituted a policy that moving forward, all content created for children had to be labeled as “Made for Kids.” To protect young viewers’ privacy, they also disabled personalized ads, comments, and any other features that could be used to mine their personal data.
Disney took one look at that policy, shrugged, and decided to play FAFO. In 2020, YouTube found out that around 300 of Disney’s videos were not properly labeled as children’s content, which means data collecting was still turned on. YouTube also discovered that the Mouse had been conducting targeted advertising campaigns across at least 11 of its channels. The FTC stepped in and this week, Disney agreed to pay a $10 million fine.
Disney will pay a $10 million civil penalty to the Federal Trade Commission after the company allegedly failed to comply with a law designed to protect children’s data.
The FTC alleged in a statement on Tuesday, Sept. 2, that the entertainment company failed to designate YouTube videos as “Made for Kids.” That disclaimer is made to comply with the Children’s Online Privacy Protection Act, the federal law that protects the data of children under 13 years of age and prevents it from being collected and used for targeted advertising.
Due to Disney’s alleged violation, it has agreed to pay $10 million to settle the FTC’s claims. Additionally, Disney must also maintain an audience designation program to ensure that all its YouTube videos are correctly classified, according to the FTC’s statement.
Per the FTC’s complaint, in June 2020, YouTube notified Disney about around 300 videos that were not marked “Made for Kids” (MFK), including videos featuring characters from The Incredibles, Coco, Toy Story, Tangled and Frozen. Although YouTube redesigned those videos, the company allegedly did not overhaul its policy. For the next couple of years, Disney continued designating videos “based on the channel-level default rather than designating individual videos as MFK when appropriate,” the official complaint alleges.
Additionally, the complaint claimed that the targeted advertising campaigns were allegedly enabled on videos marked both MFK and “Not Made for Kids” (NMFK), and uploaded to MFK channels, including: Disney Channel, the Disney Descendants channel, the Disney Family channel, the Disney Games channel, the Disney Junior channel, the Disney Music channel, the Disney XD channel, the Mickey Mouse channel, the Pixar Cars channel, the Radio Disney channel and the Nat Geo Kids channel.
Disney obtains a share of YouTube’s ad revenue on its videos, and also sells advertising directly.
“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 Ferguson said in the FTC statement.
Disney issued a statement, saying, “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 statement continued. “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.”
Although all content creators were supposed to label their back catalogs, YouTube didn’t really have an easy way of enforcing that other than requiring people to check a box if they went back to edit a video’s details page. I originally assumed that Disney just decided not to bother doing that while waiting to see how long they could get away with it, but it sounds like they were actively trying to skirt the policy for both older and newly uploaded content. I cannot say that I’m surprised at all, but it’s still worrisome just how easy it is for these big companies to ignore the rules until they get caught. Let’s face it: $10 million is probably a drop in the bucket compared to whatever Disney profited from children’s data by breaking the law. That’s the thing that’s so frustrating.
Photos credit: RDNE Stock project, Kampus Production on Pexels
This “fine” is basically the equivalent of a consultant’s fee for them. They got plenty of information (and made money while doing it) in exchange for a few million. This is still a win for Disney.
Disney has no shame. This fine is pocket change for them. Disney pretends to value families and children, but only as a fount of cash.
Don’t be surprised if they get caught doing the same thing again.
Fine should have been at least $100M.
Real consequences.
$10M is all the money in the world to me, but to the disney corp? Pocket change.