The case, filed by the U.S. Department of Justice on behalf of the FTC, accused Disney Worldwide Services Inc. and Disney Entertainment Operations LLC of failing to comply with COPPA by not properly labeling Disney videos on YouTube as “Made for Kids.” This mislabeling allegedly allowed the company to collect children’s data for targeted advertising purposes.
“This case highlights the FTC’s commitment to upholding COPPA, which ensures that parents, not corporations, control how their children’s personal information is used online,” said FTC Chair Andrew N. Ferguson in a statement.
As part of the settlement, Disney will pay a $10 million civil penalty and implement stricter mechanisms to notify parents and obtain consent before collecting data from underage users. The company will also be required to establish a panel to review how its YouTube content is designated. According to the FTC, these measures are intended to reshape how Disney manages child-directed content on the platform and to encourage the adoption of age verification technologies.
The complaint explained that Disney opted to designate its content at the channel level rather than individually marking each video as “Made for Kids” or “Not Made for Kids.” This approach allegedly enabled the collection of data from child-directed videos, which YouTube then used for targeted advertising. Disney reportedly received a share of the ad revenue and, in the process, exposed children to age-inappropriate features such as autoplay.
The FTC noted that YouTube first introduced mandatory labeling requirements for creators, including Disney, in 2019 following an earlier settlement over COPPA violations. Despite these requirements, Disney allegedly continued mislabeling its content, undermining parental safeguards.
“The order penalizes Disney’s abuse of parental trust and sets a framework for protecting children online through mandated video review and age assurance technology,” Ferguson added.
The settlement arrives alongside an unrelated investigation launched earlier this year by the Federal Communications Commission (FCC) into alleged hiring practices at Disney and its subsidiary ABC. While separate, the two cases add to the regulatory pressure the entertainment giant is facing.
The Disney case underscores growing scrutiny of how major media and technology companies handle children’s privacy online, particularly as regulators push for stronger safeguards in digital environments where young audiences are most active.
