Sept. 3 (UPI) — Disney will pay millions of dollars in fines to settle a lawsuit by the Federal Trade Commission over allegations the entertainment giant collected troves of private data on young users on YouTube without prior parental consent.
Such consent is required by federal law.
The legal complaint filed by the U.S. Department of Justice claimed that Disney Worldwide Services Inc. and Disney Entertainment Operations LLC allegedly violated the Children’s Online Privacy Protection Rule by failing to properly label Disney videos uploaded to YouTube as “Made for Kids” content.
“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,” FTC Chair Andrew N. Ferguson said Tuesday in a statement.
Under the proposed settlement, Disney will be obligated to pay a $10 million civil penalty and forced to implement mechanisms to obtain consent and notify parents prior to collecting personal data from viewers younger than 13.
In addition, Disney is empowered to seat a panel in order to review YouTube’s content designations.
According to the FCC, its newly proposed order will supposedly “transform” how Disney designates its video content on YouTube going forward while “encouraging adoption of age assurance technologies on YouTube.”
Disney opted to mark all of its videos uploaded to YouTube at the channel level and “did not change the default to mark each video individually,” the legal complaint added.
According to the complaint, the mislabeling permitted Disney to collect personal data from children under age 13 via YouTube on child-directed videos and YouTube utilized that data for targeted advertising aimed at children.
Disney reportedly received a portion of that revenue and allegedly “exposed children to age-inappropriate YouTube features,” which included items such as autoplay to videos technically not “Made for Kids.”
YouTube in 2019 began its requirement for creators, which included Disney, to indicate “Made for” or “Not Made for” content following a 2019 FTC settlement in order to comply with COPPA.
On Tuesday, the FTC’s chair said its 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,” Ferguson stated.
It arrived on top of a separate FCC investigation launched in March into possible “DEI discrimination” hiring practices at Disney and ABC.
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