Disney has agreed to pay $10 million to settle a lawsuit from the Federal Trade Commission accusing it of illegally collecting personal data from children on YouTube.The agency challenged the entertainment giant’s mislabeling of certain videos made for youngsters, which allowed it to serve targeted ads. The deal opens the door for similar payouts from big entertainment companies that may have also failed to specifically designate their content on YouTube as made for children.In a statement, a company spokesperson said the settlement doesn’t involve Disney-owned and operated platforms and is “limited to the distribution of some of our content” on YouTube. “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,” the rep added.The FTC alleged violations of the Children’s Online Privacy Protection Act, the central law protecting youngsters on the internet that restricts tracking by online services. The rule requires websites and apps directed at children under 13 to obtain consent from parents about the collection of personal data.In order to comply with COPPA, YouTube in 2019 began requiring creators to indicate if their videos are made for kids or not. The former designation ensures that some features on videos — like the collection of personal data for targeted advertising, posting of comments and autoplay of age-inappropriate content — are disabled.By default, Disney marked all of its videos on YouTube as not specifically made for children, even after the Alphabet-owned company told the entertainment giant that it had changed the designations on more than 300 of videos, according to the complaint. This includes content from movies like Frozen, Inside Out and Encanto featuring sing-alongs and story times.Since 2020, at least 12 ad campaigns with over 350,000 impressions ran on Disney channels that should’ve barred targeted advertising.Under the deal, the entertainment giant will create a program to review whether videos posted to YouTube should be designated as made for kids.“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,” said FTC Chairman Andrew Ferguson in a statement. “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.”
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