Disney has agreed to pay US$10 million to end the FTC’s allegations that it failed to properly label its YouTube content as “made for kids.”
Key takeaways
- The FTC alleged Disney failed to properly designate uploaded YouTube content as made for kids.
- Disney agreed to pay US$10 million and to implement a new programme for designating its YouTube videos.
https://www.shutterstock.com/g/tapbelgium
The US Federal Trade Commission (FTC) announced the proposed settlement today. According to the FTC’s complaint, Disney failed to correctly mark its uploaded videos as child-directed in some instances.
According to the FTC, those allegedly improperly labelled videos allow targeted ads through personal data collected from children watching those videos without parental notice or consent in violation of the Children's Online Privacy Protection Act (COPPA) Rule.
Disney operates and uploads videos to multiple YouTube channels. According to the FTC, under Disney’s internal policy, the company sets its YouTube channels’ audience designations as “made for kids” (MFK) or “not made for kids” (NMFK) and maintains those designations when uploading individual videos to that channel, regardless of the content.
“Accordingly, under this policy, when a video is uploaded to a channel Disney has designated as NMFK, Disney would allow the video to remain by default designated as NMFK, even if the video were child-directed,” the FTC claimed. The regulator added, “As a result, Disney has failed to designate a significant number of child-directed videos as MFK when they are uploaded to channels that are designated as NMFK.”
Disney inconsistently marked content as geared toward children, despite some content clearly being made for child users, such as the use of animated characters or certain audio, the FTC claimed.
“Disney’s deficient marking of videos as MFK is also demonstrated by inconsistent designations for very similar videos that happen to appear on different channels but that have common child-directed subject matter, visual content, use of animated characters or child-oriented activities, music or other audio content, and language or other characteristics that are directed to children,” according to the FTC’s complaint.
YouTube also brought the alleged inconsistencies to Disney’s attention. Per the FTC, as early as June 2020, YouTube informed Disney that it had changed over 300 videos uploaded by Disney from NMFK to MFK. However, those raised flags allegedly didn’t change Disney’s practices.
“Despite Disney privacy compliance employees learning from YouTube in 2020 [of] YouTube’s reclassification of videos as MFK, Disney did not revise its policy of designating videos based on the channel-level default rather than designating individual videos as MFK when appropriate,” the FTC said.
Disney also allegedly allowed targeted ads to run on videos it designated as not made for kids but were directed to children, on MFK and NMFK YouTube channels.
The FTC claimed Disney’s alleged actions violated the COPPA Rule by failing to provide direct notice to parents of the children’s data it collected and how such data is used or disclosed. Disney also allegedly violated the COPPA Rule by failing to provide notice of its children’s data practices. Lastly, the FTC alleged Disney failed to obtain parental consent before collecting, using or disclosing children’s personal information as required under the COPPA Rule.
Disney, FTC reach a deal
Disney did not admit or deny any of the FTC’s allegations. But it did agree to settle the claims.
According to the proposed settlement filed today in the US District Court for the Central District of California, Disney has agreed to pay the FTC US$10 million to end the regulator’s investigation. The company also agreed to create, implement and maintain a programme, within 180 days after the order is entered, to review all its YouTube videos and individually determine if it is a kids video and if the video should be designated as a video made for kids.
According to the proposed order, a kids video is defined as, “based on an assessment of its subject matter, visual content, use of animated characters or Child-oriented activities and incentives, music or other audio content, age of models, presence of Child celebrities or celebrities who appeal to Children, language or other characteristics, whether advertising promoting or appearing on the website or online service is directed to Children, competent and reliable empirical evidence regarding audience composition and evidence regarding the intended audience.”
That programme must be maintained for 10 years. A year after the order is entered, Disney must submit a compliance report to the FTC. That report must, in part, detail how it obtains verifiable parental consent prior to collecting, using or disclosing children’s personal data via YouTube videos, unless such consent isn’t required under the COPPA Rule.
That report also isn’t required if YouTube no longer allows uploaders to designate an audience for a video as made for kids or YouTube implements age-verification tools. Disney’s reporting also isn’t needed if YouTube restricts the collection of children’s data, consistent with the COPPA Rule.
In 2019, YouTube agreed to pay a then record-setting US$170 million COPPA fine.
Disney didn’t respond to a request for commen