Disney Agrees To $10 Million FTC Settlement For Collecting Children’s Data Through YouTube Posts

The Walt Disney Company has agreed to pay $10 million to settle a Federal Trade Commission complaint alleging violations of children’s online privacy laws tied to videos uploaded on YouTube during the pandemic. The case marks a significant milestone, as it is the first time since the FTC’s landmark 2019 settlement with YouTube and parent company Google that a content provider, rather than the platform itself, has been penalized for improper handling of children’s data.

At the center of the dispute are a series of storytime videos, many of them featuring celebrities, that Disney released on YouTube in the early months of COVID-19. According to the FTC, the company failed to properly flag those videos as being directed at children. That misstep meant the content could be served with targeted advertising, a practice prohibited under the Children’s Online Privacy Protection Act (COPPA) without parental consent. The agency further alleged that data from young viewers was collected in the process.

Disney has described the issue as an administrative error. While the videos in question represent a fraction of its YouTube presence, the company acknowledged the mislabeling and opted to settle. As part of the agreement, Disney will implement a formal “Audience Designation” program to strengthen internal review processes for content distribution on third-party platforms.

“Supporting the well-being and safety of kids and families is at the heart of what we do,” a Disney spokesperson said in a statement, emphasizing that the settlement does not involve Disney-owned platforms. The company stressed its longstanding commitment to compliance with children’s privacy rules and pledged to continue investing in safeguards.

The settlement underscores the complex obligations content providers face in navigating digital distribution. Under YouTube’s policies, publishers, not the platform, are responsible for labeling videos that target children under 13. With the vast volume of uploads, mistakes are common, but the FTC has signaled it is prepared to hold individual providers accountable.

Meanwhile, lawmakers and advocacy groups are pressing for clearer standards. The Kids Online Safety Act (KOSA), reintroduced in Congress earlier this year, seeks to establish stronger federal requirements, though constitutional challenges have slowed progress at the state level. The Supreme Court’s recent endorsement of an online age verification mandate has reignited debate, intensifying calls for nationwide legislation.

For animation studios, entertainment companies, and digital publishers, the Disney case serves as a cautionary tale. The FTC’s focus has shifted from platforms to content providers, making it clear that compliance cannot be delegated. As the landscape of children’s digital media continues to evolve, creators must balance innovation and accessibility with a heightened responsibility to protect young audiences.