The FTC charges Disney with failing to label its children’s cartoons on YouTube as “Made for Kids.” This label restricts features like data collection, intended to limit targeted ads towards children. Instead of categorizing each video individually, Disney reportedly left the setting at the channel level, causing videos to be mislabeled as “Not Made for Kids” despite being child-friendly.

As a result, videos from movies such as “The Incredibles,” “Toy Story,” and “Frozen” were inaccurately marked, allowing YouTube to autoplay other similar videos and enabling Disney to collect kids’ information and serve ads. This action is considered a breach of the Children’s Online Privacy Protection (COPPA) Rule, which mandates parental consent for data collection from children under 13.

The government asserts that Disney should have been aware of the incorrect labels since YouTube notified them in 2020, correcting over 300 videos to the “Made for Kids” label. Despite this, Disney allegedly continued utilizing the channel-level default designation for uploads, according to the FTC.

With the proposed settlement, Disney will pay the civil penalty, obtain parental consent for gathering under-13 data, and establish a new program to ensure proper video labeling on YouTube for the next decade. This program requirement can be lifted if YouTube develops its own comprehensive system for identifying users’ age categories.