The American entertainment and media giant Disney has agreed to pay $10 million to settle a case concerning the illegal collection of children's data, according to the U.S. Department of Justice. This announcement brings to a close a legal dispute initiated by the Federal Trade Commission (FTC), and a U.S. federal court has approved the settlement agreement between the government and both Disney World Services and Disney Entertainment Operations.
Details of fines and violations
Under the terms of the settlement, Disney will pay $10 million in civil penalties to resolve allegations that it violated the Children’s Online Privacy Protection Act (COPPA). The government complaint centered on the company’s practices on its video-sharing platform, YouTube, where authorities alleged that Disney failed to properly label its channel content as “directed to children.”.
This failure in classification has allowed advertising platforms to collect data on young viewers and use it to target them with personalized ads (Behavioral Advertising), which is a clear violation of laws that prohibit tracking children’s digital behavior for commercial purposes without strict controls.
What is the Children's Privacy Protection Act (COPPA)?
To understand the context of this issue, it should be noted that the Children’s Online Privacy Protection Act (COPPA) is a US federal law enacted in 1998. This law prohibits online platforms and websites from collecting, using, or disclosing personal information of children under the age of 13 without prior notification and explicit consent from the parents.
The law primarily aims to give parents control over the information collected about their children online, and to protect them from commercial and marketing exploitation that relies on analyzing browsing behaviors.
Historical context: Tech giants under scrutiny
This case is not unique in the world of technology and media; rather, it is part of a series of US government actions to regulate the digital space. In 2019, Google and its platform, YouTube, agreed to pay a record fine of $170 million to settle similar allegations concerning the collection of children's data without parental consent. That case was a turning point, forcing YouTube to change its policies and require content creators to specify whether their videos are intended for children or not.
Disney’s current settlement indicates that regulatory authorities will continue to pursue large companies to ensure their compliance with privacy standards, sending a clear message that major brands are not above the law when it comes to children’s digital safety.
The importance of the event and its expected impact
This settlement is particularly significant given Disney's position as one of the world's largest family entertainment companies. The ruling is expected to prompt other companies in the digital content industry to more thoroughly review their user data policies to avoid similar fines.
In addition to the financial penalty, the settlement requires Disney to adhere to strict compliance requirements in the future, ensuring that these violations are not repeated and enhancing digital safety standards for children on global platforms.
