Disney to pay $10 million to settle US claim of allowing unlawful collection of children’s data

Audio By Carbonatix

Enlarge

By Kanishka Singh

WASHINGTON (Reuters) -Walt Disney will pay $10 million to settle U.S. Federal Trade Commission allegations that the company unlawfully allowed personal data to be collected from children who viewed kid-directed videos on YouTube without notifying parents or obtaining their consent, the FTC said on Tuesday.

Axios was the first to report the settlement that was also confirmed by a Disney spokesperson.

The FTC had alleged that Disney did not designate some YouTube videos as being made for children when they were added to the platform.

The U.S. complaint said the mislabeling allowed Disney, through YouTube, to collect personal data from viewers of child-directed videos who were under age 13 and use that data for targeted advertising to children.

The complaint had alleged that Disney violated the U.S. Children’s Online Privacy Protection Rule.

The rule requires websites, apps and other online services that are directed to children under 13 to notify parents about what personal information they collect, and obtain verifiable parental consent before collecting such information, according to the FTC.

The proposed order requires Disney to “implement an audience designation program to ensure its videos are properly directed as ‘made for kids’ where appropriate,” according to a Tuesday court filing.

“This settlement does not involve Disney-owned and operated digital platforms but rather is limited to the distribution of some of our content on YouTube’s platform,” a Disney spokesperson said.

“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 Disney spokesperson added.

(Reporting by Kanishka Singh in Washington and Bhargav Acharya in Toronto; Editing by Nick Zieminski and Bill Berkrot)