Disney will pay a $10m settlement over allegations that it violated kids’ privacy rights, the Federal Trade Commission (FTC) said this week.
The agreement, first proposed in September 2025, resolves a dispute over Disney’s labeling of child-targeted content on YouTube. The thousands of YouTube videos it targets at kids makes it subject to a US law called the Children’s Online Privacy Protection Act (COPPA). Enacted in 1998, COPPA is designed to protect children under the age of 13 from having their data collected and used online.
That protection matters because children are far less able to understand data collection, advertising, or profiling, and cannot understandingfully consent to it. When COPPA safeguards fail, children may be tracked across videos, served targeted ads, or profiled based on viewing habits, all without parental knowledge or approval.
In 2019, YouTube introduced a policy to help creators comply with COPPA by labeling their content as made for kids (MFK) or not made for kids (NMFK). Content labeled MFK is automatically restricted. For example, it can’t autoplay into related content, appear in the miniplayer, or be added to playlists.
This policy came about after the YouTube’s own painful COPPA-related experience in 2019, when it settled for $170m with the FTC after failing to properly label content directed at children. That still ranks as the biggest ever COPPA settlement by far.
Perhaps the two most important restrictions for videos labeled MFK are these: MFK videos should only autoplay into other kid-appropriate content, preventing (at least in theory) kids from seeing inappropriate content. And advertisers are prohibited from collecting personal data from children watching those videos.
A chastened YouTube warned content creators, including Disney, that they could violate COPPA if they failed to label content correctly. They could do this in two ways: Creators could label entire channels (Disney has about 1,250 of these for its different content brands) or individual videos. So, a channel marked NMFK could still host MFK videos, but those individual videos needed to be labeled correctly.
According to the FTC, Disney’s efforts fell short and plenty of child-targeted videos were incorrectly labeled.
The court complaint stated that Disney applied blanket NMFK labels to entire YouTube channels instead of reviewing videos individually. As a result, some child-targeted videos were incorrectly labeled, allowing data collection and ad targeting that COPPA is meant to prevent. For example, the Pixar channel was labeled NMFK, but showed “very similar” videos from the Pixar Cars channel, which was labeled MFK.
The FTC said YouTube warned Disney in June 2020 that it had reclassified more than 300 of its videos as child-directed across channels including Pixar, Disney Movies, and Walt Disney Animation Studios.
This is not Disney’s first privacy rodeo
Disney has a history of tussles with child privacy laws. In 2011, its Playdom subsidiary paid $3 million (at that point the largest COPPA penalty ever) for collecting data from more than 1.2 million children across 20 virtual world websites. In 2021, Disney also settled a lawsuit that accused it and others of collecting and selling kids’ information via child-focused mobile apps.
In the current case, the FTC voted 3-0 to refer this current case to the Department of Justice, with Commissioners Ferguson, Holyoak, and Meador citing what they described as,
“Disney’s abuse of parents’ trust.”
Under the settlement, Disney must do more than pay up. It also has to notify parents before collecting personal information from children under 13 and obtain parents’ consent to use it. Disney must also review whether individual videos should be labeled as made for kids. However, the FTC provides a get-out clause: Disney won’t have to do this if YouTube implements age assurance technologies that determine a viewer’s age (or age category).
Age assurance is clearly something the FTC is pursuing, saying:
“This forward-looking provision reflects and anticipates the growing use of age assurance technologies to protect kids online.”
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