The Walt Disney Company has reached a settlement with the Department of Justice (DOJ), agreeing to pay a $10 million civil penalty over claims of violating the Children's Online Privacy Protection Act (COPPA) through its YouTube operations. Announced on Wednesday, the case puts a spotlight on the advertising practices surrounding child-focused content on the platform.
According to federal prosecutors, Disney purportedly failed to accurately classify certain videos as being directed toward children. This misclassification allowed for targeted advertising and data collection without obtaining the required parental consent, a clear breach of COPPA. The Act strictly prohibits online entities from gathering or exploiting personal data from children under thirteen without explicit parental notification and consent.
The severity of the allegations is magnified by Disney's vast online reach, with its YouTube content amassing billions of views and predominantly appealing to a young audience. The complaint points out the extensive scale at which ads were shown to child viewers and personal data was collected, emphasizing the potential harm caused by such practices.
The resolution of the case occurred in a federal court in California, culminating in a stipulated order. This allowed Disney to settle the matter without admitting any liability or the need for a trial, with the court subsequently endorsing the agreement. Under the terms of the settlement, Disney not only has to pay the substantial penalty but also faces a prohibition against any future YouTube operations that violate COPPA.
Furthermore, the order mandates Disney to initiate a rigorous compliance program. This includes the establishment of internal controls, comprehensive employee training, and systems designed to accurately determine child-directed content. Regular audits and reviews will also be part of the program to ensure ongoing adherence.
Assistant Attorney General Brett Shumate underscored the government's commitment to safeguarding parental rights and the imperative for companies to refrain from exploiting children's data for profit. He emphasized the continuance of stringent enforcement actions.
The Disney case is indicative of a larger trend where the government is taking a firm stand against Big Tech, asserting that popularity and size do not exempt an entity from adhering to laws protecting children's privacy online. With COPPA in force since 2000 and regulated by the Federal Trade Commission, the increasing penalties over time reflect a growing intolerance for non-compliance.
Disney's YouTube channel, with over 6.5 million subscribers, ranks among the top family entertainment brands on the internet, a position that comes with significant responsibilities. Parents have come to expect robust online safeguards for their children, and the settlement, while not confirming any findings beyond the government's allegations, further intensifies the scrutiny faced by corporations regarding the treatment of children in digital domains.
Lawmakers have called for decisive action, highlighting the importance of accurate content labeling to prevent unauthorized data collection and maintain parental control over children's online interactions. As regulatory enforcement intensifies, the Disney settlement is a testament to the broader clampdown on tech companies accused of prioritizing profits over child privacy and parental consent.
