WASHINGTON, D.C. — In a significant victory for digital privacy advocates, a federal court has finalized a settlement requiring The Walt Disney Company to pay a $10 million civil penalty for violating federal children’s privacy laws. The court-approved order, finalized on December 31, 2025, resolves allegations that Disney unlawfully collected personal data from children under 13 through its YouTube content.
The case, brought by the Department of Justice (DOJ) following an investigation by the Federal Trade Commission (FTC), centers on Disney’s failure to properly label thousands of videos as “Made for Kids” (MFK).
The “Made for Kids” Loophole
The investigation revealed that Disney Worldwide Services and Disney Entertainment Operations mislabeled content across more than 1,250 YouTube channels. By classifying child-directed videos—featuring iconic characters from Frozen, Toy Story, and Mickey Mouse—as general audience content, Disney bypassed critical safeguards.
- Targeted Advertising: By failing to use the MFK tag, Disney allowed YouTube’s automated systems to track young viewers and serve them targeted “behavioral” advertisements.
- Consent Violations: Under the Children’s Online Privacy Protection Act (COPPA), companies must obtain “verifiable parental consent” before collecting any data from users under 13. Regulators alleged Disney ignored this requirement entirely for the disputed videos.
- Billions of Views: The mislabeled content garnered billions of views in the U.S. alone, particularly during the early pandemic years when children’s screen time surged.
The Settlement: Beyond the $10M Fine
While the $10 million penalty serves as a deterrent, the court’s permanent injunction imposes strict new operational hurdles on the entertainment giant.
Key Requirements of the Injunction:
- Audience Designation Program: Disney must implement a systemic review process to individually evaluate every video it uploads to YouTube to ensure correct age-targeting.
- Annual Training: The company is now required to conduct mandatory annual COPPA compliance training for all employees involved in digital content distribution.
- Future-Proofing: The order includes a forward-looking provision: Disney must maintain this review program unless YouTube implements advanced “age assurance” technologies that can independently verify a user’s age without creator input.
| Case Detail | Official Status |
| Total Penalty | $10 Million Civil Fine |
| Primary Statute | Children’s Online Privacy Protection Act (COPPA) |
| Regulatory Lead | Federal Trade Commission (FTC) |
| Court | U.S. District Court, Central District of California |
A Growing Pattern of Enforcement
“The Justice Department is firmly devoted to ensuring parents have a say in how their children’s information is collected and used,” said Assistant Attorney General Brett A. Shumate.
This settlement adds to a growing list of major tech and entertainment firms facing multi-million dollar penalties for children’s data breaches, following similar actions against YouTube ($170M) and Microsoft ($20M). For Disney, the settlement applies specifically to its presence on third-party platforms like YouTube and does not impact Disney+ or its owned-and-operated apps.
Disney Parade Flickr Picture by Fabrizio Neitzke
