‘Inappropriate videos’: FTC’s Chris Mufarrige explains Disney’s $10M settlement over ‘collecting’ kids’ data

Federal Trade Commission (FTC) Bureau of Consumer Protection Director Chris Mufarrige appeared Tuesday on Fox Business’ “The Bottom Line” to discuss Disney’s $10 million settlement over an investigation into collecting children’s data through YouTube.

In a press release on Tuesday, the FTC announced Disney agreed to pay $10 million after allegations that the company allowed children’s personal data to be collected from “kid-directed” YouTube videos without notifying parents or obtaining consent. Speaking with Fox Business’ Dagen McDowell, Mufarrige said the settlement violated the Children’s Online Privacy Protection Act (COPPA).

“Today’s settlement with Disney is part of the Commission’s broader focus on protecting children online. And what we found today, what we found in the settlement is that Disney violated the Children’s Online Privacy Protection Act, which Congress passed to ensure that parents, rather than content creators, have control over their children’s data,” Mufarrige said.

“So as we learned in the investigation, we learned that Disney was actually frequently misdesignating videos, which led to Disney collecting data that they shouldn’t have,” Mufarrige added. “And it also led to children watching harmful and, at times, inappropriate videos. Our order in the settlement ensures that parents moving forward can have confidence that their children are safe.”

In 1998, Congress passed COPPA, making it unlawful for an operator of a website or online service directed to children under 13 to collect personal information from the child. By 2012, the bill was updated by the FTC, creating additional parental notice and consent requirements and widening the definition of children’s personal information.

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According to the FTC’s complaint, filed by the Department of Justice, Disney Worldwide Services, Inc. and Disney Entertainment Operations LLC violated COPPA by “failing to properly label some videos it uploaded to YouTube as ‘Made for Kids.’”

“By mislabeling the videos, the FTC alleged Disney, through YouTube, collected personal data from children under 13 who viewed the child-directed content and used the data “for targeted advertising to children.”

McDowell went on to ask Mufarrige if he believes companies like Disney that are “skirting these child protections” are doing so intentionally.

“So our investigation… it revealed that Disney had a broad video designation program,” Mufarrige said. “And what our order tries to do, or what our order will do, is ensure that at the video level, Disney will now be reviewing the content to ensure that they’re labeling videos appropriately. So moving forward, parents can be sure that their children are safe.”

Following the settlement, a spokesperson for Disney told CBS News that the allegations had not involved the company’s owned and operated digital platforms and were instead limited to some of the content on the company’s YouTube platform.

“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,” Disney’s spokesperson told the outlet.

Disney previously faced criticism for promoting social justice inclusions in both its films and corporate practices. In February, the company announced it would revamp its diversity, equity, and inclusion programs, replacing its “Diversity & Inclusion” performance factor with a “Talent Strategy” metric.

The move came notably after President Donald Trump’s return to the White House and his administration’s crackdown on DEI practices for the federal government, as many businesses and universities adjusted their programs to align with the administration.

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