Disney Agrees to $10 Million Settlement with FTC Over YouTube Children's Privacy Breach

Disney agreed to a $10 million settlement with the FTC over allegations of violating children's privacy rules on YouTube. The company admitted to an administrative error in categorizing videos as not being made for children, which allowed them to be targeted with online advertising. Disney will establish a program to ensure correct categorization of videos in the future.

The Walt Disney Company has agreed to a $10 million settlement with the Federal Trade Commission (FTC) over allegations of violating children's privacy rules on YouTube. The settlement, announced on September 2, 2025, follows a complaint that Disney failed to designate certain YouTube videos as being made for children, allowing them to be targeted with online advertising [2].

The FTC's complaint alleges that Disney made an administrative error in categorizing videos uploaded to YouTube during the pandemic. This misclassification allowed YouTube to collect personal information and place targeted advertisements on child-directed videos on Disney's behalf [1]. The videos in question include storytime content featuring celebrities reading to children.

Under the settlement, Disney will establish an "Audience Designation" program to ensure the correct categorization of videos before uploading. The program aims to formalize the review process and strengthen Disney's compliance with the Children's Online Privacy Protection Act (COPPA) [3].

This settlement is notable as it is the first known case in which a YouTube content provider has settled with the FTC over children's privacy violations since the agency's landmark settlement with YouTube and its parent company, Google, in 2019 [2]. The fine targets Disney for content that wasn't uploaded to its own platforms, potentially opening the door to penalties against other content providers that distribute their work on other sites and apps.

The settlement highlights the ongoing challenges of enforcing children's privacy laws in the digital age. It underscores the regulatory scrutiny facing major tech and media companies over their handling of children's data. Disney's settlement comes in the wake of similar cases in the tech industry, including Meta Platforms Inc. and OpenAI [2].

Disney's settlement also comes on the heels of its Q3 2025 results, which saw a slight revenue miss and a subsequent drop in its stock price. However, the company reported robust cash flow performance, with quarterly operating cash flow climbing 41% year-over-year to $3.7 billion and free cash flow increasing 52.7% to $1.9 billion [2].

References:

[1] https://variety.com/2025/digital/news/disney-pay-10-million-collecting-children-data-1236505102/
[2] https://www.benzinga.com/news/legal/25/09/47466327/disney-to-pay-10-million-in-ftc-settlement-over-youtube-childrens-privacy-breach
[3] https://www.axios.com/2025/09/02/disney-ftc-settlement-lawsuit-youtube-video-children-privacy