The U.S. Department of Justice has reached an agreement with the Walt Disney Company that will see the entertainment giant pay $10 million to settle a privacy-related investigation over its YouTube channels.
In a press release issued on Tuesday, Justice Department officials said the original probe focused on whether content uploaded to YouTube violated the Children’s Online Privacy Protection Act (COPPA) by improperly collecting and using data of streamers under the age of 13 years old.
In a complaint filed in California, federal prosecutors alleged Disney “improperly failed to designate YouTube video content as directed toward children,” as the platform allows through various tools when the material is uploaded.
“As a result, Disney, and others acting on Disney’s behalf, targeted advertising toward children on YouTube and unlawfully collected children’s information without parental notice and consent, in violation of COPPA,” Justice Department officials said.
The DOJ pointed out that Disney’s intellectual property is popular with children, and that its YouTube channels attract “billions of views in the United States alone.” YouTube is the largest video sharing platform in the U.S., accounting for 13 percent of time spent with television on a monthly basis, according to Nielsen.
The $10 million penalty will allow Disney to avoid further punishment in that specific case, and doesn’t require the company to admit any wrongdoing. But it does require Disney to comply with COPPA in future activity that involves YouTube, and threatens additional penalties against the company if violations are alleged and sustained in the near future.
Future violations could cost Disney even more money, as federal lawmakers are working to amend COPPA in a way that expands the covered class of streaming users to 17 years old.
Disney is one of several companies that have settled COPPA-related lawsuits with the Justice Department under the past few administrations. In 2019, Google and YouTube paid $170 million to settle a COPPA-related lawsuit brought by jointly by the Trump administration’s DOJ during his first term in office and the New York state attorney general’s office. Several years later, Microsoft settled a similar lawsuit for $20 million over allegations related to its Xbox gaming console.
