A federal court has approved a $10 million settlement requiring The Walt Disney Company to pay a civil penalty and overhaul how it labels videos aimed at children on YouTube — the Justice Department said Tuesday.
The settlement resolves allegations that Disney failed to properly mark dozens of videos as "made for kids," a lapse the government says allowed YouTube to collect children’s personal information and serve targeted ads without parental consent in violation of the Children’s Online Privacy Protection Act (COPPA). The Justice Department filed the complaint with the Federal Trade Commission and secured the court order in California. You can read the department’s announcement here: Department of Justice press release.
What regulators say happened
According to the complaint, Disney uploaded content to more than 1,250 YouTube channels between 2020 and 2022 — a period when viewership for some of the videos surged during the early months of the COVID-19 pandemic. YouTube requires creators to designate uploaded material as either "Made for Kids" (MFK) or "Not Made for Kids" (NMFK) after Google’s 2019 settlement with regulators. The FTC and DOJ say Disney often left channels or videos designated NMFK even when the material was clearly aimed at children.
YouTube reportedly changed the designation on more than 300 Disney videos to MFK in mid-2020, yet Disney continued using broad, channel-level settings rather than marking child-directed content individually. The government flagged examples including clips tied to Frozen, Toy Story, The Incredibles, Inside Out, Finding Dory and other family titles. The complaint also points to inconsistent labeling across similar channels — for instance, a Pixar channel marked NMFK while a related Pixar Cars channel was flagged MFK — which prosecutors say underscores systemic misclassification.
Assistant Attorney General Brett A. Shumate of the Justice Department’s Civil Division framed the order as protecting parental choice: "The Justice Department is firmly devoted to ensuring parents have a say in how their children's information is collected and used," he said in the department’s statement.
Terms and limits of the settlement
The civil penalty totals $10 million and the court’s order requires Disney to create and maintain a compliance program to ensure future adherence to COPPA when distributing content on third-party platforms like YouTube. Importantly, Disney has said the settlement is limited to distribution of some content on YouTube and does not apply to Disney-owned and operated digital properties.
Disney previously reached a separate agreement with the FTC that was disclosed in September; Tuesday’s announcement reflects the DOJ’s filing and the court’s formal approval of the remedy.
Why this matters beyond the check
COPPA — first passed in 1998 and updated several times since — bars targeted advertising and the collection of certain personal data from children under 13 without parental notice and consent. The YouTube labeling system was introduced after regulators pressed Google to better police creators' behavior; mislabeling can have large privacy and commercial consequences because it changes whether personalized ads or tracking tools are allowed.
Enforcement has not been limited to Disney. Microsoft paid $20 million in 2023 over Xbox signup practices, and the FTC has eyed other platforms for potential violations. These actions highlight a growing regulatory focus on how mainstream entertainment and tech companies handle children’s data as social and streaming habits shift online.
Privacy debates around consumer tech — from smartglasses to connected toys — are part of the same conversation about data collection and user safeguards. That broader tension is evident in other industry rows involving content distribution and platform partnerships; for background on recent Disney–Google distribution friction, see this piece on how the companies have clashed over digital services and licensing [/news/google-pulls-movies-anywhere-support]. Concerns about device and service privacy more widely are also in the spotlight, whether in wearables or advertising-driven products [/news/meta-ray-ban-ecosystem-update].
Disney’s response
When the initial settlement was disclosed, a Disney spokesperson emphasized that the agreement relates only to content distributed on YouTube, not Disney’s own platforms, and stressed the company’s commitment to kids’ safety and privacy. The company did not provide additional comment to reporters on Tuesday beyond the earlier statements.
For parents and educators, the episode is a reminder to check how videos and apps describe their audience and whether they collect data. For companies, it reinforces that platform-level shortcuts — for example, blanket channel settings that don’t reflect the actual audience of individual uploads — can carry legal and financial risk.
Regulators appear likely to keep scrutiny on how major media companies label and monetize content for young audiences. The settlement puts a price on noncompliance and requires processes intended to prevent recurrence, but it also raises questions about how platforms, studios and creators share responsibility for protecting children online.