Disney Faces Consequences: $3 Million Fine for Alleged Child Data Collection Violations

The magic kingdom faces a serious challenge to its reputation for family-friendly entertainment, as Disney has agreed to a substantial $3 million settlement with the Federal Trade Commission (FTC). The settlement addresses grave charges that the entertainment giant illegally collected personal information from children through its popular online games and applications without obtaining prior parental consent, a direct violation of the Children's Online Privacy Protection Act (COPPA).

This landmark agreement underscores the FTC's unwavering commitment to safeguarding children's online privacy and holds even major corporations accountable.

The core of the complaint centered on Disney's acquisition of Playdom, a social game developer. Post-acquisition, several Playdom-operated websites and apps continued to collect sensitive data from children under 13, including persistent identifiers, without the explicit permission of their parents.

This data collection, often hidden from view, allowed for tracking and other forms of online engagement without the necessary safeguards for young users.

Under the terms of the settlement, Disney is not only obligated to pay the hefty fine but must also implement significant changes to its data handling protocols.

Crucially, the company is required to delete all personal information previously collected from children through the offending Playdom properties. Beyond this, Disney must ensure strict compliance with COPPA across all its platforms moving forward, committing to regular, comprehensive privacy assessments of its data collection practices, particularly those targeting younger audiences.

The FTC's complaint highlighted specific examples where children were able to register for online games and activities by providing personal information, such as names and email addresses, without their parents being adequately informed or providing consent.

This type of data collection is precisely what COPPA was designed to prevent, ensuring that parents have control over what information is gathered from their children online.

While the civil penalty was initially set at $10 million, a credit of $7 million was applied due to previous COPPA-related settlements involving Playdom and another Disney subsidiary.

This adjustment brought the final cash penalty down to $3 million, a figure that still sends a powerful message to companies operating in the children's online space: privacy laws are to be taken seriously, and infractions will result in significant repercussions. This case serves as a stark reminder that even the most beloved brands are not exempt from scrutiny when it comes to protecting the youngest members of our digital society.