Disney Faces Landmark $3 Million FTC Fine Over Children's Data Privacy Violations

In a significant move reinforcing online child privacy, entertainment giant Disney and its subsidiary Playdom Inc. have agreed to pay a substantial $3 million civil penalty. This comes after allegations by the Federal Trade Commission (FTC) that the companies violated the Children’s Online Privacy Protection Act (COPPA) by improperly collecting personal information from children without first notifying parents and obtaining their verifiable consent.

The settlement marks a notable first for Disney, as it is the inaugural instance where the global company has been penalized for transgressions of COPPA.

This penalty stands as the second-largest ever imposed by the FTC for COPPA violations, signaling a robust commitment from regulators to safeguard the digital lives of minors. The largest fine to date, a $10 million penalty, was levied against Tapjoy in 2013 for similar infractions, underscoring a consistent pattern of enforcement by the FTC.

The core of the FTC's complaint against Disney and Playdom centered on several popular mobile applications.

Specifically, apps like 'Where's My Water?' and 'Club Penguin Island' were identified as platforms where Playdom allegedly collected persistent identifiers – data crucial for tracking online activity – from young users. Crucially, these collections were reportedly conducted without the requisite direct notification to parents and without securing their explicit, verifiable consent, a fundamental requirement under COPPA.

This case serves as a stark reminder to all online service providers and app developers targeting children: strict adherence to privacy regulations like COPPA is not merely optional.

The FTC's action against a company as prominent as Disney sends a clear message that child protection online remains a top priority, and companies, regardless of their stature, will be held accountable for maintaining the digital safety and privacy of their youngest users.