The Walt Disney Company (NYSE:DIS) has agreed to a $10 million settlement with the Federal Trade Commission (FTC) over a lawsuit concerning children’s privacy violations on YouTube.
Disney Settles FTC Case Over Children’s Privacy Rules
Disney’s settlement with the FTC is the first known instance of a YouTube content provider resolving a children’s privacy violation case with the FTC since the agency’s 2019 settlement with YouTube and its parent company, Google (NASDAQ:GOOGL) (NASDAQ:GOOG), reported Axios.
Check out the current price of DIS stock here
The FTC's complaint claims that Disney "failed to designate certain YouTube videos as being made for children," which allowed those videos to be targeted with online advertising. The agency argues that this misclassification violates the 1998 Children's Online Privacy Protection Act (COPPA).
Disney has admitted to an administrative error in the way it categorized videos uploaded to YouTube during the pandemic. As part of the settlement, Disney will establish an “Audience Designation” program to ensure the correct categorization of videos before uploading.
Regulators Tighten Grip On Child Privacy In Tech Age
The settlement highlights the ongoing challenges of enforcing children’s privacy laws in the digital age. The FTC’s actions against Disney also underscore 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. Meta Platforms Inc. (NASDAQ:META) faced congressional scrutiny over leaked AI policies that allowed chatbots to engage children in “romantic or sensual” conversations, while OpenAI was sued for its chatbot’s role in a teenager’s suicide.
Robust Cash Flow Offsets Disney's Revenue Miss
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.
Benzinga's Edge Rankings place Disney in the 72nd percentile for momentum and the 87th percentile for growth, reflecting its strong performance in both areas. Check the detailed report here.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
