WASHINGTON, D.C. — The Federal Trade Commission (FTC) announced a series of enforcement actions and regulatory updates last week addressing violations involving privacy protections, deceptive marketing practices, online safety, and worker rights. The measures involve settlements, penalties, and proposed consent orders affecting multiple companies and industries.
Disney to Pay $10 Million for Alleged COPPA Violations
The FTC and the Department of Justice filed a complaint alleging that Disney Worldwide Services, Inc. and Disney Entertainment Operations LLC violated the Children’s Online Privacy Protection Act (COPPA) by failing to properly designate certain YouTube videos as “Made for Kids.” The complaint states that the mislabeling allowed personal data from viewers under the age of 13 to be collected without parental consent.
Under the proposed settlement, Disney will:
- Pay a $10 million civil penalty.
- Notify parents before collecting data from children under 13 and obtain verifiable parental consent.
- Establish a program to review whether videos should be labeled as “Made for Kids” unless YouTube implements universal age-assurance technology.
FTC Action Against Apitor Technology Over Location Data Collection
The FTC filed a complaint against Apitor Technology, a robot toy manufacturer, alleging the company allowed a third-party developer in China to collect geolocation data from children using its companion app without parental consent.
Under a proposed order, Apitor must:
- Delete improperly collected data unless parents provide consent.
- Obtain verifiable parental approval before collecting information from children under 13.
- Ensure third-party software complies with COPPA requirements.
The order imposes a $500,000 penalty, suspended based on Apitor’s financial condition but enforceable if the company misrepresents its ability to pay.
FTC Publishes Proposed 2026 Budget for Horseracing Integrity and Safety Authority
The FTC published the Horseracing Integrity and Safety Authority’s proposed 2026 budget in the Federal Register for public comment. Stakeholders have 14 days to submit feedback before the Commission votes to approve or disapprove the proposed budget.
Pornhub Parent Company Aylo to Pay $5 Million Over CSAM and NCM Content
The FTC and the state of Utah filed a complaint against Aylo, formerly known as MindGeek and operator of Pornhub, YouPorn, and RedTube, alleging the company failed to prevent the distribution of child sexual abuse material (CSAM) and nonconsensual sexual content (NCM) despite representing that such material was prohibited.
Under the proposed order, Aylo must:
- Pay a $5 million penalty to Utah, with an additional $10 million suspended pending compliance.
- Implement systems to prevent CSAM and NCM uploads.
- Verify the age and consent of individuals in all posted videos.
- Establish a comprehensive privacy and security program to protect user data.
IM Mastery Academy Defendants to Pay $10.5 Million in Settlement
Two individuals associated with IM Mastery Academy, Alex Morton and Brandon Boyd, agreed to settlements totaling $10.5 million to resolve allegations by the FTC and the Nevada Attorney General that they used false or misleading earnings claims to promote investment training programs and a multi-level marketing business model.
The settlements permanently bar both individuals from:
- Participating in multi-level marketing schemes involving trading or investment training.
- Making unsubstantiated claims regarding potential earnings.
- Misrepresenting profits or returns connected to financial services or training programs.
FTC Orders Gateway Services to Eliminate Noncompete Agreements
The FTC filed a complaint against Gateway Services, Inc., the nation’s largest pet cremation company, alleging that its noncompete agreements for nearly 1,800 employees were anticompetitive and restricted workers’ mobility.
Under the proposed consent order, Gateway must:
- End enforcement of existing noncompete agreements.
- Notify affected employees that they are no longer bound by such restrictions.
- Limit future agreements to legally permissible exceptions based on role-specific circumstances.
FTC Ends Appeals Over Vacated Noncompete Rule
The FTC voted 3-1 to dismiss its appeals in two cases challenging a federal district court decision vacating the Noncompete Clause Rule. The Commission accepted the ruling, which found that the FTC lacked statutory authority to issue the rule under its current mandate.
Temu Fined $2 Million for INFORM Act Violations
Whaleco, Inc., operator of the online marketplace Temu, agreed to pay a $2 million penalty to settle allegations that it violated the INFORM Consumers Act of 2023 by failing to provide consumers with clear reporting mechanisms and seller identification tools required under federal law.
Under the proposed consent order, Temu must:
- Implement accessible reporting systems for suspicious activity across all platforms.
- Clearly disclose required identifying information for high-volume third-party sellers.
- Ensure compliance across both standard and gamified shopping experiences.
Comprehensive Enforcement Effort
The FTC’s latest actions highlight a broad strategy to strengthen consumer protections, enforce online privacy regulations, and address anticompetitive practices across multiple sectors. The measures include significant financial penalties, mandatory compliance programs, and increased oversight designed to safeguard data privacy, promote marketplace transparency, and uphold federal consumer protection laws.
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