The Walt Disney Company will pay $10m (£7.4m) to resolve claims that it broke children's privacy laws by failing to label some YouTube videos as made for children, allowing for targeted advertising.

Disney had agreed to a settlement with the US Federal Trade Commission in September to resolve an inquiry into its collection of children's personal data.

The FTC had argued that, as a result of Disney's alleged failure to properly label children's videos, kids received targeted advertising and had their data collected without parental notice and consent.

The entertainment giant also agreed to create a program to comply with children's data protection laws, the US Department of Justice said on Tuesday.

"The Justice Department is firmly devoted to ensuring parents have a say in how their children's information is collected and used," Brett Shumate, an assistant attorney general in the justice department's civil division, said in a statement announcing the federal court order.

A Disney spokesperson confirmed that the company has agreed to the terms initially announced in September.

The company had previously noted that the settlement is limited to the distribution of some of its content on YouTube and does not involve Disney-owned and operated digital platforms.

The agreement with regulators involves Disney Worldwide Services Inc and Disney Entertainment Operations LLC.

Following a 2019 settlement between the FTC and YouTube's parent company Google, YouTube started requiring content creators to place labels on uploaded videos that were directed toward kids.

The rule was intended to avoid targeted advertising and personal data collection on kids' content, which is banned under the 1998 Children's Online Privacy Protection Act (COPPA).