TikTok has reached a significant agreement to pay $400 million (£293 million) to the United States, concluding a legal battle regarding alleged violations of children’s privacy on its platform. This settlement is noted as one of the largest pertaining to such privacy issues.
The lawsuit, initiated in 2024 by the Department of Justice under the Biden administration, claimed that TikTok and its parent company ByteDance had amassed “vast amounts of data” from millions of users younger than 13, a practice deemed in violation of the Children’s Online Privacy Protection Act (COPPA) established in 2000. This law is the basis for ongoing lawsuits against Meta by various U.S. states.
Assistant Attorney General Brett Shumate remarked, “Children and parents are better protected today than they were when this case began.”
Other tech companies have faced penalties for COPPA infringements; for instance, YouTube paid $170 million in 2019, while Epic Games settled for $275 million in 2022. In contrast, Meta is now contending with potential penalties amounting to hundreds of billions due to similar alleged violations, with a jury trial ongoing concerning accusations of targeting child users for profit.
Although the TikTok lawsuit was filed before last year’s separation of its U.S. operations from those in China, the current settlement pertains only to the Chinese operations. ByteDance, which remains a privately-owned entity, was valued at $550 billion by investors recently.
As per the settlement terms, TikTok and ByteDance are to pay the Department of Justice $300 million upfront, with an additional $100 million due once the government terminates a 2019 consent decree with the Federal Trade Commission (FTC).
Previously, Musical.ly, the predecessor of ByteDance, had to pay a $5.7 million fine for COPPA breaches and was mandated to obtain parental consent for users under 13.
While the Justice Department did not announce any further actions against TikTok beyond the fine, it acknowledged significant changes within the platform since the lawsuit, including alterations to ownership, privacy measures, and controls for younger users.
When the case was filed, attorneys claimed that TikTok was engaging over 170 million teenagers and was aimed primarily at children. However, it allegedly failed to effectively verify user ages or secure parental consent for underage users.
In 2024, President Biden advocated for either a ban on TikTok or a divestment from the company’s U.S. operations, a stand supported previously by former President Donald Trump, leading to last year’s operational split. Currently, TikTok’s U.S. operations are 81% owned by a consortium of investors, while ByteDance retains a 19% ownership stake.
A representative for TikTok has yet to respond to requests for comment.
Editor’s Take
This settlement underscores an important shift in the landscape of digital privacy, particularly concerning children’s data. It signals increased scrutiny on social media platforms and highlights the ongoing challenge for tech companies in adhering to privacy regulations. For users and parents, this development could mean enhanced protections, as companies adjust their practices to comply with legal standards.
Source: www.bbc.co.uk
