TikTok, ByteDance reach $400 million settlement with US Justice Dept.

TikTok and its parent company, ByteDance, reached a $400 million settlement with prosecutors to resolve allegations that the social media platform failed to comply with a federal law designed to protect children’s privacy, the U.S. Department of Justice announced. 

Big picture view:

On Friday, the Justice Department revealed the agreement that would put an end to its ongoing lawsuit that accuses TikTok, ByteDance, and affiliated companies of violating the Children’s Online Privacy Protection Act (COPPA) and failing to implement regulations to ensure the law is followed. 

TikTok agreed to pay $300 million now and the other $100 million once the order vacating a prior consent decree against TikTok’s predecessor, Musical.ly, is entered, according to the DOJ’s statement. Prosecutors pointed out that the settlement was one of the largest ever recovered in a COPPA case. 

RELATED: States seek $1.4 trillion -- yes, trillion -- from Meta over alleged harm to kids

What they're saying:

"This settlement is a major victory for American children and parents," said Associate Attorney General Stanley E. Woodward Jr. "The Department's priority is ensuring that children are protected online and that companies entrusted with their personal information meet their legal obligations. This resolution secures a substantial recovery while reinforcing the protections that families expect and deserve."

The backstory:

The 2024 lawsuit alleged that TikTok knowingly let children create accounts and kept their personal information without telling parents. Among the data collected were activities on the app that were used to build user profiles. The company was also accused of letting children create accounts without providing their age or getting parental approval, by using credentials from third-party services. 

The Justice Department noted that there has been no determination that TikTok or ByteDance was liable for any actions and indicated that the claims are still only allegations. 

Dig deeper:

The Justice Department noted in its statement that much has changed for TikTok and ByteDance in the two years since the lawsuit was filed. Notably, ByteDance entered into an agreement with Oracle, Silver Lake and MGX to manage a new TikTok U.S. joint venture that will also store U.S. user data locally. Prosecutors added that TikTok has also strengthened its safeguards, stepped up its age-related controls, and improved parental oversight.

 

Social MediaTechnology