Social media platform TikTok has agreed to pay $400 million to the US government to settle a lawsuit alleging violations of children’s personal data privacy. This marks one of the largest financial settlements in the US regarding breaches of laws designed to protect children’s privacy.
The US Department of Justice filed the lawsuit against TikTok and its parent company, ByteDance, in 2024 during the administration of then-President Joe Biden.
The lawsuit alleged that TikTok collected vast amounts of personal data from millions of children under the age of 13. US law mandates that parental consent be obtained before collecting personal data from children under 13.
The legislation, known as the Children’s Privacy Protection Act, was enacted in 2000. It plays a crucial role in safeguarding children’s online privacy. Several US states are currently also suing Meta for alleged violations of this law.
US Assistant Attorney General Brett Shumate stated, “Children and parents are better protected now than when this case began.”
Other technology companies have previously paid substantial sums for violating the same law. YouTube was fined $170 million in 2019, and Epic Games was fined $275 million in 2022.
Details of the $400 Million Settlement
Under the terms of the settlement, TikTok and ByteDance will immediately pay $300 million to the US Department of Justice.
Additionally, they are required to pay another $100 million following the termination of a 2019 legal settlement with the US Federal Trade Commission. The total amount comes to $400 million.
Under that 2019 settlement, Musical.ly—the predecessor to ByteDance—had been fined $5.7 million for violating child privacy laws.
It was also ordered to implement a system requiring parental consent for any user under the age of 13 wishing to use the app.
In its announcement on Friday, the US Department of Justice did not mention any new punitive measures against TikTok beyond the fine.
However, the department noted that significant changes have taken place at TikTok since the lawsuit was filed. These measures include changes to the company’s ownership structure, user privacy policies, and control mechanisms for young users.
Allegations regarding data collection from children
At the time the lawsuit was filed, US government lawyers stated that TikTok had over 170 million teenage users. It was alleged that the app was immensely popular among children and specifically targeted them.
However, it was alleged that user ages were not effectively verified, and the necessary parental consent was not obtained for users under the age of 13.
US authorities alleged that this failure created opportunities to collect personal data from children.
Changes in ownership
The process of separating TikTok’s US operations from ByteDance’s Chinese operations began last year. The current settlement primarily relates to TikTok’s operations involving China.
According to the latest investment valuation of the privately held company ByteDance, its market value stands at approximately $550 billion.
In 2024, former President Joe Biden pushed for either a ban on TikTok or the separation of its US business from ByteDance.
Subsequently, President Donald Trump also supported separating TikTok’s US operations from ByteDance. That change in ownership was implemented last year.
Currently, an investor consortium holds 81% ownership of TikTok’s US business, while ByteDance retains the remaining 19%.
Lawsuit against Meta as well
Twenty-nine US states have also filed a lawsuit against Meta under the same laws regarding the protection of children’s privacy. They allege that Meta profited commercially by targeting children through Facebook and Instagram.
The trial for this case also began this week. If the allegations are proven, Meta could face massive fines.
In recent times, a series of legal actions have been taken against technology companies in the US regarding the protection of children’s personal data. This $400 million settlement with TikTok is a major example of that trend.
Although the BBC contacted TikTok for comment on this matter, no representative from the company responded immediately.
