TikTok has agreed to pay $400m (£293m) to the US to settle a lawsuit alleging its platform violated children's privacy. The deal marks one of the largest-ever settlements over the issue.
TikTok Settles US Lawsuit Over Child Privacy
The settlement stems from a 2024 suit by the Department of Justice, under former President Joe Biden, alleging that TikTok and its parent company, ByteDance, collected "vast amounts of data" on millions of users under the age of 13. This was against the Children's Online Privacy Protection Act (COPPA), a federal law enacted in 2000.
Assistant Attorney General Brett Shumate said, "Children and parents are better protected today than they were when this case began." The settlement only involves TikTok's operations in China, not its US business.
Other Companies Have Faced COPPA Penalties
Other companies that have paid penalties to the US government for COPPA violations include Google's YouTube, which paid $170m in 2019, and Epic Games, which paid $275m in 2022. Meta is also now facing penalties that could exceed hundreds of billions of dollars stemming from COPPA violations alleged by attorneys general of 29 US states.
TikTok's Immediate Payment and Future Changes
Under the terms of the deal, TikTok and ByteDance will immediately pay the DOJ $300m. It will pay another $100m when the government vacates a 2019 consent decree with the Federal Trade Commission. As part of the agreement, the predecessor to ByteDance, Musical.ly, was required to pay a $5.7m fine for COPPA violations and ensure it sought parental consent for any user aged under 13.
A Significant Shift in TikTok's Ownership and Operations
Its US operations are now 81% owned by a consortium of investors, while ByteDance maintains a 19% stake. The Justice Department did not detail any action against TikTok on Friday beyond the fine. But the department noted that since it sued the platform, TikTok has "undergone significant changes," including to its ownership, privacy practices, and platform controls for young users.
What Happens Next
The settlement marks a significant step in protecting children's online privacy in the US. However, it remains to be seen how TikTok will implement the changes required by the agreement. With the company's US operations now majority-owned by a consortium of investors, it will be interesting to see how this new ownership structure will affect the company's future.
Source: Joy Online
