TikTok to pay US$400 million settlement in US children's privacy case

WASHINGTON: TikTok and its Chinese parent company ByteDance on Friday (Aug 21) agreed to a US$400 million settlement to resolve the US Justice Department's allegations that the short-video app violated children's online privacy.

The Justice Department sued TikTok and ByteDance in 2024 for allegedly failing to protect children's privacy, and illegally collecting their information.

The defendants were accused of violating a law requiring online services aimed at children to obtain parental consent to collect personal information from users under age 13.

Associate Attorney General Stanley Woodward said the Justice Department's priority "is ensuring that children are protected online and that companies entrusted with their personal information meet their legal obligations."

TikTok did not immediately comment.

Under the settlement, TikTok will pay US$300 million immediately and an additional US$100 million upon entry of an order vacating a prior consent decree entered with the Federal Trade Commission in 2019 against TikTok’s predecessor, Musical.ly.

As part of the consent agreement, the FTC said that TikTok, then known as Musical.ly, had known that young children used the app and had failed to get parental consent to collect their names, email addresses and other personal information. It paid a fine of US$5.7 million.

In January, ByteDance agreed to establish a majority American-owned joint venture to secure US data and avoid a US ban on the app used by more than 200 million Americans.

The government noted that since the complaint was filed, TikTok has undergone significant changes to its ownership, management, compliance functions, and privacy practices.

DOJ said the settlement "ensures that American families continue to benefit from stronger protections without the delay and uncertainty of protracted litigation."

The TikTok US joint venture said in a court filing it requires all users to enter their date of birth to use the site. TikTok said it has developed sophisticated age-moderation systems that identify children under 13 who misrepresented their age.

That court filing said that TikTok has hundreds of personnel trained in underage moderation and as a result deletes tens of thousands of underage accounts.