TikTok to pay $400m to US in one of largest child privacy settlements

TikTok has reached a landmark agreement to pay $400 million to the United States to resolve a long-running lawsuit alleging violations of child privacy laws. The settlement marks one of the largest ever made under the Children’s Online Privacy Protection Act (COPPA). The deal comes after a 2024 lawsuit initiated by the U.S. Department of Justice under former President Joe Biden, which claimed that TikTok and its parent company, ByteDance, had collected vast amounts of data from users under the age of 13, violating COPPA. The lawsuit alleges that TikTok failed to properly verify the ages of its users and obtained parental consent for minors, both of which are required under COPPA. The act, enacted in 2000, aims to protect children online by requiring websites and apps to obtain parental permission before collecting personal information from users under 13. The case against TikTok echoes similar lawsuits against other major tech companies, including Meta and Google, which have faced substantial fines for similar violations. According to the agreement, TikTok and ByteDance will pay $300 million immediately to the Department of Justice. An additional $100 million will be paid once the government vacates a 2019 consent decree with the Federal Trade Commission. The settlement includes provisions ensuring that the predecessor company, Musical.ly, pays a $5.7 million fine and implements measures to secure parental consent for users under 13. The Department of Justice stated that TikTok has undergone significant changes since the lawsuit began, including shifts in ownership structure and improvements to privacy policies and controls for young users. The case dates back to 2024, when the U.S. government filed charges against TikTok for allegedly targeting child users and profiting from their activity. At the time, officials estimated that over 170 million teenagers used the app, and that the platform was “directed to children.” However, the app lacked effective mechanisms to determine user age or obtain necessary parental consent. The lawsuit also highlighted concerns over how TikTok handled user data, particularly in relation to minors. The legal battle took place during a period of heightened scrutiny of Chinese-owned platforms in the U.S. In 2024, former President Biden advocated for banning TikTok or forcing the company to divest its U.S. operations. This led to a policy shift under President Donald Trump, who supported the divestment, resulting in the separation of TikTok’s U.S. business from its Chinese headquarters in late 2023. Currently, TikTok’s U.S. operations are 81% owned by a group of investors, with ByteDance retaining a 19% stake. Despite the large financial penalty, the Department of Justice did not announce any further actions against TikTok beyond the fine. The agency noted that the company has implemented notable changes in its privacy practices and platform management, although specific details remain undisclosed. A representative from TikTok was unavailable to comment on the matter when contacted by the BBC. Meanwhile, Meta continues to face potential penalties exceeding hundreds of billions of dollars due to allegations of COPPA violations by state attorneys general across 29 U.S. states. A jury trial related to these claims is currently underway, with the social media giant accused of exploiting child users for commercial gain. As the legal landscape around digital privacy evolves, cases like TikTok’s underscore the ongoing challenges of protecting minors in the digital space.