One of the largest settlements ever: TikTok to pay $400 million for violating children's privacy
TikTok has agreed to pay $400 million to the US government to settle a lawsuit claiming that the platform violated the privacy of children. This is one of the largest financial settlements ever on the subject.
TikTok has agreed to pay $400 million to the US government to settle a lawsuit claiming that the platform violated the privacy of the children using it. This is one of the largest financial settlements ever on the subject. This is according to a report by the BBC.
The agreement stems from a lawsuit filed by the US Department of Justice in 2024, during the presidency of Joe Biden, which alleged that TikTok and its parent company ByteDance collected "massive amounts of data" on millions of users under the age of 13. The data collection violated the Children's Online Privacy Protection Act (COPPA), a federal law enacted in 2000, under which dozens of US states are now suing Meta.
"Children and parents are better protected today than they were when this lawsuit was filed," said Assistant Attorney General Bert Schumeit.
Other companies that have paid fines to the US government for violating the law include Google's YouTube, which paid $170 million in 2019, and Epic, which paid $275 million in 2022. Meta, for its part, is currently facing fines that could total hundreds of billions of dollars following violations of the law for which it is being accused by attorneys general from 29 US states. A trial in this case began this week, with the parent company of Instagram and Facebook accused of intentionally targeting minor users and profiting from them.
While the lawsuit against TikTok predated the separation of the company's US operations from the original company based in China last year, the current agreement concerns only TikTok's operations in China. ByteDance, which is a private company, was recently valued by investors at approximately $550 billion.
Under the terms of the agreement, TikTok and ByteDance will immediately pay the Department of Justice $300 million. An additional $100 million will be paid when the administration cancels a 2019 order signed with the Federal Trade Commission (FTC). As part of that same previous agreement, the company that preceded ByteDance, Musical.ly, was required to pay a fine of $5.7 million for violations of the law and to ensure that it sought parental consent for every user under the age of 13.
The Department of Justice did not detail any further steps against TikTok beyond the fine, but noted that since the lawsuit was filed, the platform has undergone "significant changes," including in its ownership structure, privacy policy, and control measures for young users.
At the time the lawsuit was filed, US attorneys argued that more than 170 million teenagers used TikTok and that the application is "child-oriented" but does not effectively verify the age of users and does not request parental consent for minor users. In 2024, former president Joe Biden pushed to ban TikTok from operating in the US, or alternatively to force the company to sell its US operations. President Donald Trump, in turn, supported the sale process, which was indeed carried out last year. Today, the company's US operations are 81% owned by a consortium of investors, while ByteDance holds the remaining 19%.
