TikTok and ByteDance agree to $400 million settlement over children’s privacy violations

TikTok, ByteDance and affiliated entities agreed on Friday to pay $400 million to settle litigation over compliance with the Children’s Online Privacy Protection Act, the Justice Department announced. Three hundred million is payable immediately.

The remaining $100 million turns on a court entering an order vacating a prior consent decree against Musical.ly, the app ByteDance acquired in 2017 and folded into TikTok. The figure is considered by the department to be one of the biggest recoveries in a COPPA case.

This settlement is a major victory for American children and parents.

– Associate Attorney General Stanley E. Woodward Jr.

The 2019 children’s privacy order failed to prevent new violations

That decree followed a $5.7 million penalty the FTC obtained in February 2019, then the largest civil penalty in a children’s privacy case. It required the company to obtain parental consent for users under 13 and to remove videos posted by them.

The US DOJ and the FTC filed a lawsuit against ByteDance in the Californian federal court in August 2024, stating that ByteDance knowingly allowed kids younger than 13 to sign up for regular accounts where they were able to post and interact with adults, collecting their personal data without informing their parents and ignoring parental deletion requests.

The complaint further noted how the company changed its registration process to make identification of underage users more difficult, and kept data useful for targeted advertisements despite the objections of its staff. Government lawyers said more than 170 million teenagers were on the platform.

DOJ points to TikTok’s ownership and compliance changes

The department’s statement leans on what has changed since it filed. TikTok has undergone significant changes to its ownership, management, compliance functions and privacy practices, it said, and has implemented measures strengthening safeguards for younger users, age controls and parental oversight.

Those developments materially advanced the public interests behind the litigation, according to the release. The restructuring moved TikTok’s US operations into a joint venture controlled by Oracle, Silver Lake and MGX, with ByteDance retaining 19.9%. DOJ did not detail conduct requirements beyond the payment, and has not said what the money will be used for.

AFP reported that ABC News found in May the administration was weighing directing settlement funds toward beautification projects, among them resurfacing the Lincoln Memorial Reflecting Pool.

Senators want answers over a safety feature withheld from users

According to reports, which were based on an internal document, TikTok modified its algorithm in 2021 in order to ensure users don’t get flooded with the same harmful content again and again, and also withheld it from 10% of their users in the United States, which was a control group consisting of about 15 million users, to test whether the safer version reduced engagement.

Among them was Chase Nasca, a 16-year-old placed in the group in January 2022 who died by suicide the following month. Senators Marsha Blackburn and Richard Blumenthal, co-authors of the Kids Online Safety Act, wrote to chief executive Shou Chew and US spinoff head Adam Presser on Wednesday, per Fortune, saying the company withheld a critical safety measure “in order to determine whether protecting users would impact its financial bottom-line.”

The senators are seeking 13 answers by September 1, among them the reason for leaving minors in the control group and a list of all US experiments where a safety feature has been withheld.

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