TikTok to Pay $400M in Landmark US Child Privacy Settlement

The Justice Department sued TikTok, and ByteDance in 2024, accusing them of failing to protect childrens privacy, and collecting their personal information without proper consent. The case involved a law requiring online services for children to get parental permission before collecting data from users under 13.

The settlement comes from a 2024 lawsuit filed by the Justice Department under former President Joe Biden. The government alleged that TikTok and ByteDance collected large amounts of data from million's of users under 13.

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The alleged actions violated the Children's Online Privacy Protection Act (COPPA), a federal law passed in 2000 that protects children's personal information online.

"Children and parents are better protected today than they were when this case began," Assistant Attorney General Brett Shumate said.

Other companies have also faced COPPA penalties. YouTube paid $170 million in 2019, while Epic Games paid $275 million in 2022.

Meta is also facing a lawsuit from attorneys general in 29 U.S. states over alleged COPPA violations. The company is accused of targeting children and profiting from them.

The TikTok lawsuit began before the company's U.S. operations were separated from its original China-based business last year. The settlement applies to TikTok and ByteDance's China operations.

ByteDance, a privately held company, was most recently valued by investors at $550 billion. Under the agreement, TikTok and ByteDance will pay the Justice Department $300 million immediately and another $100 million if the government ends a 2019 agreement with the Federal Trade Commission.

As part of the agreement, TikTok's predecessor Musical.ly was required to pay a $5.7 million fine for COPPA violations.

The Justice Department did not provide details of any other action against TikTok beyond the settlement. It said the platform has made significant changes since the lawsuit, including changes to its ownership, privacy practices, and controls for younger users.

When the lawsuit was filed, the U.S. government said TikTok had more than 170 million users in the U.S., including many children and teens, and alleged that the platform was directed to children. It also accused TikTok of having weak age-checking systems and failing to get parental consent for underage users.

In 2024, the Biden administration pushed for TikTok to be banned or for its U.S. operations to be sold. The Trump administration later supported the sale, which was completed last year.

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