TikTok and its parent company ByteDance have agreed to pay $400 million to the US government to resolve allegations that the social media platform violated federal children’s privacy laws.
The settlement stems from a lawsuit filed by the US Department of Justice in 2024 under former President Joe Biden. The government alleged that TikTok collected large amounts of personal information from millions of users under the age of 13 without obtaining the parental consent required under the Children’s Online Privacy Protection Act (COPPA).
The agreement ranks among the largest US settlements involving children’s online privacy.
TikTok to Make $400 Million in Payments
Under the settlement, TikTok and ByteDance will immediately pay $300 million to the Department of Justice. A further $100 million will be paid when the government vacates a 2019 consent decree involving the Federal Trade Commission.
The earlier FTC case involved Musical.ly, the short-video service that was acquired by ByteDance and later became part of TikTok. Musical.ly had previously agreed to pay a $5.7 million penalty over alleged COPPA violations and to obtain parental consent for users under 13.
US Alleged TikTok Failed to Protect Children
The 2024 lawsuit alleged that TikTok did not effectively determine the ages of its users or obtain parental permission when required. US attorneys said at the time that the platform had more than 170 million teenage users and alleged that TikTok was directed toward children while failing to adequately protect underage users’ personal information.
COPPA, enacted in 2000, places requirements on online services that collect personal information from children under 13, including obligations concerning parental consent and data practices. Assistant Attorney General Brett Shumate said the settlement means children and parents are better protected than when the case began.
TikTok Has Undergone Changes Since Lawsuit
The Justice Department said TikTok has undergone significant changes since the lawsuit was filed, including changes involving its ownership structure, privacy practices and controls designed for younger users. The settlement follows major changes to TikTok’s US business.
TikTok’s US operations were separated from the company’s original China-based structure last year. Under the current ownership arrangement, a consortium of investors holds an 81% stake in the US operations, while ByteDance retains 19%. ByteDance was most recently valued by investors at approximately $550 billion, according to Reuters.
TikTok follows other major child privacy penalties
TikTok’s settlement is larger than several previous federal penalties involving children’s online privacy. Google’s YouTube agreed to pay $170 million in 2019 to settle allegations that it violated COPPA. Epic Games agreed to a $275 million penalty in 2022 in a separate case involving children’s privacy.
Meta is also facing a major legal challenge over alleged violations of children’s privacy. Attorneys general from 29 US states have accused Meta of targeting children and profiting from their engagement with Facebook and Instagram.
The $400 million Tiktok agreement closes the US government’s lawsuit over the alleged conduct covered by the settlement. It also highlights the increasing financial and regulatory risks facing social media companies over how they collect, process and use children’s data.
