TikTok agrees to $400 million US settlement over children's privacy violations

Terms of the settlement

The US Department of Justice reached an agreement requiring TikTok to pay up to $400 million to resolve a federal lawsuit over children's online privacy violations. Under the terms filed in court, the company will deliver an immediate payment of $300 million. An additional $100 million payout depends on a court vacating a 2019 consent order that had regulated the platform's privacy practices following a $5.7 million Federal Trade Commission settlement with predecessor application Musical.ly. The court filing indicates that the case against TikTok and ByteDance will be dismissed with prejudice, meaning the government cannot refile the same action. The company did not admit liability under the settlement agreement.

Allegations under federal child privacy laws

The agreement resolves a lawsuit filed in August 2024 by the Justice Department and the FTC under the Children's Online Privacy Protection Act. The statute requires online platforms directed at children to obtain parental consent before collecting personal data from individuals under 13 years of age. Regulators alleged that TikTok knowingly permitted millions of underage children to register accounts and gathered their personal information without parental notification or consent. The complaint asserted that data collection occurred even on accounts created within the platform's restricted Kids Mode. Regulators also stated that TikTok ignored requests from parents to delete their children's accounts and data, while enabling underage users to view adult content and interact with adult users.

Corporate restructuring and compliance reforms

The settlement follows structural changes made to TikTok's corporate ownership and compliance programs. When the complaint was filed in 2024, the platform was owned by Beijing-based ByteDance. In January, ByteDance transferred majority control of its US operations to a joint venture dominated by American investors to comply with congressional legislation that threatened to ban the app from its 200 million American users. ByteDance retained an equity stake of slightly below 20% in the new corporate structure, intended to address federal concerns regarding data protection and foreign influence.

TikTok has undergone significant changes in its ownership, its management, its compliance procedures, and its practices in terms of privacy.

The Justice Department noted that the company subsequently introduced revised compliance procedures, including measures to reinforce safety guardrails for minors and improve parental control settings.

Scrutiny in Europe and adolescent mental health suits

TikTok remains subject to legal challenges outside the federal privacy settlement. At the end of July, the European Commission accused the platform of failing to fulfill its obligations to protect underage users. European authorities criticized the app's default privacy settings for adolescents, arguing they offered inadequate defenses against cyberbullying and exposure to predators. In the United States, TikTok faces ongoing multi-state litigation alongside Meta, Snapchat, and YouTube. That separate legal challenge, organized by a coalition of US states, local school districts, and families, accuses social platforms of degrading the mental health of children and teenagers.