The Justice Department's $400 million settlement with TikTok to resolve allegations of child privacy violations has drawn criticism from legal experts and online safety advocates, who describe the terms as unusually lenient and lacking transparency. The settlement, announced on a Friday afternoon in late August, resolves claims that TikTok violated federal law by collecting data from children under 13. The deal also includes the vacation of a 2019 consent order that mandated strict monitoring of TikTok's data practices.
Sources familiar with similar negotiations expressed surprise at the settlement's terms. Bill Kovacic, a former Federal Trade Commission chairman, noted that such resolutions typically involve a formal process with detailed explanations for financial penalties. "How did you get to that number?" Kovacic asked, emphasizing the need for agencies to "show your work" when calculating fines. The penalties for violating the Children's Online Privacy Act (COPPA) can amount to over $53,000 per infraction, potentially leading to much larger sums than the $400 million agreed upon.
This figure stands in stark contrast to an $18 billion settlement reached by Meta with a coalition of state attorneys general for similar issues, which also included daily time limits on children's social media use. The Justice Department did not publicly disclose the specific number of alleged TikTok violations or how the $400 million figure was calculated, despite the general practice of allowing public comment on such agreements.
A senior Justice Department official stated that the settlement was the result of lengthy negotiations and was based on a review of prior COPPA settlements and a specific, albeit undisclosed, number of violations by TikTok. The official also noted that TikTok has implemented significant changes to its data handling and online safety practices since the lawsuit was filed, suggesting the company involved in the settlement was different from the one initially sued.
Previously, in spring 2024, TikTok had reportedly agreed in principle to pay $1 billion to settle privacy violations in closed-door negotiations with the FTC. Those talks reportedly fell apart, with officials at the Biden-era Justice Department concerned that a settlement could impede legislative efforts to ban the app.
The Justice Department initially sued TikTok in August 2024, following an FTC referral that indicated the company allegedly disregarded evidence of minors bypassing age restrictions on the app. An ex-FTC official with knowledge of the investigation indicated that some findings were not pursued, including evidence that the company exposed the personal data of American users, such as Social Security and bank account numbers, on an internal messaging board accessible to employees in China.
The lawsuit also included claims that TikTok ignored parental requests to delete children's accounts, requiring an explicit admission of being under 13 before taking action, and that moderators spent only seconds reviewing flagged accounts. In its motion to vacate the consent order, the DOJ argued that TikTok had undergone significant changes and implemented extensive measures to protect children, rendering the original order no longer in the public interest.
U.S. District Judge George Wu, overseeing the DOJ's lawsuit, observed in an August court filing that neither party had provided details on the settlement terms or requested court enforcement, noting his own inability to inquire further. Associate Attorney General Stanley Woodward, however, hailed the settlement as a "major victory for American children and parents," asserting it provides stronger protections without protracted litigation.
Critics, including the online safety watchdog Fairplay, have labeled the deal a "sweetheart deal" and a "huge disappointment." Fairplay policy counsel Haley Hinkle pointed out that the DOJ's settlement imposes no new obligations on TikTok and, worse, lifts existing compliance and monitoring requirements. This stands in contrast to the Meta settlement, which, despite its own criticisms, included new protections for children.
A consortium of U.S. investors, including Oracle, Silver Lake, and Michael Dell, took majority control of TikTok in January, a move backed by the Trump administration aimed at addressing national security concerns. ByteDance retained a 19.9% stake in the new U.S. joint venture.