TikTok has agreed to pay $400 million in the United States to settle a case alleging violations of children's online privacy, a resolution described as a significant victory for parents and children. The social media and video platform platform reached the settlement, one of the largest ever by a major tech company in a similar case, after being accused of illegally collecting details from millions of users under 13.
The U.S. Department of Justice sued TikTok and its former parent company, ByteDance, in August 2024 during the Biden administration. The lawsuit alleged that the companies failed to protect children's privacy and illegally collected their information, including names and email addresses, in violation of the Children's Online Privacy Protection Act (COPPA).
COPPA, a federal law enacted in 2000, is designed to protect the privacy of children under 13. Government lawyers stated that at the time the lawsuit was filed, more than 170 million teenagers were estimated to be using TikTok and that the app was "directed to children" but did not adequately verify users' ages or obtain parental consent for underage users.
This same legislation is currently being used by 29 states to sue Meta for alleged misuse of children's data and profiting from it. Meta has denied these allegations and could face fines in the hundreds of billions of dollars.
TikTok's U.S. operations are now 81% owned by a consortium of investors, with ByteDance retaining a 19% stake. This ownership structure followed a push by then-President Joe Biden in 2024 for TikTok to be banned or forced to sell its U.S. operations, a sale that occurred last year with the support of former President Donald Trump.
US Assistant Attorney General Brett Shumate stated following the settlement, "Children and parents are better protected today than they were when this case began." The settlement requires TikTok and ByteDance to pay $300 million immediately, followed by an additional $100 million. As part of the agreement, Musical.ly, ByteDance's predecessor, paid a $5.7 million fine for COPPA violations and committed to obtaining parental consent for users under 13.
The TikTok U.S. joint venture has stated in court filings that it now requires all users to enter their date of birth to use the site. The U.S. government has noted that TikTok has implemented significant changes to its ownership, privacy practices, and platform controls for young users since the complaint was filed.
Previous COPPA-related penalties have been paid by other major tech companies, including Google, which paid a $170 million fine for its YouTube platform in 2019, and Epic Games, which paid $275 million in 2022.
However, some experts have questioned the effectiveness of such fines. Baroness Beeban Kidron, a former film director and advocate for children's digital safety, commented that a $400 million settlement might be insignificant for a company valued at $550 billion, suggesting it could be viewed as merely a cost of doing business. She emphasized the need for companies to be made safe rather than simply fined for not being safe, highlighting that regulatory enforcement in places like the UK, despite having codes in place, has sometimes lacked the necessary political will.
Former TikTok executive Trevor Johnson echoed these sentiments, arguing that accountability for big tech platforms regarding children's privacy must be ongoing and that fines alone are not the optimal solution, as they can be absorbed as a business expense by large corporations.