The social media platform TikTok and its Chinese parent company ByteDance have reached an agreement with the U.S. Department of Justice to pay $400 million and settle the lawsuit accusing them of violating children's privacy. The settlement, announced this Friday, represents one of the largest financial compensations ever obtained in a case related to the Children's Online Privacy Protection Act (COPPA).
The lawsuit, filed in 2024 by the Biden administration, alleged that TikTok allowed children under 13 to create accounts and collected their data without parental consent. The platform will pay $300 million immediately , and the remaining $100 million will be paid once the lawsuit against the now-defunct Musical.ly, TikTok's predecessor app, is dropped.
An agreement with conditions
Assistant Attorney General Stanley Woodward hailed the settlement as a victory for American children and parents . In a statement, he emphasized that the Department's priority is ensuring the protection of children online and that companies comply with their legal obligations. Since the lawsuit was filed, TikTok has implemented significant changes to its ownership, management, and privacy practices , according to the Department.
The agreement comes after the White House forced ByteDance to sell its US subsidiary to American investors. The sale was completed in March of this year with a group of buyers led by Oracle founder Larry Ellison, along with Silver Lake, Michael Dell, and MGX. ByteDance retains a 20% stake but has no involvement in management.
Context: regulatory pressure
The lawsuit against TikTok comes amid growing scrutiny of social media and its impact on children. Meta, the parent company of Facebook and Instagram, has also reached a $17.000 billion settlement with 29 states over similar practices, though that agreement is contingent on TikTok and YouTube adopting the same restrictions. This demonstrates that the tech industry is under intense regulatory scrutiny, particularly following lawsuits against Meta and TikTok over the addictive design of their platforms.
In Europe, the European Commission has also opened proceedings against Meta for the addictive design of its platforms. Regulatory pressure is not limited to the United States , and these decisions are likely to set precedents for future legal action in other countries.
TikTok's settlement with the US Department of Justice marks a milestone in protecting children's online privacy. The company will pay a multimillion-dollar fine and has committed to strengthening its policies , while the sale of its US subsidiary signals a change in its structure. It remains to be seen whether these measures will extend to other regions, such as Europe, where regulation is also progressing.
