TikTok agrees to $400 million US children’s privacy settlement

Washington, August 21 - TikTok and its Chinese parent company ByteDance have reached a $400-million settlement to end the U.S. Justice Department's accusations that the short-video app breached children's online privacy laws. The Justice Department filed a lawsuit against TikTok and ByteDance in 2024, alleging the company failed to safeguard children's privacy and unlawfully collected their data.

The defendants were accused of breaching a law requiring online services targeting kids to acquire parental consent before gathering personal information from users under the age of 13. Associate Attorney General Stanley Woodward emphasized the department's commitment to protecting children online and ensuring companies handling their personal data adhere to legal requirements.

Under the agreement, TikTok will pay $300 million upfront and an extra $100 million once a court vacates a prior consent decree from a 2019 settlement with the Federal Trade Commission (FTC) related to TikTok's predecessor, Musical.ly. The FTC had previously stated that TikTok, then known as Musical.ly, was aware that young children used the app and had failed to obtain parental consent for collecting their names, email addresses, and other personal details. The company had previously paid a $5.7 million fine in January.

Following the lawsuit, ByteDance agreed to form a majority American-owned joint venture to secure U.S. data and prevent a U.S. ban on the app, which has over 200 million users in the United States. The government noted that since the complaint was filed, TikTok has undergone substantial changes to its ownership, management, compliance functions, and privacy practices. The DOJ stated that the settlement ensures American families continue to enjoy enhanced protections without the prolonged uncertainty of ongoing litigation.

The TikTok U.S. joint venture disclosed in a court filing that it requires all users to enter their date of birth to access the site. TikTok reported that it has implemented advanced age-moderation systems capable of identifying children under 13 who falsely claimed their age. As a result of these measures, the company claims to have deleted tens of thousands of underage accounts, with hundreds of employees trained in underage moderation.