TikTok agrees to $400m settlement with US over child privacy lawsuit

TikTok has agreed to pay $400m (£293m) to the US to end a lawsuit alleging its platform violated children‘s privacy, marking one of the largest ever settlements over the issue.

The deal stems from a 2024 suit by the Department of Justice under former President Joe Biden alleging TikTok and its parent company ByteDance collected "vast amounts of data" on millions of users under the age of 13.

Doing so was against the Children's Online Privacy Protection Act (COPPA), a federal law enacted in 2000. It is the same law that dozens of US states are now suing Meta over.

"Children and parents are better protected today than they were when this case began," assistant Attorney General Brett Shumate said.

Other companies to have paid penalties to the US government for COPPA violations include Google's YouTube, which in 2019 paid $170m, and Epic Games, which in 2022 paid $275m.

Meta is also now facing penalties that could exceed hundreds of billions of dollars stemming from COPPA violations alleged by attorneys general of 29 US states. A jury trial in the lawsuit started this week, with the Instagram and Facebook owner accused of targeting child users and profiting from them.

While the TikTok lawsuit predates last year's split of TikTok's US business and operations from its original base of China, the settlement only involves TikTok's operations in China.

ByteDance, which is a privately held company, was most recently valued by investors at $550bn, external.

Under the terms of the deal, TikTok and ByteDance will immediately pay the DOJ $300m. It will pay another $100m when the government vacates a 2019 consent decree, external with the Federal Trade Commission.

As part of the agreement, the predecessor to ByteDance, Musical.ly, was required to pay a $5.7m fine for COPPA violations and ensure it sought parental consent for any user aged under 13.

The justice department did not detail on Friday any action against TikTok beyond the fine. But the department noted that since it sued the platform, TikTok has "undergone significant changes," including to its ownership, privacy practices and platform controls for young users.

When the lawsuit was filed, attorneys for the US said there were more than 170 million teenagers using TikTok and that the app was "directed to children." Yet, it did not effectively gauge the age of users or get parental consent for use from those underage.

In 2024, former President Biden pushed for TikTok to be either banned, or have the company divest its US operations. President Donald Trump went on to support divestment of the app, which occurred last year.

Its US operations are now 81% owned by a consortium of investors, while Bytedance maintains a 19% stake.

A representative of TikTok did not respond to the BBC for comment.