TikTok has agreed to pay $400 million to the U.S. government to settle a lawsuit alleging it violated children's privacy one of the largest settlements of its kind.
The case stemmed from a 2024 Department of Justice lawsuit under former President Joe Biden which accused TikTok and parent company ByteDance of collecting "vast amounts of data" from millions of users under 13 also violating the Children's Online Privacy Protection Act (COPPA).
"Children and parents are better protected today than they were when this case began" said Assistant Attorney General Brett Shumate.
Other firms penalized under COPPA include YouTube, which paid $170 million in 2019 and Epic Games which paid $275 million in 2022. Meta now faces a separate COPPA lawsuit from 29 states with damages potentially reaching hundreds of billions of dollars with a jury trial began this week.
Although the lawsuit predates TikTok's split from its Chinese parent last year, the settlement covers only TikTok's China-based operations. ByteDance, a private company was recently valued at $550 billion.
Under the deal TikTok and ByteDance will pay $300 million immediately with another $100 million due once the government lifts a 2019 consent decree tied to predecessor app Musical.ly which had earlier paid a $5.7 million COPPA fine.
The DOJ said TikTok has since made significant changes to its ownership, privacy practices and controls for young users. At the time of filing the prosecutors said over 170 million teens used TikTok also yet the platform failed to verify ages or secure parental consent.
Following political pressure on TikTok's U.S. operations were divested last year and are now 81% owned by a consortium of investors with ByteDance retaining a 19% stake. TikTok did not respond to requests for comment.
