TikTok and its parent company, ByteDance, have agreed to a $400 million settlement with the U.S. Department of Justice (DOJ) to resolve allegations that the social media platform violated children’s privacy laws.
The DOJ said the agreement represents one of the largest financial recoveries in the history of the Children’s Online Privacy Protection Act (COPPA).
The settlement ends a 2024 lawsuit filed by the Justice Department under the Biden administration, which accused TikTok of multiple COPPA violations that put the privacy and safety of young users at risk.
The allegations included knowingly allowing children under 13 to create standard TikTok accounts without parental consent, as well as collecting personal information, including email addresses, from children using the platform’s restricted “Kids Mode”.
The Justice Department also alleged that TikTok repeatedly failed to comply with parents’ requests to delete their children’s accounts and associated data.
The case further accused the company of violating the terms of a 2019 Federal Trade Commission (FTC) consent decree imposed following ByteDance’s acquisition of the predecessor app, Musical.ly.
How the $400 Million Penalty Will Be Paid
Under the settlement, TikTok will pay the $400 million penalty in two parts.
TikTok will make an immediate payment of $300 million, while the remaining $100 million will be paid once an order is entered to formally vacate the previous FTC consent decree relating to Musical.ly.
TikTok Strengthens Privacy and Compliance Measures
In announcing the settlement, the Justice Department acknowledged that TikTok has recently made significant changes to its privacy practices and corporate management.
The DOJ stated that TikTok has “implemented extensive measures designed to strengthen safeguards for younger users, improve age-related controls, and enhance parental oversight”.
The resolution also follows a major corporate restructuring carried out by TikTok earlier this year as the company sought to address concerns from U.S. regulators and strengthen protections for American user data.
As part of the restructuring, TikTok's U.S. operations were spun off into a new entity known as the TikTok USDS Joint Venture.
The new business is controlled by major investors, including Oracle, Silver Lake and MGX, while ByteDance retains a minority 19.9 per cent stake.
Settlement Clears Major Legal Hurdle for TikTok
The $400 million settlement removes a significant legal challenge for TikTok, which has faced years of regulatory scrutiny in the United States over its data privacy practices and its links to China.
The agreement also comes after another recent development favourable to the platform. Earlier this month, the Office of Management and Budget (OMB) lifted a 2022 legislative ban, clearing the way for federal workers to use TikTok on government-issued devices once again.
The settlement marks a major step in TikTok’s efforts to resolve its long-running U.S. privacy and regulatory disputes while strengthening safeguards for younger users.
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