TikTok To Pay $2 Million To Settle Lawsuit Alleging It Collected And Exposed Children's Data

TikTok and its parent company ByteDance have agreed to pay $US1.1 ($2) million to settle a proposed class action alleging that the app Musical.ly violated children’s privacy laws by collecting their data and operating the app “in a reckless and unlawful manner for commercial gain.”

Earlier this week, a spokesperson for TikTok said that a resolution to the complaint “should be announced soon.” On Friday, the spokesperson said the company had been “made aware of the complaint some time ago” and confirmed a settlement had been reached.

“TikTok is firmly committed to safeguarding the data of its users, especially our younger users,” the spokesperson said in a statement. “Although we disagree with much of what is alleged in the complaint, we have been working with the parties involved and are pleased to have come to a resolution of the issues.”

The resolution comes just days after the complaint was filed in the United States District Court for the Northern District of Illinois by the legal guardians of two minor children identified only by their initials. It alleged that Musical.ly—which was acquired by ByteDance 2017 and later rebranded as TikTok— “surreptitiously tracked, collected, and disclosed the personally identifiable information and/or viewing data … of minor children, and then sold that data to third-party advertisers so they could, in turn, market their products and services” on the app.

The suit further alleged that the app not only failed to put in place safeguards to prevent the use of the app by minors but also failed to take adequate measures to protect children’s data. Moreover, most privacy features on the app were disabled by default. The complaint stated that failing to protect kids’ information presented “serious ramifications, including, but not limited to, children being stalked on-line by adults.”

Musical.ly required users to share input an email address, phone number, username, first and last name, short bio, and a profile picture to create an account. Because both children named in the suit were under 13 at the time they used the app, the complaint argued that Musical.ly’s alleged conduct violated the Children’s Online Privacy Protection Act (COPPA)—which prevents apps and websites targeted to children from obtaining personally identifiable data of kids under 13 without first seeking permission from their parents—among other U.S. laws.

Earlier this year, the U.S. Federal Trade Commission settled with TikTok for $US5.7 ($8) million over allegations that Musical.ly violated COPPA, a resolution that FTC Chairman Joe Simons described in a statement at the time as a “record penalty.” As part of this new settlement, TikTok has agreed to pay an all-cash total of $US1.1 ($2) million to the settlement class.

Earlier this year, the U.S. Federal Trade Commission settled with TikTok for $US5.7 ($8) million over allegations that Musical.ly violated COPPA, a resolution that FTC Chairman Joe Simons described in a statement at the time as a “record penalty.”

As part of this new settlement, TikTok has agreed to pay an all-cash total of $US1.1 ($2) million to the settlement class, which includes any individual who used or signed up for Musical.ly or TikTok when they were younger than 13 as well as their legal guardians. The exact size settlement class is uncertain but is estimated to include roughly 6 million members.