Key facts
- A US judge indicated he would reject part of TikTok and ByteDance's proposed $400 million settlement with the Justice Department.
- The settlement includes a $300 million immediate payment and an additional $100 million if a 2019 FTC consent decree is terminated.
- US District Judge George H. Wu questioned the termination of the consent decree, stating the court needed more details to determine if it was a durable remedy.
- The FTC alleged that Musical.ly, later folded into TikTok, failed to obtain parental consent before collecting personal information from young users.
- The Justice Department filed a lawsuit in 2024 accusing TikTok and ByteDance of violating laws requiring parental consent for collecting information from users under 13.
A proposed $400 million settlement between TikTok, its parent company ByteDance, and the US Justice Department has encountered a significant obstacle, as a federal judge signaled his inclination to reject a key component of the agreement. US District Judge George H. Wu expressed reservations about terminating a 2019 consent decree imposed by the Federal Trade Commission (FTC) on TikTok's predecessor, Musical.ly, as part of the settlement.
Wu stated in a tentative rejection that the court lacked sufficient details to determine if ending the decree would constitute a "durable remedy" or if such a termination was appropriately tailored to the changed circumstances. A hearing was scheduled for Monday to address these concerns.
The settlement aims to resolve allegations that TikTok violated US children's online privacy laws. The deal includes an immediate payment of $300 million and a further $100 million contingent on the termination of the 2019 consent decree. The FTC had previously alleged that Musical.ly collected personal information from underage users without obtaining parental consent, leading to a $5.7 million fine.
The Justice Department's lawsuit, filed in 2024, accused TikTok and ByteDance of failing to protect children's privacy and illegally collecting their personal data, in violation of laws requiring parental consent for online services targeting children under 13. TikTok has since undergone changes to its ownership structure, management, and privacy practices, including the establishment of a majority American-owned joint venture to safeguard US user data.