Key facts
- A US judge indicated he would reject part of TikTok and ByteDance's proposed $400 million settlement with the US Justice Department.
- The settlement includes a $300 million immediate payment and a further $100 million if a court terminates a 2019 FTC consent decree.
- US District Judge George H. Wu said he was inclined to reject the request to end the consent decree.
- The FTC alleged Musical.ly, later folded into TikTok, collected personal information from users under 13 without parental consent.
- The lawsuit accused TikTok and ByteDance of violating a law requiring parental consent before collecting information from users under 13.
A proposed $400 million settlement between TikTok, its Chinese parent company ByteDance, and the US Justice Department has encountered a significant obstacle, as a federal judge indicated he would reject a key component of the agreement. US District Judge George H. Wu in Los Angeles stated on Friday that he was inclined to reject the request to terminate a 2019 consent decree imposed by the Federal Trade Commission (FTC) on TikTok's predecessor, Musical.ly.
The settlement, reached in August, aimed to resolve allegations that the popular short-video app violated US children's online privacy laws. Under the terms, TikTok agreed to pay $300 million immediately and an additional $100 million if the 2019 consent decree was terminated. The FTC had previously alleged that Musical.ly, before being integrated into TikTok, collected personal information from users under 13 without obtaining parental consent.
Judge Wu expressed that without further details, the court could not determine if ending the decree would constitute a durable remedy or be suitably tailored to changed circumstances. He has scheduled a hearing for Monday to discuss the matter. The original 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 users under 13. TikTok has stated it has implemented significant changes, including to its ownership structure and privacy practices, and established a majority American-owned joint venture to safeguard US user data.