TikTok's $400M Privacy Settlement Hits Snag as US Judge Questions Key Provision

A proposed $400 million settlement between TikTok, its parent company ByteDance, and the U.S. Justice Department has encountered a significant obstacle. A federal judge has signaled he is inclined to reject a key component of the agreement that addresses allegations of violating children's online privacy laws.

Settlement Terms Under Scrutiny

The agreement, reached in August, requires TikTok to pay $300 million to resolve a 2024 Justice Department lawsuit. The suit accused the company of illegally collecting personal information from users under the age of 13 without parental consent.

A further $100 million payment was contingent on the court terminating a 2019 consent decree. This earlier decree was imposed by the Federal Trade Commission (FTC) on Musical.ly, TikTok's predecessor, for similar privacy violations.

Judge's Concerns

U.S. District Judge George H. Wu in Los Angeles stated in a tentative ruling that he was likely to deny the request to end the 2019 consent decree. The judge scheduled a hearing for Monday to discuss the matter further.

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Judge Wu noted that without more details, the court "cannot determine that it constitutes a durable remedy or that termination is suitably tailored to the asserted change in circumstance." The 2019 decree mandates that TikTok maintain specific reporting and record-keeping obligations through 2029 and was originally settled with a $5.7 million fine.

Background and Implications

The Justice Department's 2024 lawsuit alleged that TikTok and ByteDance failed to protect children's privacy as required by U.S. law. While the government acknowledged that TikTok has since made significant changes to its compliance and privacy functions, the judge's hesitation puts the finality of the settlement in question.

For its part, TikTok has stated it implemented sophisticated age-moderation systems and requires users to enter a date of birth. The legal challenge comes as ByteDance also works to address broader U.S. data security concerns through a majority American-owned joint venture for its U.S. operations.