TikTok to pay $400 million to settle US federal children's privacy lawsuit
- Marijan Hassan - Tech Journalist
- 3 hours ago
- 2 min read
TikTok and its parent company ByteDance have agreed to pay $400 million to settle a 2024 federal lawsuit brought by the U.S. Department of Justice (DOJ) and the Federal Trade Commission (FTC) alleging widespread violations of children's online privacy laws. The resolution marks one of the largest financial recoveries ever obtained under the Children's Online Privacy Protection Act (COPPA), an historic 1998 federal statute designed to shield users under the age of 13 from unauthorized data tracking and collection.
Phased Financial Payout and Legal Structure
According to terms released by the Justice Department, the $400 million financial penalty will be disbursed across two distinct installments:
Immediate Payment: TikTok will pay $300 million directly to the U.S. government to settle allegations related to its 2024 COPPA compliance.
Vacated Consent Decree: An additional $100 million will be remitted upon the entry of a federal court order vacating a prior 2019 FTC consent decree associated with TikTok’s predecessor application, Musical.ly.
The Core Allegations: Data Harvesting and 'Kids Mode' Failures
The joint DOJ and FTC complaint, originally filed in August 2024, alleged that TikTok knowingly allowed millions of children under 13 to create standard accounts on the platform without notifying or securing verifiable consent from their parents.
Federal regulators alleged that even when young users utilized "Kids Mode", a stripped-back version of the app marketed as a safe environment for pre-teens, the platform continued to collect and retain personal identifiers, including email addresses and location parameters. Furthermore, the government claimed TikTok routinely failed to fulfill direct parental deletion requests, leaving underage account data active on company servers.
"This settlement is a major victory for American children and parents," Associate Attorney General Stanley E. Woodward Jr. stated in an official announcement. "The Department's priority is ensuring that children are protected online and that companies entrusted with their personal information meet their legal obligations."
Structural Overhauls and Regulatory Context
In reaching the agreement, the Justice Department noted that TikTok has implemented "extensive measures designed to strengthen safeguards for younger users," including updated age-verification controls, dedicated underage content moderation teams, and expanded parental oversight tools.
The privacy settlement resolves a major regulatory headache for the video platform following its recent corporate restructuring, which saw ByteDance form a majority American-owned joint venture alongside investors Oracle, Silver Lake, and MGX. However, it comes amid broader industry-wide pressure, as platforms like Meta face ongoing federal and state trials over youth mental health and child safety protections.
