TikTok to Pay $400 Million Fine for Illegally Collecting Data on Children Under 13 in US
TikTok and its Chinese parent company ByteDance have agreed to pay a $400 million settlement to the US government, marking the largest penalty to date related to children's online privacy violations. The US Department of Justice announced the settlement over the weekend, resolving a 2024 lawsuit that accused TikTok of allowing children under 13 to create accounts and collecting their personal data without parental consent, violating US law. TikTok will pay $300 million immediately, with an additional $100 million contingent on the court lifting a prior consent decree against Musical.ly, a video app acquired by ByteDance in 2017 and later merged into TikTok.
This is not TikTok's first privacy issue; in 2019, Musical.ly paid a $5.7 million fine for similar violations. The DOJ alleged that TikTok continued to breach these rules by collecting emails, phone numbers, and location data from underage users without proper parental approval and knowingly allowing children to open regular accounts. The lawsuit also highlighted TikTok's insufficient age verification systems, which failed to prevent young children from registering.
The US Children’s Online Privacy Protection Act (COPPA), effective since 2000, requires online services to obtain parental consent before collecting personal data from children under 13. TikTok's settlement follows similar large fines imposed on Google/YouTube ($170 million in 2019) and Epic Games ($275 million in 2022) for COPPA violations. TikTok disputed many allegations as outdated or inaccurate but has since enhanced its privacy controls, including stricter age verification, parental supervision tools, and dedicated staff to manage underage accounts.
The settlement comes amid heightened US regulatory scrutiny of TikTok, including a Biden-era law demanding ByteDance sell TikTok’s US operations or face a ban. This was later modified to a new ownership structure where US investors, including Oracle, Silver Lake, and Abu Dhabi’s MGX, hold 81% of the US business, with ByteDance retaining 19%. TikTok remains widely used in the US, with over 200 million users.
Stanley Woodward, Deputy Attorney General, called the settlement a "major victory for American children and parents," emphasizing the importance of protecting children’s online privacy. Meanwhile, a similar class-action lawsuit against TikTok is ongoing in Israel, seeking compensation for children under 13 who registered with false ages and had their data collected without parental consent, with claims potentially exceeding one billion shekels.
