TikTok and ByteDance agree to a $400 million U.S. settlement over allegations that children’s personal data was collected without parental consent
New Delhi: TikTok Inc. and its parent company, ByteDance Ltd., have agreed to pay $400 million to settle a lawsuit filed by the U.S. Department of Justice. The lawsuit alleged that TikTok collected and retained children’s personal data without the required parental consent.
The settlement is subject to approval by a federal court.
The Justice Department filed the case in 2024 on behalf of the Federal Trade Commission. It accused TikTok of violating the Children’s Online Privacy Protection Act (COPPA).
The government alleged that millions of children under 13 created TikTok accounts without their parents’ knowledge or consent. It also said the company made it difficult for parents to delete those accounts and the associated personal information.
Settlement terms
Under the terms of the agreement, TikTok and ByteDance will pay $300 million immediately. The remaining $100 million will be paid after a court enters an order vacating a prior consent decree involving Musical.ly, the predecessor app that ByteDance acquired and later rebranded as TikTok.
The Justice Department described the settlement as one of the largest recoveries ever obtained in a COPPA case. It resolves the current litigation without the need for a prolonged trial.
“This settlement is a major victory for American children and parents,” Associate Attorney General Stanley Woodward said. He added that the department remained focused on ensuring that companies handling children’s personal data meet their legal obligations.
According to the Justice Department, TikTok has strengthened its age-verification measures, expanded parental oversight tools and improved its privacy and compliance practices since the lawsuit was filed. Once TikTok meets the required conditions, the settlement will also end the court supervision imposed under the earlier consent decree.
Background of the case
At the centre of the dispute is COPPA, a U.S. federal law that requires online services to obtain verifiable parental consent before collecting personal information from children under 13.
The Justice Department’s 2024 complaint alleged that TikTok continued to allow underage users on the platform. It also alleged that the company collected their data despite knowing that many users were minors.
TikTok had already faced federal action in 2019. The FTC settled claims against its predecessor, Musical.ly, for $5.7 million. The settlement included a consent decree governing the handling of children’s data.
The government later alleged that TikTok had failed to fully comply with those obligations. This contributed to the fresh lawsuit. It also sought to void the 2019 decree, arguing that continued federal supervision was no longer necessary because of the company’s changed ownership and compliance measures.
Ownership changes
The privacy settlement comes against the backdrop of a broader dispute between TikTok, ByteDance and the U.S. government over national security concerns linked to the app’s Chinese ownership.
In January, ByteDance completed a deal transferring control of parts of TikTok’s U.S. operations to a new entity majority-owned by American investors. Oracle Corp., Silver Lake Management LLC and Abu Dhabi-based MGX together hold a 45 per cent stake in the venture (15 per cent each). Existing investors hold the remaining stake, while ByteDance retains 19.9 per cent.
The restructuring came after years of pressure from Washington. U.S. lawmakers had threatened restrictions or a ban unless TikTok transferred control of its American operations away from ByteDance. The Justice Department said TikTok has since made significant changes to its ownership, management, compliance functions and privacy practices.
Earlier action and penalties
TikTok’s latest settlement is substantially larger than the $5.7 million payment agreed in 2019. In the 2024 lawsuit, the government sought daily penalties that could have reached hundreds of millions of dollars. The new agreement instead provides a negotiated resolution subject to court approval.
The additional $100 million payment is specifically tied to the court’s order vacating the earlier consent decree. Once that happens, ongoing court supervision under the 2019 order will come to an end.
Other legal challenges
The settlement does not end all legal scrutiny of TikTok over children and young users. The company remains a defendant, along with Meta Platforms Inc., Google’s YouTube and Snap Inc., in nationwide litigation seeking to hold major technology platforms accountable for alleged harms to young users.
These cases form part of a wider legal and regulatory push in the United States concerning how social media companies protect minors, verify ages and handle children’s personal information.
For TikTok, the $400 million agreement closes one major federal privacy case. At the same time, it places renewed attention on the company’s efforts to strengthen age verification, parental controls and internal compliance systems.
The settlement remains subject to approval by a federal court. Until that process is completed, the agreement does not formally conclude the litigation. TikTok did not immediately respond to a request for comment.
