TikTok to pay $400 million in U.S. settlement over children's data privacy

TikTok has agreed to pay $400 million to resolve a United States lawsuit that accused the company and its parent entity, ByteDance, of violating federal children's privacy laws. The settlement, announced by the U.S. Department of Justice (DOJ) on Friday, brings an end to litigation filed in 2024.

Under the terms of the agreement, TikTok will pay $300 million immediately. The remaining $100 million will be paid after a court order vacates an earlier consent decree that had been issued against Musical.ly, the app that preceded TikTok in the U.S. market.

U.S. Associate Attorney General Stanley E. Woodward Jr. described the settlement as a significant step in protecting young users. "This settlement is a major victory for American children and parents," he said in a statement. "The Department's priority is ensuring that children are protected online and that companies entrusted with their personal information meet their legal obligations. This resolution secures a substantial recovery while reinforcing the protections that families expect and deserve."

The DOJ's lawsuit alleged that TikTok and ByteDance violated the Children's Online Privacy Protection Act (COPPA), a 1998 federal law that requires apps and websites aimed at children to obtain verifiable parental consent before collecting personal data from users under 13. The complaint also claimed that the companies failed to act on parents' requests to delete children's accounts, and in some cases kept accounts open even when they knew the users were underage.

This lawsuit followed an earlier 2019 consent decree against Musical.ly, which was absorbed into TikTok after a merger. That decree had imposed a $5.7 million fine and required compliance with COPPA. The new settlement addresses alleged violations that continued after that decree.

Since the lawsuit was filed, TikTok's U.S. operations have undergone structural changes. In January, the company signed agreements with investors including Oracle, Silver Lake and the Emirati investment firm MGX, forming a new joint venture for TikTok U.S. These changes were part of broader restructuring following regulatory and political pressure on the platform.

TikTok representatives did not immediately respond to requests for comment on Friday.

The settlement is part of a wider wave of legal and regulatory actions against social media companies over children's safety and privacy. Instagram's parent company, Meta Platforms, is currently facing trial in federal court in Oakland, California, over allegations that it violated COPPA and various state laws. Several countries have also moved to restrict or ban young users from social media platforms.

The resolution does not constitute an admission of liability, and the terms are subject to court approval. The case highlights the increasing scrutiny on how digital platforms handle children's data and the growing financial consequences for non-compliance.