US Judge Signals Rejection of Part of TikTok Privacy Settlement

A federal judge in the US indicated he might refuse part of Tik Tok's $400m settlement with the Justice Department over allegations the company violated children's online privacy laws, casting doubt on whether the company will face an earlier federal court order. US District Judge George H Wu, in Los Angeles, expressed skepticism about a proposed settlement meant to end a Justice Department lawsuit. This would resolve allegations that Tik Tok violated the Children's Online Privacy Protection Act, known as COPPA.

US District Judge George H Wu said he was inclined to refuse a request to lift an agreement imposed on Musical.ly in 2019.

The previous platform is the precursor to Tik Tok. The judge said information provided by Tik Tok and the government did not establish that ending the order would give a long-term solution or that undoing it was appropriate in light of the recent information provided by the parties. The settlement announced in August, would make Tik Tok, Byte Dance and related companies pay $300m immediately and an additional $100m if a court agrees to dismiss the earlier court ruling. This proposed settlement would resolve a lawsuit that the Justice Department filed over allegations Tik Tok violated federal children's privacy law.

The lawsuit asserted that Musical.ly was aware of children under age 13 using its site but failed to have parental permission before collecting users' names, email addresses and other personal information.

Musical.ly reached a settlement at the time of $5.7m. Tik Tok's current order requires the company to adhere to certain reporting and record-keeping duties through 2029. This suggests that even if the broader $400m settlement is completed, those requirements may still apply.

The federal government said Tik Tok has changed significantly since the original lawsuit, including ownership changes, changed personnel, changed compliance operations and privacy practices. Tik Tok's US joint venture has also said it requires users to input their date of birth and has developed age-moderation systems to spot children under 13 who enter false birth dates. A hearing is scheduled for September 21 to consider Tik Tok's request to lift the original order.

Until then, the current settlement is under additional judicial review.

The latest was a tentative position rather than a final decision. The case adds an extra element of regulatory oversight to Tik Tok, which has faced separate matters over its structure, data security and the treatment of minors. The latest issue refers to Tik Tok's enforced compliance and does not decide the outcome of the broader settlement.