Musical.ly, FTC Settle Children’s Privacy Claims for $5.7M (1)

The operator of a social media app will pay $5.7 million to settle Federal Trade Commission allegations that it violated a child online privacy law, the agency said.

The FTC said it was the biggest civil penalty it has obtained under the Children’s Online Privacy Protection Act. Musical.ly, which now goes by TikTok after a 2018 merger, agreed to settle the agency’s claims that it illegally collected children’s personal information, the commission said.

“This record penalty should be a reminder to all online services and websites that target children: We take enforcement of COPPA very seriously, and we will not tolerate companies that flagrantly ignore the law,” FTC Chairman Joe Simons said in a statement.

The app lets users create videos of themselves lip-syncing to songs and share the music videos and otherwise interact with other users. Its operators didn’t notify parents about its data collection practices or get consent to collect data from users under the age of 13, the FTC alleged in the complaint. The company also failed to delete children’s personal data when parents requested, the agency claimed.

The company agreed to remove videos made by children younger than 13 and change their business practices to comply with the law, under the proposed settlement.

TikTok will divide users into “age-appropriate” app experiences starting Feb. 27, the company said in a blog post about the FTC agreement. “The new environment for younger users does not permit the sharing of personal information, and it puts extensive limitations on content and user interaction,” according to the blog post.

“It’s our priority to create a safe and welcoming experience for all of our users, and as we developed the global TikTok platform, we’ve been committed to creating measures to further protect our user community,” the company said.

The children’s privacy law prevents operators of websites and online services directed at kids from collecting personal data of children 12 years old and younger, unless the company has explicit parental consent. The Musical.ly app operators knew a “significant percentage” of its users were under 13; collected their names, email addresses and other personal information; and received thousands of complaints from parents that their kids had created accounts on the app, the commission alleged.

The commission voted 5-0 to accept the settlement. The agency’s two Democratic commissioners, while calling the settlement a “big win in the fight to protect children’s privacy,” released a separate statement saying that corporate executives should be held accountable when companies break the law.

“When any company appears to have a made a business decision to violate or disregard the law, the Commission should identify and investigate those individuals who made or ratified that decision and evaluate whether to charge them,” commissioners Rohit Chopra and Rebecca Kelly Slaughter said in their statement.