TikTok Sued by US for Allegedly Breaking Kids’ Privacy Law (1)

TikTok was sued by the US for allegedly collecting data on children in violation of an online privacy act, three months after the popular video app sued the government over a law that could ban it across the country.

In a suit filed Friday in US District Court in California, the Justice Department claimed the app, owned by the Chinese company ByteDance Ltd., has allowed millions of children under the age of 13 to create accounts without their parents’ knowledge or consent. It did so even after reaching a 2019 settlement with the Federal Trade Commission related to kids’ privacy, according to the complaint.

In the settlement, TikTok agreed to pay $5.7 million for failing to obtain parental consent before collecting information about kids, as required by the Children’s Online Privacy Protection Act. The 1998 statute limits how websites and online services can collect, use and disclose information from kids.

The company also made it hard for parents to request deletion of a child’s account, sometimes requiring multiple requests, and did nothing to ensure that kids didn’t immediately create new ones, the US alleges.

Threat to Safety

“TikTok knowingly and repeatedly violated kids’ privacy, threatening the safety of millions of children,” FTC Chair Lina Khan said in a statement.

The US is seeking penalties as high as $51,744 per violation per day, which could add up to hundreds of millions of dollars if the government prevails.

TikTok said it disagrees with the claims and that many of them are inaccurate or have been addressed.

“We are proud of our efforts to protect children, and we will continue to update and improve the platform,” a spokesperson said in a statement, citing “age-appropriate experiences with stringent safeguards” and saying TikTok “proactively” removes users it suspects are underage.

Biden and Trump

The suit is the latest legal volley over the video sharing platform, which has faced criticism about data security and ties between ByteDance and the Chinese government.

President Joe Biden in April signed a law that would ban TikTok unless it is sold by January 2025. The measure is meant to address national security concerns that Beijing could access user data or influence what’s seen on the app. ByteDance says it is independent of the Chinese government and has challenged the law in court.

Donald Trump, who as president unsuccessfully sought to ban TikTok or force its sale, is now speaking out for it, as he courts young voters in his bid to regain the White House. Trump, who began posting on TikTok in June and has a substantial following on the app, says a ban would only help rivals like Meta Platforms Inc.’s Facebook.

Five to Seven Seconds

Despite the 2019 settlement, the government alleges, TikTok allowed users to bypass inputting an age when creating an account, even though employees flagged that the practice could violate the children’s privacy law. The company’s reviewers spent an average of just five to seven seconds looking over each account to determine whether it belonged to a child, the US claims. TikTok collected more information than it needed and shared that data with partners like Meta, according to the complaint.

The Justice Department filed the suit on behalf of the FTC, which investigated the case. It is narrower than what the FTC recommended, after the department opted to strike claims that TikTok deceived US consumers by failing to inform them that Beijing-based employees of ByteDance would have access to their personal and financial information. It struck those allegations to avoid complications in a different federal lawsuit involving the company.

In June the FTC took the rare step of publicly announcing that it had referred a case on TikTok to the Justice Department. The agency has filed a number of lawsuits against popular websites and apps for allegedly violating the children’s privacy law. Microsoft Corp., Amazon.com Inc. and Epic Games, the maker of the popular Fortnite, have all settled recent FTC suits on kids’ privacy.

The new case is US v. ByteDance Ltd., 24-cv-06535, US District Court, Central District of California.

(Updates with additional details from complaint starting in first section and with TikTok comment in second.)

--With assistance from Sabrina Willmer, Jordan Fabian and Kurt Wagner.

To contact the reporter on this story:
Leah Nylen in Washington at lnylen2@bloomberg.net

To contact the editors responsible for this story:
Sara Forden at sforden@bloomberg.net

Peter Jeffrey

© 2024 Bloomberg L.P. All rights reserved. Used with permission.