TikTok to pay $400m to US in one of largest child privacy settlements
Source: BBC World โ (cross-verified by 4 outlets โ full list below)
The deal stems from a 2024 lawsuit alleging Tik Tok and its parent company Byte Dance collected "vast amounts of data" on millions of users under the age of 13. Tik Tok has agreed to pay $400m (ยฃ293m) to the US to end a lawsuit alleging its platform violated childrenโs privacy, marking one of the largest ever settlements over the issue. The deal stems from a 2024 suit by the Department of Justice under former President Joe Biden alleging Tik Tok and its parent company Byte Dance collected "vast amounts of data" on millions of users under the age of 13. Doing so was against the Children's Online Privacy Protection Act (COPPA), a federal law enacted in 2000. It is the same law that dozens of US states are now suing Meta over . "Children and parents are better protected today than they were when this case began," assistant Attorney General Brett Shumate said. Other companies to have paid penalties to the US government for COPPA violations include Google's You Tube, which in 2019 paid $170m, and Epic Games, which in 2022 paid $275m. Meta is also now facing penalties that could exceed hundreds of billions of dollars stemming from COPPA violations alleged by attorneys general of 29 US states.
A jury trial in the lawsuit started this week , with the Instagram and Facebook owner accused of targeting child users and profiting off of them. While the Tik Tok lawsuit predates last year's split of Tik Tok's US business and operations from its original base of China, the settlement only involves Tik Tok's operations in China. Byte Dance, which is a privately held company, was most recently valued by investors at $550bn , external . Under the terms of the deal, Tik Tok and Byte Dance will immediately pay the DOJ $300m. It will pay another $100m when the government vacates a 2019 consent decree , external with the Federal Trade Commission. As part of the agreement, the predecessor to Byte Dance, Musical.ly, was required to pay a $5.7m fine for COPPA violations and ensure it sought parental consent for any user aged under 13. The justice department did not detail on Friday any action against Tik Tok beyond the fine. But the department noted that since it sued the platform, Tik Tok has "undergone significant changes," including to its ownership, privacy practices and platform controls for young users.
When the lawsuit was filed, attorneys for the US said there were more than 170 million teenagers using Tik Tok and that the app was "directed to children." Yet, it did not effectively gauge the age of users or get parental consent for use from those underage. In 2024, former President Biden pushed for Tik Tok to be either banned, or have the company divest its US operations. President Donald Trump went on to support divestment of the app, which occurred last year. Its US operations are now 81% owned by a consortium of investors, while Bytdance maintains a 19% stake. A representative of Tik Tok did not respond to the BBC for comment. US states call for big changes to Instagram and Facebook as Meta child privacy trial begins Meta hooked children on Facebook and Instagram, US court hears Is the US-China Tik Tok deal done?
โก Effects Interpreter
๐World Economylow impact
What this means for you
- โถGlobal commerce often shrugs off modest shocks, but keeps one eye open.
- โถOverseas suppliers may quietly rethink their pricing after a story like this.
๐๏ธLocal Economylow impact
What this means for you
- โถYour weekly shop might get a touch dearer, or cheaper, over time.
- โถJobs and trade close to home might feel a soft knock-on effect.
๐ฆRates & Bankslow impact
What this means for you
- โถThe cost of borrowing tends to shift gradually rather than in one leap.
- โถBanks tend to wait and see before nudging the rates they offer.
โค๏ธHealthmedium impact
What this means for you
- โถChecking in on vulnerable neighbours matters when news feels heavy.
- โถDay-to-day stress can creep up if this starts touching familiar routines.
๐ทWealthmedium impact
What this means for you
- โถIt's a reasonable moment to check your investments are still on track.
- โถTime in the market usually matters more than timing the market around this kind of news.
๐ Housingmedium impact
What this means for you
- โถProperty values usually need more than one headline to really move.
- โถHome costs usually respond later, once the bigger picture settles.
๐ Effects for your country
The U.S.'s central bank rate currently stands at 3.75%, so a global rates move like this could feed through to local borrowing costs. The U.S.'s economy is growing at 2.3% with inflation at 3.2%, the backdrop this story's effects play out against locally. Housing-market effects like this are usually felt most where mortgage rates track the U.S.'s own central bank rate closely. With the U.S.'s unemployment at 4.4%, personal-finance effects like this land on a labour market that is currently fairly stable. Health-system effects are harder to localise from economic indicators alone โ the real impact in the U.S. depends more on local healthcare capacity than the figures above.
The UK's central bank rate currently stands at 3.75%, so a global rates move like this could feed through to local borrowing costs. The UK's economy is growing at 0.8% with inflation at 3.2%, the backdrop this story's effects play out against locally. Housing-market effects like this are usually felt most where mortgage rates track the UK's own central bank rate closely. With the UK's unemployment at 5.6%, personal-finance effects like this land on a labour market that is currently fairly stable. Health-system effects are harder to localise from economic indicators alone โ the real impact in the UK depends more on local healthcare capacity than the figures above.
France's central bank rate currently stands at 2%, so a global rates move like this could feed through to local borrowing costs. France's economy is growing at 0.9% with inflation at 1.8%, the backdrop this story's effects play out against locally. Housing-market effects like this are usually felt most where mortgage rates track France's own central bank rate closely. With France's unemployment at 7.9%, personal-finance effects like this land on a labour market that is already under strain. Health-system effects are harder to localise from economic indicators alone โ the real impact in France depends more on local healthcare capacity than the figures above.
Romania's central bank rate currently stands at 6.5%, so a global rates move like this could feed through to local borrowing costs. Romania's economy is growing at 0.7% with inflation at 7.8%, the backdrop this story's effects play out against locally. Housing-market effects like this are usually felt most where mortgage rates track Romania's own central bank rate closely. With Romania's unemployment at 6%, personal-finance effects like this land on a labour market that is currently fairly stable. Health-system effects are harder to localise from economic indicators alone โ the real impact in Romania depends more on local healthcare capacity than the figures above.
The UAE's central bank rate currently stands at 3.65%, so a global rates move like this could feed through to local borrowing costs. The UAE's economy is growing at 3.1% with inflation at 2.5%, the backdrop this story's effects play out against locally. Housing-market effects like this are usually felt most where mortgage rates track the UAE's own central bank rate closely. Health-system effects are harder to localise from economic indicators alone โ the real impact in the UAE depends more on local healthcare capacity than the figures above.