TikTok was set to pay $1B in 2024 over kids – Business News
TikTok is nearing a $400 million truce with President Trump’s Justice Department over little one knowledge privateness breaches – a sweetheart deal because the social-media app was prepared to pay $1 billion to settle the identical claims in 2024, The Post has realized.
In June 2024, the Biden-era Federal Trade Commission disclosed it discovered proof that TikTok had knowingly collected knowledge on kids youthful than 13 with out telling their dad and mom – a violation of a federal law known as the Children’s Online Privacy Protection Act (COPPA).
Policymakers and online security advocates have long pushed for tightened restrictions on focused adverts, arguing social media firms are manipulating impressionable kids and hooking them with addictive options to increase their income.
TikTok was accused of violating a federal knowledge privateness law known as COPPA. AFP by way of Getty Images
TikTok executives – who on the time had been already combating tooth-and-nail to forestall a complete US ban of the app – had been keen to make the case go away. In closed-door negotiations with FTC officers during the spring of 2024, TikTok agreed in precept to pay a $1 billion settlement for the violations, three sources with direct data of the talks instructed The Post.
TikTok, the sources mentioned, was additionally close to agreeing to different key security options sought by the FTC — together with a ban on focused promoting for minors, limits on late-night notifications despatched to their telephones.
The FTC referred its findings and proposed settlement phrases to the Biden DOJ, taking the weird step of disclosing the referral in a press release, stating that it had “determined that doing so here is in the public interest.”
From there, the deal rapidly fell aside.
Insiders mentioned prime officers at Biden’s DOJ had been hesitant to finalize a settlement, fearing that reducing a deal with a company or in any other case pursuing legal motion would undermine Congress’s energetic effort to ban TikTok by laws.
The DOJ is reportedly close to a $400M settlement with TikTok. Christopher Sadowski
“It’s another example of how the Biden administration couldn’t get out of its own way,” mentioned one of the sources with direct data of the state of affairs mentioned.
Last week, ABC reported that the Trump administration was close to an settlement with TikTok to settle the DOJ lawsuit for about $400 million. The money is reportedly earmarked for “beautification” initiatives in Washington DC relatively than compensation for underage victims of knowledge privateness violations.
The reported phrases drew a scathing response from Fairplay for Kids, a main online security advocacy group, which known as the settlement a “a slap on the wrist that will not meaningfully change TikTok’s exploitation and harm of children.”
The $400 million determine quantities to “nothing more than pennies on the dollar” when the true scope of TikTok’s COPPA violations may have resulted in tens of billions in penalties, in accordance to Fairplay.
“News reports about the settlement have not mentioned any meaningful injunctive relief,” Fairplay Policy Counsel Haley Hinkle mentioned in a assertion.
The FTC discovered proof that TikTok knowingly collected kids’ knowledge with out permission. Natalia – stock.adobe.com
“If that proves to be the case, it makes the settlement even weaker. The DOJ should have used the pressure of massive COPPA liability to extract meaningful changes to TikTok’s addictive and dangerous product design.”
The White House referred a request for remark to the DOJ.
“The Justice Department is committed to achieving resolutions that advance the President’s agenda, are grounded in the law and the facts, and protect taxpayer dollars,” a DOJ spokesperson mentioned in a assertion.
TikTok didn’t reply to requests for remark.
The DOJ reluctantly filed a lawsuit in opposition to TikTok in August 2024, however made no point out of the settlement talks. The timing all however assured that the case wouldn’t be resolved till after that yr’s presidential election.
By then, President Trump had already vowed on the marketing campaign path to “save TikTok” if he was elected to the White House. The Trump administration later performed a key position in shaping the deal that allowed a US-majority entity to take over TikTok and avert a ban – with Vice President JD Vance even serving as level individual of negotiations.
The White House’s direct involvement in these talks weakened the DOJ’s leverage in settlement talks and certain pushed TikTok to roll the cube on a more lenient end result, sources mentioned.
