The Justice Department has reached a settlement with TikTok that will require the company to pay $400 million to resolve a lawsuit accusing it of violating child privacy laws. The agreement stems from a 2024 lawsuit filed by the Biden administration, which alleged that TikTok violated an earlier Federal Trade Commission settlement related to its acquisition of Musical.ly. The government also claimed the app broke the Children's Online Privacy Protection Act by letting children under 13 create accounts and by improperly collecting data from users in "Kids Mode." Additionally, the Justice Department said TikTok frequently failed to honor parental requests to delete children's data.
Under the terms of the settlement, TikTok will pay $300 million immediately, with another $100 million due after its prior agreement with the FTC is vacated, according to the Justice Department. The department noted that TikTok has since made significant changes to its ownership, management, and privacy practices. The company finalized a deal earlier this year that created a new entity for its U.S. business, known as TikTok USDS Joint Venture, which is controlled by a group of investors including Oracle, Silver Lake, and MGX. ByteDance retained a 19.9 percent stake in the new company.
In announcing the settlement, the Justice Department said the company has implemented extensive measures to strengthen safeguards for younger users, improve age-related controls, and enhance parental oversight. The department stated that these developments have materially advanced the public interests behind the litigation and have strengthened protections for millions of American families. TikTok and ByteDance did not immediately respond to requests for comment.
The case dates back to the 2024 lawsuit brought by then-President Joe Biden's Justice Department. The government's complaint centered on TikTok's handling of child data and its compliance with a prior FTC settlement tied to the Musical.ly acquisition. The Justice Department's latest statement acknowledged that the app has undergone significant changes to its ownership, management, compliance functions, and privacy practices since the suit was filed.
The settlement marks the latest hurdle cleared by the company after years of intense scrutiny over its privacy practices and ties to China. Earlier this month, the Office of Management and Budget officially cleared the way for federal workers to once again use the app after a 2022 law banned it from most government-issued devices. The resolution of the child privacy case removes another legal threat as the company continues to navigate its U.S. operations under the new joint venture structure.
For American families, the settlement signals a formal end to the federal government's allegations regarding underage account creation and data handling. The Justice Department's acknowledgment of TikTok's reforms suggests the company has addressed the core issues raised in the lawsuit. The financial penalty, combined with the structural changes to the U.S. business, represents the latest chapter in the app's efforts to operate within U.S. regulatory requirements.
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