TikTok will pay the US $400 million to settle a children's privacy case, and nobody admitted liability

The U.S. Department of Justice announced on Friday that TikTok, ByteDance and affiliated companies will pay $400 million to settle a lawsuit over the Children's Online Privacy Protection Act. TikTok will pay $300 million now and another $100 million after a court vacates a 2019 consent decree against Musical.ly, the app ByteDance bought and folded into TikTok. The department called it one of the largest recoveries ever in a COPPA case. The claims, it added, are allegations only, and there has been no finding of liability.

The lawsuit was filed in August 2024, under the Biden administration, jointly with the Federal Trade Commission in the Central District of California. Prosecutors said TikTok let children create ordinary accounts, post videos and message adults, and collected a wide range of personal information without telling parents or getting their consent. COPPA bars sites from gathering personal data from children under 13 without that consent. Even accounts created in a Kids Mode, the government said at the time, took email addresses and other details.

Since 2024 the company has changed owners, managers and some of its privacy settings. In January, under a Trump-brokered deal, ByteDance sold a majority of TikTok's U.S. business to non-Chinese investors including Oracle, Silver Lake and Abu Dhabi's MGX, and kept 19.9 percent. The department said the new age controls and parental tools had already advanced the public interest, which is why it settled rather than keep litigating. In 2019 Musical.ly paid $5.7 million over the same statute. The FTC then called that the largest civil penalty in a children's privacy case.

Associate Attorney General Stanley E. Woodward Jr. said the settlement was "a major victory for American children and parents." TikTok did not immediately comment. ABC News reported in May that officials had discussed routing a TikTok settlement into Trump's Washington "beautification" plans, including a proposed triumphal arch. The Justice Department did not say on Friday where the money will go.

TikTok has been banned in India since 2020, so this is not an app story for readers here. It is a data story, and it is a money story. A $5.7 million fine in 2019 did not change the product enough to avoid a 2024 lawsuit. A $400 million cheque, with no admission, might not either. The part I would watch is the destination of the cash. If a children's privacy recovery is spent on an arch, the parents who were supposed to be the point of COPPA will have paid for marble.

The $100 million tranche waits on a court order wiping the Musical.ly decree. Watch where the $300 million is booked, and whether the FTC treats the new ownership as a clean slate or as the same company with a new letterhead.