RESOLVING THE LEDGER
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The Justice Department and TikTok , along with parent company ByteDance , have reached a $400 million settlement to resolve allegations of violating children's online privacy laws, per an announcement first shared with Axios.
Why it matters: The Biden administration's DOJ first filed the suit in 2024. TikTok will clear the allegations it violated the Children's Online Privacy Act by paying a total of $400 million, without undergoing further litigation or admitting wrongdoing.
Since the lawsuit was filed, "TikTok has undergone significant changes to its ownership, management, compliance functions, and privacy practices," per the DOJ release.
The settlement is one of the largest recoveries ever obtained in a case under the privacy law, the DOJ release states.
What they're saying: "This settlement is a major victory for American children and parents," associate attorney general Stanley Woodward said in the release.
"The Department's priority is ensuring that children are protected online and that companies entrusted with their personal information meet their legal obligations. This resolution secures a substantial recovery while reinforcing the protections that families expect and deserve."
The DOJ maintains that TikTok's adjustments since 2024 have "materially advanced the public interests underlying" the DOJ's original suit and "strengthened protections for millions of American families."
The changes as part of the settlement negotiations included stronger safeguards for youths, better age-related controls, and measures to allow parents to provide more oversight, per DOJ.
Flashback: When DOJ filed the lawsuit in 2024 under former attorney general Merrick Garland, along with the Federal Trade Commission, the government accused TikTok of violating a previous consent order from 2019 in a number of ways, including:
"Knowingly permitting children to create regular TikTok accounts and to create, view, and share short-form videos and messages with adults and others on the regular TikTok platform."
Unlawfully collecting and retaining children's email addresses and other personal information.
The big picture: TikTok was saved by the Trump administration multiple times after a divest-or-ban law passed and was upheld by the Supreme Court.
After delayed enforcement, a U.S. joint venture allowed the app to continue operating in the U.S. without a ban.
The bottom line: That's two wins for TikTok under Trump 2.0. The settlement may be expensive, but it's better for the company than continued litigation with DOJ.
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