$100M of TikTok's Privacy Deal in Doubt as Judge Keeps 2019 Order

A federal judge in Los Angeles has tentatively refused to lift the 2019 order that governs how TikTok handles data from children under 13, leaving $100 million of the company's $400 million privacy settlement with the U.S. Justice Department in limbo. U.S. District Judge George H. Wu, of the Central District of California, issued the tentative ruling on Friday, September 18, according to Reuters and Bloomberg.

The order at issue is old. The Federal Trade Commission announced in February 2019 that the operators of Musical.ly — the lip-syncing app ByteDance bought and folded into TikTok — would pay $5.7 million over allegations they illegally collected personal information from children. "The operators of Musical.ly—now known as TikTok—knew many children were using the app but they still failed to seek parental consent before collecting names, email addresses, and other personal information from users under the age of 13," then-FTC Chairman Joe Simons said at the time. The agency called it the largest civil penalty it had ever obtained in a children's privacy case. Reuters reports the resulting consent decree binds TikTok to certain reporting and record-keeping obligations through 2029.

That decree is why this ruling matters now. In August, TikTok and ByteDance agreed to pay $400 million to settle a 2024 Justice Department lawsuit accusing them of failing to protect children's privacy. Reuters reports $300 million was payable immediately and a further $100 million only if a court terminated the 2019 decree. The government argued TikTok had changed substantially since the suit was filed — in ownership structure, management, compliance functions and privacy practices. Wu was unconvinced. "The Government has not shown that the changes in TikTok's ownership, the changes to the platform's compliance measures, or the recent settlement warrant termination" of the original order, he wrote, in a passage quoted by Bloomberg. Reuters quotes him saying the court "cannot determine that it constitutes a durable remedy or that termination is suitably tailored to the asserted change in circumstance."

For users, the practical effect is continuity of oversight. Bloomberg reports Wu said he intends to keep supervising the company's privacy practices — meaning a federal court and the FTC retain a formal check on how TikTok handles under-13 data, independent of the January agreement under which ByteDance set up a majority American-owned joint venture to hold US user data. Reuters describes TikTok as an app used by more than 200 million Americans.

Nothing is settled yet. This is a tentative ruling issued ahead of argument, and Wu can revise it: Reuters says he scheduled a hearing for Monday, and Bloomberg dates that hearing to September 21. TikTok's US joint venture said in a court filing that it now requires every user to enter a date of birth and has built age-moderation systems to flag under-13 users who misstate their age, Reuters reports. Neither TikTok nor the Justice Department responded to requests for comment from either news organisation.