The Justice Department’s recent $400 million settlement with TikTok over child privacy allegations has raised eyebrows among insiders in Washington, primarily due to its relatively lenient terms and the surprising lack of clarity regarding how this resolution came about. The announcement, made on a Friday afternoon — a time often chosen for news that might otherwise fly under the radar — revealed that TikTok would pay $300 million to settle claims of unlawfully collecting data from users younger than 13.
What surprised many involved in the negotiations was that the DOJ also decided to revoke a 2019 consent order that had mandated strict oversight of TikTok’s data practices, and this came with an additional $100 million settlement. Typically, when consent decrees are coming to an end, federal agencies use a structured process that includes clear explanations of payment calculations, as pointed out by Bill Kovacic, a former chair of the Federal Trade Commission. He questioned how the settlement figure was derived, given the usual penalties associated with such violations — typically based on the number of infractions and their associated fines. “You would want to see the math,” he noted, emphasizing that the public is usually entitled to understand these numbers.
It’s striking to compare the $400 million TikTok settlement with the $18 billion agreement reached by a coalition of state attorneys general with Meta, which also set daily limits on children’s social media use. Violations of the Children’s Online Privacy Act (COPPA) can incur fines as high as $53,088 for each violation, yet the DOJ didn’t provide specifics on how they reached the $400 million figure, especially when penalties could potentially soar into the tens of billions.
A senior official at the DOJ mentioned that the settlement was the result of extensive discussions on how many actual violations occurred. The settlement amount was reportedly based on an analysis of the DOJ’s top five past COPPA settlements and was linked to a precise number of TikTok’s violations, though those details weren’t immediately available.
Initially, TikTok was rumored to have agreed to a $1 billion settlement over kids’ privacy violations in private talks with the FTC earlier this year. However, those discussions fell apart due to concerns within the Biden administration regarding their implications on ongoing efforts to potentially legislate a ban on TikTok.
The DOJ filed a lawsuit against TikTok in August 2024 after findings from the FTC suggested that the company neglected to enforce age restrictions, allowing millions of children to access the app. Some findings might not have made it into the key proceedings, indicating that there were substantial concerns about the potential risks posed by TikTok’s practices, including exposing users’ personal data to its employees in China.
Notably, the DOJ’s lawsuit contained serious allegations—such as TikTok ignoring parental requests to delete accounts for underage users. It was also claimed that moderation of flagged accounts was alarmingly quick, averaging just five to seven seconds.
In arguing to vacate the original consent order, the DOJ stated that TikTok has undergone significant shifts in management, ownership, and its overall approach to compliance and privacy practices. They claimed that these changes warranted a reevaluation of the consent order, which had originally been imposed on Musically, a predecessor to TikTok.
A recent court filing by US District Judge George Wu pointed out that neither the DOJ nor TikTok had fully detailed the settlement’s terms, leaving the court curious about the unexpectedly swift resolution. Meanwhile, the DOJ’s associate attorney general hailed the agreement as a significant triumph for American children and their parents, arguing it would provide stronger safeguards without the prolonged uncertainty of litigation.
Critics have since labeled this settlement another missed opportunity to hold TikTok fully accountable for the risks it poses to children, a sentiment echoed by watchdog groups. Fairplay, a group focused on online safety, expressed disappointment with the outcome, pointing out that, unlike the Meta settlement, the agreement with TikTok imposes no new obligations and could potentially relieve the company from compliance requirements stated in the original consent decree.
Nevertheless, a DOJ official defended the agreement, stating that the $400 million would go directly to the U.S. Treasury, distinguishing it from state programs. They highlighted that TikTok has made commendable progress in its data handling practices since the initial lawsuit.
In the context of the broader situation, it’s worth noting that a consortium of investors, including Oracle and several U.S. firms, acquired a majority stake in TikTok amidst past national security concerns. This deal aimed to address fears regarding how the app could be misused by its Chinese parent company, ByteDance, which maintains a minority stake in the new venture.
