TikTok’s ‘Unusual’ Kids Privacy Settlement Sidelines FTC Role – Bloomberg Law News
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The Federal Trade Commission pursued an aggressive, years-long case againstTikTok over its handling of children’s data. But when it came time to settle, the agency was nowhere to be seen.
Rather, the Justice Department emerged to announce late last month that it reached a $400 million settlement with the social media platform to resolve allegations it violated the Children’s Online Privacy Protection Act, putting an end to a six-year legal battle between the government and TikTok.
The FTC was not included in the DOJ’s announcement and wasn’t given any oversight powers — at least publicly — over TikTok’s compliance with the settlement terms, marking a stark departure from the role the agency has played in kids’ privacy cases up until now, industry professionals, attorneys, and former FTC staff said.
Whether the TikTok settlement will serve as a template for the flurry of privacy enforcement actions FTC Chairman Andrew Ferguson promised would drop this fall is unclear. Despite Ferguson’s vow earlier this year to make kids’ privacy a priority for his tenure of the agency — including via a $10 million settlement withWalt Disney Co. — the unusual circumstances surrounding the case’s resolution raise questions about the role the two agencies will play going forward, and which regulator will oversee companies’ compliance.
“The FTC has long taken the driver’s seat in oversight of social media companies and Big Tech companies,” said Cobun Zweifel-Keegan, managing director of IAPP, an organization for data and AI governance professionals.
“So it’s unusual in the overall landscape for one of these companies to not be subject to the extra scrutiny that comes with being under ongoing consent obligations,” he added. “And that puts TikTok in a unique position here.”
The FTC declined to answer questions about the agency’s role in the settlement — or discuss its absence from the DOJ’s announcement. The Justice Department didn’t reply to requests for comment.
The FTC played a central regulatory role in reining in the TikTok video platform.
Musical.ly Inc., the social video app now known as TikTok, had paid the FTC $5.7 million in 2019 to settle allegations it illegally collected personal information about kids and violated the Children’s Online Privacy Protection Act — at the time marking the largest civil penalty ever obtained by the agency in a kids’ privacy case.
Less than five years later, the DOJ under the Biden administration again sued the platform, now operating as TikTok, on behalf of the FTC, over new alleged violations of COPPA and the 2019 consent order. The FTC claimed TikTok had “knowingly and repeatedly violated kids’ privacy, threatening the safety of millions of children across the country.”
In announcing a settlement last month, DOJ didn’t explicitly mention the FTC’s allegations, and instead said TikTok had made “significant changes” to its “ownership, management, compliance functions, and privacy practices.” The platform in January established a new investor-controlled US entity, TikTok USDS Joint Venture LLC, to try and allay some of the longstanding national security concerns over Chinese data sharing.
The Justice Department said TikTok implemented “extensive measures” to strengthen protections for younger users, improve age-related controls, and bolster parental oversight. The press release came without a consent decree spelling out the terms TikTok and the government agreed to, a break from tradition that offered few takeaways for platforms watching.
“I was looking for what I thought would be a very detailed settlement with a fairly large monetary fine,” said Stacy Feuer, senior vice president at ESRB Privacy Certified, a self-regulatory body for the video game industry, who worked at the FTC for more than two decades until 2021. “What we got was somewhat different from that.”
As attorneys and companies await release of the consent order behind the $400 million fine, some are looking back at the FTC’s 2024 complaint against TikTok for insights.
The agency’s lawsuit had identified alleged violations at every step of a user’s experience on the platform, from when they created an account through off-boarding, said Amy Mushahwar, chair of the data privacy, security, safety and risk management practice at Lowenstein Sandler LLP.
“Does that consent decree have that same discipline of the user journey? Or might it not if the FTC and DOJ believe that sufficient portions of the journey have been fully remediated?” she said. “That would be the first thing that I’m looking for because, as a privacy compliance professional and advocate for clients, the most important thing that we’re all working on is provable data governance within a user journey.”
The settlement terms are even more relevant to privacy professionals in light ofMeta Platforms Inc. ‘s historic $18 billion settlement with state attorneys general over social media safety and privacy. The platform agreed to make a series of design changes including time limits, muted push notifications during school hours, and additional age verification measures. Meta called on YouTube and TikTok to enact similar measures.
“We’ll have to see whether the COPPA cases that Chair Ferguson hinted at for the second half of the year back in June materialize,” Feuer said, “and then see whether this TikTok settlement is a complete one-off or whether it does in fact provide clues about what we’re likely to see going forward in terms of overall COPPA practice.”
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Americas+1 212 318 2000
EMEA+44 20 7330 7500
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Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world
Americas+1 212 318 2000
EMEA+44 20 7330 7500
Asia Pacific+65 6212 1000
The Federal Trade Commission pursued an aggressive, years-long case against
Rather, the Justice Department emerged to announce late last month that it reached a $400 million settlement with the social media platform to resolve allegations it violated the Children’s Online Privacy Protection Act, putting an end to a six-year legal battle between the government and TikTok.
The FTC was not included in the DOJ’s announcement and wasn’t given any oversight powers — at least publicly — over TikTok’s compliance with the settlement terms, marking a stark departure from the role the agency has played in kids’ privacy cases up until now, industry professionals, attorneys, and former FTC staff said.
Whether the TikTok settlement will serve as a template for the flurry of privacy enforcement actions FTC Chairman Andrew Ferguson promised would drop this fall is unclear. Despite Ferguson’s vow earlier this year to make kids’ privacy a priority for his tenure of the agency — including via a $10 million settlement with
“The FTC has long taken the driver’s seat in oversight of social media companies and Big Tech companies,” said Cobun Zweifel-Keegan, managing director of IAPP, an organization for data and AI governance professionals.
“So it’s unusual in the overall landscape for one of these companies to not be subject to the extra scrutiny that comes with being under ongoing consent obligations,” he added. “And that puts TikTok in a unique position here.”
The FTC declined to answer questions about the agency’s role in the settlement — or discuss its absence from the DOJ’s announcement. The Justice Department didn’t reply to requests for comment.
The FTC played a central regulatory role in reining in the TikTok video platform.
Musical.ly Inc., the social video app now known as TikTok, had paid the FTC $5.7 million in 2019 to settle allegations it illegally collected personal information about kids and violated the Children’s Online Privacy Protection Act — at the time marking the largest civil penalty ever obtained by the agency in a kids’ privacy case.
Less than five years later, the DOJ under the Biden administration again sued the platform, now operating as TikTok, on behalf of the FTC, over new alleged violations of COPPA and the 2019 consent order. The FTC claimed TikTok had “knowingly and repeatedly violated kids’ privacy, threatening the safety of millions of children across the country.”
In announcing a settlement last month, DOJ didn’t explicitly mention the FTC’s allegations, and instead said TikTok had made “significant changes” to its “ownership, management, compliance functions, and privacy practices.” The platform in January established a new investor-controlled US entity, TikTok USDS Joint Venture LLC, to try and allay some of the longstanding national security concerns over Chinese data sharing.
The Justice Department said TikTok implemented “extensive measures” to strengthen protections for younger users, improve age-related controls, and bolster parental oversight. The press release came without a consent decree spelling out the terms TikTok and the government agreed to, a break from tradition that offered few takeaways for platforms watching.
“I was looking for what I thought would be a very detailed settlement with a fairly large monetary fine,” said Stacy Feuer, senior vice president at ESRB Privacy Certified, a self-regulatory body for the video game industry, who worked at the FTC for more than two decades until 2021. “What we got was somewhat different from that.”
As attorneys and companies await release of the consent order behind the $400 million fine, some are looking back at the FTC’s 2024 complaint against TikTok for insights.
The agency’s lawsuit had identified alleged violations at every step of a user’s experience on the platform, from when they created an account through off-boarding, said Amy Mushahwar, chair of the data privacy, security, safety and risk management practice at Lowenstein Sandler LLP.
“Does that consent decree have that same discipline of the user journey? Or might it not if the FTC and DOJ believe that sufficient portions of the journey have been fully remediated?” she said. “That would be the first thing that I’m looking for because, as a privacy compliance professional and advocate for clients, the most important thing that we’re all working on is provable data governance within a user journey.”
The settlement terms are even more relevant to privacy professionals in light of
“We’ll have to see whether the COPPA cases that Chair Ferguson hinted at for the second half of the year back in June materialize,” Feuer said, “and then see whether this TikTok settlement is a complete one-off or whether it does in fact provide clues about what we’re likely to see going forward in terms of overall COPPA practice.”
Bloomberg Law provides trusted coverage of current events enhanced with legal analysis.
Log in to keep reading or access research tools and resources.
source
This article was autogenerated from a news feed from CDO TIMES selected high quality news and research sources. There was no editorial review conducted beyond that by CDO TIMES staff. Need help with any of the topics in our articles? Schedule your free CDO TIMES Tech Navigator call today to stay ahead of the curve and gain insider advantages to propel your business!
