Proposed $400 million settlement by TikTok and its parent company, ByteDance, with the US Justice Department hit a hurdle on Friday after a federal judge indicated he would reject part of the agreement.
TikTok and ByteDance agreed in August to settle allegations that the short-video app violated US children’s online privacy laws.
However, District Judge George H. Wu on Friday rejected a request to lift the 2019 consent decree on the short video platform, maintaining federal oversight of the app’s privacy practices.
The Federal Trade Commission originally imposed this decree in 2019 after settling a $5.7m children’s privacy case with Musical.ly, the predecessor to TikTok, requiring record-keeping obligations through 2029.
Under the $400 million settlement announced in August, ByteDance agreed to pay $300 million immediately, with an additional $100m contingent on the court terminating the decree.
Judge George wrote that the court “cannot determine that it constitutes a durable remedy”, tentatively denying the request because termination was not suitably tailored to the asserted change in circumstance.
In contrast to the US process, the European Commission is increasing supervision under the Digital Services Act, accusing TikTok of addictive design rather than removing oversight.
