The United States Department of Justice and TikTok have reached an agreement under which the short video platform will pay 400 million dollars as compensation in the pending case in which the company was accused of violating the privacy of minors.
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Justice had filed a lawsuit in 2024 against TikTok and its then parent company, the Chinese ByteDance, accusing them of failing to protect the privacy of minors and collecting their data illegally, in violation of the Children’s Online Privacy Protection Act. That law requires companies that provide services to children to obtain parental consent if they want to store personal data of children under thirteen years old.
The U.S. government alleged that the platform, and its predecessor, Musical.ly, allowed children under thirteen to create accounts and did not close them or delete the data in cases where parents requested it. “This agreement represents an important victory for American children and parents,” said Deputy Attorney General Stanley Woodward in a statement.
TikTok will pay 300 million dollars immediately and the remaining one hundred million once the Department of Justice has withdrawn its lawsuit against the now-defunct Musical.ly, according to the U.S. government. “The Department’s priority is to ensure that children are protected online and that companies that obtain their personal data comply with their legal obligations,” Woodward also noted.
“This resolution achieves substantial compensation while strengthening the protections that families demand and deserve,” added the Deputy Attorney General. In the statement, the Department of Justice clarifies that since the lawsuit was filed two years ago, TikTok has completed “significant changes in its ownership, management, compliance with its obligations, and privacy practices.”
The White House forced TikTok’s parent company last year to sell its U.S. subsidiary to investors from this country, after two years of threats to ban the platform’s operations within the country. A law pushed by the administration of Democrat Joe Biden and approved in 2024 required ByteDance to divest from the lucrative platform or resign itself to its closure. The lawmakers who approved the measure believed that the company’s Chinese ownership could pose a threat because Beijing could access U.S. user data and use it to manipulate the population or promote propaganda narratives within the platform’s content.
TikTok took the case to court and the Supreme Court sided with the government. In fact, the platform was suspended for a few hours on the eve of Trump’s inauguration on January 20, 2025. But the Republican, after a phone call with Chinese President Xi Jinping, lifted the ban and extended deadlines so the app could remain operational in U.S. territory while negotiations for the sale to businessmen aligned with the new administration were underway. Finally, the definitive agreement, which included a payment of a commission to the U.S. government worth 10 billion dollars, was reached in March of this year.
Tech magnate Larry Ellison, owner of Oracle, is one of the investors who acquired TikTok’s U.S. subsidiary. He holds direct stakes and through the tech giant he founded in the late seventies in Santa Clara (California). Ellison is a friend and donor to Trump’s campaigns. Also involved are the private equity firm Silver Lake, businessman Michael Dell and the tech company bearing his name, and Abu Dhabi investor MGX, with whom the Trump business conglomerate maintains relations.
That agreement requires the new U.S. owners to share the profits they obtain from managing the video content platform with its former owner, the Chinese ByteDance, which retains 20% of the capital but is not part of the management.