DOJ Withdraws Allegations That TikTok Deceived US Users in Lawsuit

US Justice Department Drops Some Allegations Against TikTok

The United States Justice Department will not pursue allegations that ByteDance Ltd.’s TikTok misled American consumers about the security of their data in an upcoming lawsuit focused on children’s privacy violations. The anticipated suit, spearheaded by the US Federal Trade Commission (FTC), will still address concerns under the Children’s Online Privacy Protection Act (COPPA), specifically regarding the illegal data collection from underaged users.

This decision comes within a climate of heightened scrutiny over TikTok’s data practices and its connections to its Beijing-based parent company, ByteDance, and the Chinese government. Earlier this year, President Joe Biden enacted legislation that would prohibit TikTok unless it undergoes a sale within a year, a law currently being challenged by the company in court.

Focus Narrowed on Children’s Privacy

The Justice Department evaluated a referral from the FTC that contained two key components. The first alleged that TikTok failed to inform US consumers that ByteDance’s Beijing employees would have access to their personal and financial data. The department has opted to drop this allegation. However, it will advance claims that TikTok violated COPPA by collecting data from children under the age of 13 without proper consent.

Officials from both the Justice Department and the FTC have declined to comment on the specifics of the decision. Traditionally, when representing another agency in court, the Justice Department has the discretion to prioritize litigation strategies that align with national security and other case considerations. Terrence Clark, a spokesman for the department, emphasized their commitment to facts, law, and the protection of American citizens in guiding these decisions.

FTC's Role in Consumer Protection

The FTC has a history of penalizing companies over privacy and data breaches, and it’s commonplace for the FTC to refer cases involving potential monetary penalties to the Justice Department. This situation is no different, with the current case stemming from previous allegations settled by TikTok in 2019, where the company paid $5.7 million for improperly collecting children’s data.

Interestingly, the FTC made its referral public on June 18, a step not typically taken in such proceedings. Reports provided by TikTok as part of the 2019 settlement prompted the current litigation, highlighting ongoing concerns about the company's compliance with data protection regulations.

Internal Agency Tensions

This case is not singular in the tensions arising between the FTC and the Justice Department over consumer protection litigation. Similar discord has been seen in cases involving Amazon.com Inc. and Meta Platforms Inc. The stakes in these litigations are high, and the Justice Department's involvement often extends the impact of the suits owing to their ability to retain a portion of the civil penalties collected. The FTC has even gone so far as to request that Congress amend the existing law to permit the agency to litigate its own cases, citing the inefficiency of the referral system as "badly broken."

As the DOJ's Consumer Protection Branch grapples with this referral, it will continue to collaborate with the FTC to address these pressing issues. The resolution of this case will not only shape TikTok's future operations in the US but may also set precedents for how child data privacy is managed and litigated at the federal level.