TikTok parent company ByteDance has agreed to a $ 92 million deal to settle class action lawsuits alleging the company illegally collected and used the personal information of underage TikTok users.
The proposed settlement (PDF) would require TikTok to pay out up to $ 92 million to members of the class and change some of its data collection processes and disclosures in the future.
The lawsuit, which summarized more than 20 lawsuits, most of which were filed on behalf of minors, alleged that TikTok's use of data violated both federal and federal data protection laws, including the Computer Fraud Act and abuse as well as the law on the protection and protection of videos.
TikTok uses "automated software, proprietary algorithms, AI, facial recognition and other technologies to benefit commercially from its users," says the complaint (PDF). The data that TikTok allegedly collects, shares and uses for machine learning goes surprisingly deep, including "user identity", unique identifying information, biometric data and information, images, video and digital recordings, audio recordings, clipboard data, geolocation, names, Email addresses, passwords, social media accounts, messaging services, phone numbers, and other private, non-public, or confidential data and information. "
In addition, the lawsuit cited concerns that private and personally identifiable user data collected by TikTok could be disclosed to Chinese government agencies, reflecting the concerns of the Trump administration in its failed attempts to ban TikTok from operating in the United States.
TikTok denied any specific wrongdoing. "While we disagree with the allegations instead of engaging in lengthy litigation, we want to focus our efforts on creating a safe and fun experience for the TikTok community," the company said in a statement.
Money for taking – unless everyone asks
Lawyers representing the plaintiffs hailed the settlement in such a case as "one of the greatest ever reached". In so far as their assertion is true, it is far more damaging to the state of US data protection laws than it is complementary to this particular case.
The total class defined in the agreement includes 89 million US users. The attorneys are demanding a collective payment "not exceeding 33.33% of the settlement fund" so that class members can confiscate $ 61 million. Additionally, however, the proposed deal is structured so that any member of the "national" class can claim one share and Illinois users can claim six shares.
TikTok identified 1.4 million users who would qualify for the Illinois subclass, leaving about 87.6 million other class members nationwide. According to the comparison, most users could expect to reap around $ 0.96 if every qualified member of the class made a claim, and Illinois users could get up to $ 5.75.
In the filing, however, the attorneys make it clear that they don't expect a high percentage of the class to file claims, but rather describe the likely payouts for hypothetical claim rates of 1.5 percent ($ 383.33 for Illinois, $ 63.89 for all others) to 20 percent ($ 28.75 for Illinois $ 4.79 for everyone else) of the class.
Money is not everything, of course; Lawsuits like this class action are often also aimed at injunctive relief – that is, the company no longer has to do the bad. This agreement is no different. Under the proposed terms, TikTok will conduct a "company-wide privacy training initiative" to instruct employees and contractors to comply with data protection laws.
A judge must approve the proposed settlement before it goes into effect. The process is expected to take several months.