TikTok parent ByteDance has agreed to settle a class action suit for $92 million. The popular short-form video app allows users to take 15-second or one minute videos (by stringing together four 15-second clips). Popular with teens, content usually includes pranks, lip syncing, dancing, and more. According to the lawsuit, TikTok “infiltrates its users’ devices and extracts a broad array of private data including biometric data and content that defendants use to track and profile TikTok users for the purpose of, among other things, ad targeting and profit.” In other words, the court documents accuse ByteDance of using TikTok to collect user data from its teenage users.
The settlement still requires approval from the court. In a statement, TikTok said, “While we disagree with the assertions, rather than go through lengthy litigation, we’d like to focus our efforts on building a safe and joyful experience for the TikTok community.” The settlement was reached after “an expert-led inside look at TikTok’s source code” according to the motion presented to the court in an attempt to get the settlement approved. The settlement of the class-action suit, filed in the U.S. District Court for the Northern District of Illinois, could end arguments over whether the app illegally collected personal data from minors including facial scans. The suit was a collection of 21 separate class-action suits that were filed for teen TikTok users and those even younger. The youngest plaintiff was 8 years old.
The plaintiff’s attorneys argued that by collecting personal data, ByteDance was able to collect biometric data allowing it to deliver more precisely targeted ads and content recommendations. In the state of Illinois, collecting this data without consent could expose ByteDance to serious punishment. As an example, last year Facebook settled a case under the same Illinois’ biometric privacy law for $650 million. The plaintiffs also charged ByteDance with storing personal data in China which might have allowed the Communist Chinese government to view it.
Last year, the Trump administration tried to force ByteDance to sell part of TikTok to U.S. companies such as Microsoft, Twitter, Walmart, and Oracle. The plan called for the creation of a new American company that would be owned by ByteDance and some U.S. firms. Among those stateside companies that showed an interest in TikTok were Microsoft, Twitter, Walmart, and Oracle. When Joe Biden won the presidential election on November 3rd, former President Donald Trump seemed to give up interest in going after TikTok. On November 12th, the U.S. Commerce Department said it would no longer enforce its order that would have forced TikTok to shut down in the states by banning American companies from hosting the site and delivering content to the app. The anti-TikTok hysteria started last summer when then Secretary of State Mike Pompeo first mentioned a possible U.S. ban to the media.
As of the first week of this month, TikTok is estimated to have 80 million monthly users in the United States according to Wallaroo. 60% are female, 40% are male. Those age 16 through 24 make up 60% of stateside TikTok users while 26% are 25 through 44 years old. 80% of users fit in the range of 16 to 34 in age while 60% of American TikTok users are Gen Zers. The app reportedly grossed $500 million from the U.S. alone last year.
Globally, an estimated 1.1 billion people use TikTok each month. Sensor Tower states that the number of downloads of the TikTok app world wide is 2.6 billion. Last month, the app generated 62 million installs globally; just a year earlier, TikTok set a record for an app during a quarter with 315 million downloads. Allegedly, the app has been paying influencers $500 to open an account.
With a new administration in place, things look rosier for TikTok in the states even though President Biden has not commented on whether he will continue to treat Chinese tech firms as national security threats.