DOJ Drops Claims That TikTok Misled US Consumers in Lawsuit

The US Justice Department is dropping one of two proposed claims against ByteDance Ltd.’s TikTok, planning to focus a consumer protection lawsuit later this year on children’s privacy instead of allegations the video-sharing platform misled consumers about their data security.

Bloomberg
Published21 Jun 2024, 11:06 PM IST
DOJ Drops Claims That TikTok Misled US Consumers in Lawsuit
DOJ Drops Claims That TikTok Misled US Consumers in Lawsuit

The US Justice Department is dropping one of two proposed claims against ByteDance Ltd.’s TikTok, planning to focus a consumer protection lawsuit later this year on children’s privacy instead of allegations the video-sharing platform misled consumers about their data security.

The department is preparing to file the lawsuit on behalf of the US Federal Trade Commission, which investigated the case, according to people familiar with the matter, who asked not to be identified discussing interagency communications.

The FTC gave the Justice Department a referral with two parts. The department plans to drop one part of the complaint alleging that TikTok deceived US consumers by failing to inform them that Beijing-based employees of its parent company, ByteDance, would have access to their personal and financial information, the people said. The DOJ plans to proceed with allegations the company violated the Children’s Online Privacy Protection Act, which bars collecting data about children under the age of 13.

TikTok has faced enormous scrutiny over the security of user data and ties between its parent company, ByteDance, and the Chinese government. President Joe Biden in April signed a law that would ban TikTok unless it is sold within a year. The company is challenging the law in the courts.

The FTC declined to comment on the DOJ’s decision.

“The Justice Department cannot comment on the substance of the referral from the FTC against TikTok,” said DOJ spokesman Terrence Clark. “Consistent with our normal approach, the Department consulted with FTC in advance of this referral and will continue that consultation going forward.”

The Justice Department, which is litigating against TikTok in the D.C. Circuit, “is uniquely situated to evaluate the best ways to hold TikTok accountable for the violations of law alleged here while also ensuring that this case does not interfere with other proceedings raising critical national security issues,” Clark added. 

When the FTC seeks monetary penalties — such as when a firm violates a settlement agreement — it must refer the matter to the Justice Department for litigation. The same goes for cases the FTC investigates under federal consumer protection laws related to children’s online privacy.

The FTC recommended the agency sue TikTok over the two violations and took the unusual step of making its referral public on June 18. The FTC and Justice Department have been at odds over recent consumer protection cases involving Amazon.com Inc. and Meta Platforms Inc. 

For more: TikTok Argues US Disregarded National Security Plans Before Ban

TikTok in 2019 paid $5.7 million to settle similar FTC allegations that it had illegally collected personal information from children. As part of that, the company agreed to provide annual reports to the agency about its data collection and compliance with the settlement. Those reports helped lead to the current case.

The DOJ’s Consumer Protection Branch has 45 days from when the FTC makes a referral to decide whether it wishes to litigate or send the case back to the FTC. The Justice Department almost always opts to take charge of the case as it can retain as much as 3% of the civil penalties it collects. 

Earlier this year, the FTC asked Congress to amend the law and allow it to litigate its own cases, saying the process for referring cases to the Justice Department is “badly broken.”

With assistance from Emily Birnbaum.

This article was generated from an automated news agency feed without modifications to text.

Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.MoreLess
First Published:21 Jun 2024, 11:06 PM IST
HomeNewsWorldDOJ Drops Claims That TikTok Misled US Consumers in Lawsuit

Get Instant Loan up to ₹10 Lakh!

  • Employment Type

    Most Active Stocks

    Tata Steel

    157.75
    03:43 PM | 19 JUL 2024
    -8.6 (-5.17%)

    Tata Power

    414.15
    03:59 PM | 19 JUL 2024
    -15.85 (-3.69%)

    Bharat Electronics

    306.30
    03:45 PM | 19 JUL 2024
    -7.2 (-2.3%)

    Zee Entertainment Enterprises

    137.55
    03:57 PM | 19 JUL 2024
    -4.9 (-3.44%)
    More Active Stocks

    Market Snapshot

    • Top Gainers
    • Top Losers
    • 52 Week High

    Tata Teleservices Maharashtra

    102.11
    03:59 PM | 19 JUL 2024
    4.68 (4.8%)

    Rail Vikas Nigam

    614.00
    03:59 PM | 19 JUL 2024
    27.65 (4.72%)

    Jubilant Pharmova

    752.25
    03:43 PM | 19 JUL 2024
    25.3 (3.48%)

    One 97 Communications

    458.70
    03:55 PM | 19 JUL 2024
    13.65 (3.07%)
    More from Top Gainers

    Recommended For You

      More Recommendations

      Gold Prices

      • 24K
      • 22K
      Bangalore
      74,925.00-1,347.00
      Chennai
      74,558.00-1,566.00
      Delhi
      75,144.00-389.00
      Kolkata
      74,558.00-531.00

      Fuel Price

      • Petrol
      • Diesel
      Bangalore
      102.86/L0.00
      Chennai
      100.75/L-0.01
      Kolkata
      104.95/L0.00
      New Delhi
      94.72/L0.00
      OPEN IN APP
      HomeMarketsPremiumInstant LoanBudget