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TikTok agrees to settle $92 million lawsuit

February 27, 2021

Chinese-owned TikTok will pay $92 million to settle a cluster of lawsuits accusing the company of violating user privacy. Attorneys believe the settlement was reached due to pressure by US officials to sell TikTok.

This photo illustration, the social media application logo, TikTok is displayed on the screen of an iPhone on an American flag background
TikTok is immensely popular in the US, with an estimated 100 million users in the country.Image: Olivier Douliery/AFP/Getty Images

TikTok's parent company, ByteDance, has agreed to pay $92 million (€76.2 million) to settle a class-action lawsuit alleging a breach of privacy of its users.

A legal filing in the US District Court of Illinois on Friday urged the judge to approve the settlement, which also includes TikTok being more open about the data it gathers from users and training its employees about user privacy.

The China-based company that owns TikTok, a short-video sharing app, agreed to settle after more than a year of litigation.

"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," TikTok said in an emailed statement on Thursday.

The settlement was reached after "an expert-led inside look at TikTok's source code" and extensive mediation efforts, according to the motion seeking approval of the settlement.

Illinois is the only US state that allows people to seek monetary damages for such authorized collection of data.

What were the allegations?

"The TikTok app 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," Illinois attorneys said in a filing.

The lawsuit alleged that TikTok violated the Illinois biometric privacy law, which allows suits against companies that glean consumer data without consent, including via facial and fingerprint scanning.

Attorneys also accused TikTok of storing or sending data to China where ByteDance is headquartered.

TikTok has denied any misuse of data, insisting that it leaves the data on users' devices and only uses anonymous markers to detect faces, the company said in legal paperwork.

US government pressure

Attorneys told the judge that ByteDance had been motivated to settle due to pressure by US officials to sell TikTok.

US President Joe Biden has abandoned plans by his predecessor to sell TikTok to US giant Oracle. Trump had accused TikTok and other Chinese apps of posing a national security risk due to its alleged ties with the Beijing government. His executive actions to ban downloads of TikTok ran into legal challenges

TikTok defended itself against these allegations saying it stores user information on servers in the US and Singapore.

The video-sharing app is immensely popular in the US, with an estimated 100 million users in the country.

Attorneys estimated that the settlement would apply to TikTok users in the US. Most of them would be eligible for pay-outs of 96 cents each if they all filed claims for settlement money, they said in a filing.

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adi/sms (AFP, Reuters)