DOJ dismisses allegations that TikTok misled US consumers

TThe U.S. Department of Justice will not pursue allegations that ByteDance Ltd.’s TikTok misled U.S. consumers about the security of their data in a lawsuit that will accuse the company of violations of children’s privacy, according to people familiar with the matter. with the decision.

The department is preparing to file a consumer protection lawsuit against TikTok later this year on behalf of the U.S. Federal Trade Commission (FTC), which investigated the case, according to the people, who asked not to be identified discussing communications. between agencies.

The FTC gave the Department of Justice a two-part referral. The Justice Department plans to withdraw part of the complaint alleging that TikTok misled U.S. consumers by failing to inform them that employees of its Beijing-based parent company, ByteDance, would have access to their personal and financial information. said the people. The DOJ plans to pursue allegations that the company violated the Children’s Online Privacy Protection Act, which prohibits the collection of 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 this would ban TikTok unless it was sold within a year. The company is challenging the law in court.

The department declined to comment on the decision to drop allegations that TikTok misled consumers about data privacy. The FTC declined to comment on the DOJ’s decision.

When the Department of Justice represents another agency in court, it has the authority to determine the best litigation strategy to ensure there are no conflicts with national security issues or other cases.

“Consistent with our normal approach, the Department of Justice consulted with the FTC prior to this referral and will continue to do so as we consider the claims,” said spokesman Terrence Clark. “As always, the department will be guided by the facts and the law, as well as our responsibility to protect the American people.”

When the FTC seeks monetary sanctions – such as when a company violates a settlement agreement – ​​it must refer the matter to the Department of Justice for litigation. The same applies to cases that the FTC investigates under federal consumer protection laws related to children’s online privacy.

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

TikTok in 2019 paid US$5.7 million to resolve similar allegations by the FTC that it had illegally collected personal information from children. As part of this, the company agreed to provide the agency with annual reports on data collection and compliance with the agreement. These reports helped lead to the current case.

The DOJ’s Department of Consumer Protection has 45 days from the time the FTC makes the referral to decide whether to litigate or send the case back to the FTC. The Department of Justice almost always chooses to take on the case because it can withhold up to 3% of the civil penalties it collects.

At the beginning of this year, the FTC asked Congress to change the law and allow him to litigate his own cases, saying the process for referring cases to the Justice Department is “seriously broken.”