The US Justice Department is streamlining its legal approach against TikTok, the popular video-sharing platform owned by ByteDance, by withdrawing one of its two planned claims. The focus will now be on a forthcoming consumer protection lawsuit centered on violations of children’s privacy, rather than on accusations that TikTok misrepresented the security of user data.
The lawsuit, which is being prepared on behalf of the US Federal Trade Commission (FTC) following their investigation, is expected to be filed later this year. Sources familiar with the internal discussions, who requested anonymity, revealed that the FTC’s referral to the Justice Department contained two parts.
The Justice Department has decided to forgo the part of the complaint that accuses TikTok of deceiving US consumers about the potential access of Beijing-based ByteDance employees to their personal and financial information. Instead, the DOJ will pursue claims that TikTok breached the Children’s Online Privacy Protection Act (COPPA), which prohibits the collection of data from children under 13 without parental consent.
TikTok has been under intense scrutiny regarding the safeguarding of user data and its parent company’s alleged connections to the Chinese government. In response to these concerns, President Joe Biden signed legislation in April mandating TikTok’s sale within a year or face a ban, a decision TikTok is currently contesting in court.
The Justice Department has refrained from commenting on its decision to drop the data privacy allegations, and the FTC has also declined to comment on the DOJ’s choice. When representing another agency in court, the Justice Department is responsible for determining the most effective litigation strategy, ensuring alignment with national security and other legal matters.
Justice Department spokesman Terrence Clark stated that the department consulted with the FTC before the referral and will continue to do so, emphasizing that the department’s actions will be driven by facts, law, and the duty to protect Americans.
For cases involving monetary penalties or violations of federal consumer protection laws related to children’s online privacy, the FTC must refer the matter to the Justice Department for litigation.
The FTC’s unusual move to publicize its referral on June 18 recommended suing TikTok for both alleged violations. This comes amidst disagreements between the FTC and Justice Department over recent consumer protection cases involving major companies like Amazon and Meta Platforms.
In 2019, TikTok settled with the FTC for $5.7 million over similar allegations of illegally collecting data from children. As part of the settlement, TikTok agreed to submit annual reports on data collection and compliance, which contributed to the current case.
The DOJ’s Consumer Protection Branch has a 45-day window from the FTC’s referral to decide on litigation or to return the case to the FTC. The Justice Department typically opts to lead the case, as it can retain a percentage of the civil penalties collected.
Earlier in the year, the FTC appealed to Congress to amend the law to allow it to litigate its own cases, criticizing the current referral process to the Justice Department as “badly broken.”
