TikTok and its parent company ByteDance have agreed to pay $400 million to the US government to settle allegations that the platform unlawfully collected personal information from millions of children, making it one of the largest child privacy settlements in the country.

The settlement resolves a 2024 lawsuit brought by the US Department of Justice under former President Joe Biden. The government alleged that TikTok collected “vast amounts of data” from users under the age of 13 without obtaining the required parental consent.

The alleged practices violated the Children’s Online Privacy Protection Act (COPPA), a federal law enacted in 2000 to protect children’s personal information online.

“Children and parents are better protected today than they were when this case began,” Assistant Attorney General Brett Shumate said.

TikTok to make two payments

Under the agreement, TikTok and ByteDance will immediately pay $300 million to the Justice Department.

A further $100 million will be paid once the government lifts a 2019 consent decree involving the Federal Trade Commission.

The earlier agreement followed a case against Musical.ly, the predecessor to TikTok, which agreed to pay $5.7 million over alleged COPPA violations and pledged to obtain parental consent for users under 13.

The Justice Department did not announce additional penalties or restrictions against TikTok as part of Friday’s settlement.

Officials said the company has undergone significant changes since the lawsuit was filed, including changes to its ownership structure, privacy practices and controls designed to protect younger users.

Allegations involved millions of children

When the lawsuit was filed, US authorities said TikTok had more than 170 million users in the country and alleged that the platform was directed towards children.

Prosecutors argued that TikTok failed to effectively determine the ages of its users and did not consistently obtain parental consent from children under 13.

COPPA requires online services directed at children to obtain parental permission before collecting personal information from users under 13.

Other major technology companies have also faced significant penalties under the law. Google’s YouTube paid $170 million in 2019, while Epic Games agreed to pay $275 million in 2022.

Settlement comes amid wider scrutiny

The TikTok settlement comes as Meta faces a separate legal challenge over alleged violations of children’s privacy. Attorneys general from 29 US states have accused Meta of targeting children and profiting from their use of its platforms. A jury trial in that case began this week.

The TikTok case also predates the restructuring of the company’s US operations. TikTok’s US business was separated from its previous China-based structure last year.

The current US operation is reportedly 81 per cent owned by a consortium of investors, while ByteDance retains a 19 per cent stake.

TikTok has faced intense political scrutiny in the US since 2024, when Biden backed legislation that could have resulted in a ban or forced sale of the company’s US operations. President Donald Trump later supported divestment, which was completed last year.

TikTok did not immediately respond to requests for comment.