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TikTok to Pay Record $5.7 Million FTC Fine for Alleged Violations of Children’s Privacy Law

The company behind TikTok, the popular short-form video app that incorporated Musical.ly last year, has agreed to pay $5.7 million to settle Federal Trade Commission allegations that it illegally collected personal info from children.

According to the FTC, it’s the largest civil penalty ever obtained by the agency in a children’s privacy case.

The FTC’s complaint, filed by the Department of Justice on behalf of the commission, alleges that Musical.ly violated the federal Children’s Online Privacy Protection Act (COPPA), which requires websites and online services aimed at kids to obtain parental consent before collecting personal information from children under 13.

Under the terms of the settlement, TikTok is also required to remove all videos from the app posted by children under the age of 13 and also must comply with COPPA going forward.

Musical.ly was acquired by Chinese internet giant ByteDance in 2017, which then migrated those users over to the TikTok platform last summer.

In the wake of the FTC fine, TikTok announced in a blog post that on Feb. 27 it is launching a new app environment for users under 13 that does not permit the sharing of personal information and “puts extensive limitations on content and user interaction.” Both current and new TikTok users will be directed to the age-appropriate app experience, beginning Wednesday.

In the post, TikTok said in part: “While we’ve always seen TikTok as a place for everyone, we understand the concerns that arise around younger users. In working with the FTC and in conjunction with today’s agreement, we’ve now implemented changes to accommodate younger U.S. users in a limited, separate app experience that introduces additional safety and privacy protections designed specifically for this audience.”

FTC Chairman Joe Simons alleged that the operators of TikTok/Musical.ly knew that many children under 13 were using the app but still failed to seek parental consent before illegally collecting info from the kids. The commission claimed that the company had received thousands of complaints from parents about the practice.

“This record penalty should be a reminder to all online services and websites that target children: We take enforcement of COPPA very seriously, and we will not tolerate companies that flagrantly ignore the law,” Simons said in announcing the TikTok agreement.

The Musical.ly app, which launched in 2014, let users create short videos including lip-syncing clips set to music and share those videos with other users. To register for the app, it required users to provide an email address, phone number, username, first and last name, a short biography, and a profile picture. TikTok is very similar but the company has tried to broaden the app’s appeal beyond lip-syncing videos.

In its complaint, the FTC noted that the default setting for Musical.ly users was to make their profile public — but even if those were set to private, other users could still send them direct messages. The commission cited reports of adults trying to contact children via the Musical.ly app. In addition, until October 2016, the app included a feature that allowed users to view other users within a 50-mile radius of their location.

Many Muiscal.ly users self-identified as kids under 13, and in some cases listed their hometown and even their school in their profiles, Andrew Smith, director of the FTC’s Bureau of Consumer Protection, said on a call with reporters.

The FTC calculated the $5.7 million fine based on multiple factors, according to Smith, including the “degree of culpability of the company” as well as its ability to pay and the effect of a fine on the company’s business.

The penalty is almost double the amount of the FTC’s previous biggest fine for violations of child privacy laws. That came in 2011, when Disney-owned Playdom paid $3 million to settle charges it had violated COPPA by allegedly collecting and disclosing personal information from hundreds of thousands of children under 13 without parental consent.

TikTok doesn’t share numbers on how many active users it has. Currently, TikTok has about 266 million monthly active users worldwide (excluding third-party Android stores in China), per research firm Apptopia. That includes around 40 million MAUs in the U.S. At one point Musical.ly claimed to have over 100 million active monthly users.

Also Wednesday, TikTok launched a new video tutorial series, “You’re in Control,” which steps through the app’s safety guidelines and tools.

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