TikTok Inc. and Chinese parent ByteDance Ltd. agreed to pay $400 million to resolve a a Biden-era lawsuit by the Justice Department accusing the popular social media app of collecting data on children in violation of an online privacy law.

The settlement comes several months after ByteDance closed a long-awaited deal to transfer parts of its U.S. operations to American investors to resolve national security concerns.

The Justice Department sued TikTok in 2024 on behalf of the Federal Trade Commission, alleging the company allowed millions of children under the age of 13 to create accounts without their parents’ knowledge or consent while making it difficult for parents to request the deletion of those accounts.

The company didn’t immediately respond to a request for comment.

TikTok will pay $300 million at first and $100 million more once an order is filed vacating a prior consent decree against TikTok’s predecessor, Musical.ly. DOJ said the settlement was among the largest in a case involving the Children’s Online Privacy Protection Act.

“This settlement is a major victory for American children and parents,” Associate Attorney General Stanley Woodward said in a statement. “The department’s priority is ensuring that children are protected online and that companies entrusted with their personal information meet their legal obligations. This resolution secures a substantial recovery while reinforcing the protections that families expect and deserve.”

The Justice Department said that since it filed its suit, TikTok has undergone significant changes to its ownership and privacy policies. The company also has taken steps to strengthen safeguards for young users by improving age-related controls and increasing parental oversight, according to the statement.

For half a decade, TikTok and Beijing-based ByteDance weathered a geopolitical and regulatory tug-of-war that threatened to shut down the platform in the U.S. over national security concerns. President Donald Trump attempted to ban the app in 2020 during his first term, but was stymied by the courts.

Congress passed legislation in 2024 to ban the app unless ByteDance sold TikTok, citing concerns that the Chinese government could abuse U.S. user data or use the app to push narratives preferred by Beijing.

After multiple delays, the Trump administration brokered a deal to address the national security concerns and allow the TikTok app to keep operating in the U.S. The deal, which closed in January, moved parts of TikTok’s U.S. business from control by ByteDance to a new, American-led and majority American-owned TikTok venture.

That entity, helmed by Chief Executive Officer Adam Presser, a TikTok veteran, is responsible for protecting U.S. user data, moderating content and securing a content recommendation algorithm leased from ByteDance and retrained with data from American TikTok users. Some of the most valuable pieces of the business — including TikTok’s advertising division and fast-growing e-commerce arm TikTok Shop — remain under ByteDance control.

Oracle Corp., private equity firm Silver Lake Management LLC and Abu Dhabi-based investment company MGX are the three managing investors in the spun-out American TikTok venture, together owning 50% of the new entity. Existing ByteDance investors control 30.1% and ByteDance 19.9%. Oracle, which had already been a TikTok cloud computing partner, is also serving as a security guard of sorts, charged with ensuring TikTok is following the law.

Though many saw ByteDance and China as the winners of TikTok’s yearslong standoff with Washington, Trump has touted the deal as a victory for his presidency. The Trump administration reportedly received a $10 billion fee from investors in the U.S. TikTok venture in exchange for brokering the high-stakes deal.

While TikTok is facing thousands of user lawsuits over child safety and privacy, the Justice Department case has been one of the biggest threats to the company on the privacy front.

The DOJ accused TikTok of widespread violations of the Children’s Online Privacy Protection Act even after the company reached a 2019 settlement with the FTC related to kids’ privacy.

In the 2019 pact, TikTok had agreed to pay $5.7 million to resolve the FTC claims. But in the 2024 suit, the U.S. was seeking penalties as high as $51,744 per violation per day, which could have added up to hundreds of millions of dollars if the government had pursued the lawsuit.

Even as TikTok resolves the DOJ case, it remains at the center of other major child safety battles. TikTok has been a defendant, along with Meta Platforms Inc., Google’s YouTube and Snap Inc., in nationwide litigation aimed at holding giant technology platforms accountable for child safety issues.

TikTok has now settled multiple individual cases over alleged youth harms, but the mass of litigation will likely continue to shine a spotlight on the issues at stake and could potentially lead to large fines and potential orders for the company to change its business model.

(With assistance from Riley Griffin.)

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