TikTok is nearing a $400 million truce with President Trump’s Justice Department over child data privacy breaches – a sweetheart deal as the social-media app was willing to pay $1 billion to settle the same claims in 2024, The Post has learned.
In June 2024, the Biden-era Federal Trade Commission disclosed it found evidence that TikTok had knowingly collected data on kids younger than 13 without telling their parents – a violation of a federal law called the Children’s Online Privacy Protection Act (COPPA).
Policymakers and online safety advocates have long pushed for tightened restrictions on targeted ads, arguing social media companies are manipulating impressionable kids and hooking them with addictive features to boost their profits.
TikTok executives – who at the time were already fighting tooth-and-nail to prevent a total US ban of the app – were eager to make the case go away. In closed-door negotiations with FTC officials during the spring of 2024, TikTok agreed in principle to pay a $1 billion settlement for the violations, three sources with direct knowledge of the talks told The Post.
TikTok, the sources said, was also close to agreeing to other key safety features sought by the FTC — including a ban on targeted advertising for minors, limits on late-night notifications sent to their phones.
The FTC referred its findings and proposed settlement terms to the Biden DOJ, taking the unusual step of disclosing the referral in a press release, stating that it had “determined that doing so here is in the public interest.”
From there, the deal quickly fell apart.
Insiders said top officials at Biden’s DOJ were hesitant to finalize a settlement, fearing that cutting a deal with a company or otherwise pursuing legal action would undermine Congress’s active effort to ban TikTok through legislation.
“It’s another example of how the Biden administration couldn’t get out of its own way,” said one of the sources with direct knowledge of the situation said.
Last week, ABC reported that the Trump administration was close to an agreement with TikTok to settle the DOJ lawsuit for about $400 million. The money is reportedly earmarked for “beautification” projects in Washington DC rather than compensation for underage victims of data privacy violations.
The reported terms drew a scathing response from Fairplay for Kids, a leading online safety advocacy group, which called the settlement a “a slap on the wrist that will not meaningfully change TikTok’s exploitation and harm of children.”
The $400 million figure amounts to “nothing more than pennies on the dollar” when the true scope of TikTok’s COPPA violations could have resulted in tens of billions in penalties, according to Fairplay.
“News reports about the settlement have not mentioned any meaningful injunctive relief,” Fairplay Policy Counsel Haley Hinkle said in a statement.
“If that proves to be the case, it makes the settlement even weaker. The DOJ should have used the pressure of massive COPPA liability to extract meaningful changes to TikTok’s addictive and dangerous product design.”
The White House referred a request for comment to the DOJ.
“The Justice Department is committed to achieving resolutions that advance the President’s agenda, are grounded in the law and the facts, and protect taxpayer dollars,” a DOJ spokesperson said in a statement.
TikTok didn’t respond to requests for comment.
The DOJ reluctantly filed a lawsuit against TikTok in August 2024, but made no mention of the settlement talks. The timing all but assured that the case would not be resolved until after that year’s presidential election.
By then, President Trump had already vowed on the campaign trail to “save TikTok” if he was elected to the White House. The Trump administration later played a key role in shaping the deal that allowed a US-majority entity to take over TikTok and avert a ban – with Vice President JD Vance even serving as point person of negotiations.
The White House’s direct involvement in those talks weakened the DOJ’s leverage in settlement talks and likely pushed TikTok to roll the dice on a more lenient result, sources said.
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