TikTok agrees to proposed $92 million settlement in privacy class action
Class members can get compensation, as long as most don't file for it.
KATE COX - 2/26/2021,
TikTok parent company ByteDance has agreed to a $92 million deal to settle class-action lawsuits alleging that the company illegally collected and used underage TikTok users' personal data.
The proposed settlement (PDF) would require TikTok to pay out up to $92 million to members of the class and to change some of its data-collection processes and disclosures going forward.
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The suit, which rolled up more than 20 related lawsuits, mostly filed on behalf of minors, alleged that TikTok violated both state and federal privacy laws, including the Computer Fraud and Abuse Act and the Video Privacy and Protection Act, through its use of data.
TikTok uses "automated software, proprietary algorithms, AI, facial recognition, and other technologies to commercially profit from" its users, the complaint (PDF) alleged. The data that TikTok allegedly collects, shares, and uses for machine learning training goes surprisingly deep, the suit added, including users' "identities, unique identifying information, biometric data and information, images, video and digital recordings, audio recordings, clipboard data, geolocation, names, email addresses, passcodes, social media accounts, messaging services, telephone numbers, and other private, nonpublic, or confidential data and information."
Additionally, the suit cited concerns that private and personally identifiable user data TikTok collected could have been shared with Chinese government entities, echoing the Trump administration's concerns in its failed attempts to ban TikTok from operating in the US.
TikTok denied any specific wrongdoing. "While we disagree with the assertions, rather than go through lengthy litigation, we’d like to focus our efforts on building a safe and joyful experience for the TikTok community," the company said in a statement.Advertisement
Money for the taking—unless everyone asks
Attorneys representing the plaintiffs touted the settlement as "one of the largest ever achieved" in such a case. Inasmuch as their assertion is true, it comes out as far more damning of the state of US privacy laws than complimentary of this particular case.
The total class, as defined in the settlement, includes 89 million US users. The attorneys ask for a collective payment "not to exceed 33.33% of the settlement fund," leaving $61 million for the class members to collect. On top of that, however, the proposed deal is structured such that each member of the "national" class can claim a share, and Illinois users can claim six shares.
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TikTok identified 1.4 million users who would qualify in the Illinois subclass, leaving about 87.6 million other class members nationwide. According to the settlement, if every qualified member of the class filed for a claim, most users could expect to reap about $0.96 and Illinois users could get as much as $5.75.
In the filing, however, attorneys make clear that they do not expect a high percentage of the class to file claims, instead describing likely payouts for hypothetical claims rates from 1.5 percent ($383.33 for Illinois, $63.89 for everyone else) to 20 percent ($28.75 for Illinois, $4.79 for everyone else) of the class.
Of course, money isn't everything; lawsuits such as this class action often seek injunctive relief as well—that is, requiring the company not to do the bad thing anymore. This agreement is no different. Under the proposed terms, TikTok will implement a "companywide data privacy training initiative" to instruct employees and contractors to comply with data privacy laws.
As for its collection, storage, and use of sensitive data, TikTok does not actually say in the settlement that it will stop those activities, but it says instead that it will update its privacy policies to make sure those activities are more clearly disclosed "and in compliance with all applicable laws."
A judge will have to approve the proposed settlement before it goes into effect; the process is expected to take several months.
TikTok identified 1.4 million users who would qualify in the Illinois subclass, leaving about 87.6 million other class members nationwide. According to the settlement, if every qualified member of the class filed for a claim, most users could expect to reap about $0.96 and Illinois users could get as much as $5.75.
In the filing, however, attorneys make clear that they do not expect a high percentage of the class to file claims, instead describing likely payouts for hypothetical claims rates from 1.5 percent ($383.33 for Illinois, $63.89 for everyone else) to 20 percent ($28.75 for Illinois, $4.79 for everyone else) of the class.
Of course, money isn't everything; lawsuits such as this class action often seek injunctive relief as well—that is, requiring the company not to do the bad thing anymore. This agreement is no different. Under the proposed terms, TikTok will implement a "companywide data privacy training initiative" to instruct employees and contractors to comply with data privacy laws.
As for its collection, storage, and use of sensitive data, TikTok does not actually say in the settlement that it will stop those activities, but it says instead that it will update its privacy policies to make sure those activities are more clearly disclosed "and in compliance with all applicable laws."
A judge will have to approve the proposed settlement before it goes into effect; the process is expected to take several months.
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