TikTok’s $400 million settlement with the U.S. Justice Department hit a snag this week after a federal judge said he was considering rejecting part of the agreement.
The update from U.S. District Judge George H. Wu came weeks after TikTok and its Chinese parent company ByteDance agreed to settle allegations that its app violated children’s online privacy laws.
Under the settlement, TikTok would pay $300 million immediately and an additional $100 million upon entry of an order vacating a prior consent decree entered with the Federal Trade Commission (FTC) in 2019 against TikTok’s predecessor, Musical.ly.
The snag in the settlement came as Wu said Friday that he was inclined to reject the part of the deal that would end the consent decree.
In court
records obtained by CNBC, Wu said the court “cannot determine that it constitutes a durable remedy or that termination is suitably tailored to the asserted change in circumstance.”
Multiple fines
The consent decree from 2019 stemmed from allegations by the FTC that Musical.ly knew that young children were using the app and collected names and other personal information without parental consent.
At the time, Musical.ly paid a $5.7 million fine, with the consent decree requiring TikTok to have reporting obligations through 2029.
TikTok’s $400 million settlement from last month came after the Justice Department sued TikTok and ByteDance in 2024 for allegedly failing to protect children's privacy and illegally collecting their information.
The defendants were accused of violating a law requiring online services aimed at children to obtain parental consent to collect personal information from users under 13.
Associate Attorney General Stanley Woodward said the DOJ's priority "is ensuring that children are protected online and that companies entrusted with their personal information meet their legal obligations."
Reuters contributed to this report.
Fernando Cervantes Jr. is a trending news reporter for USA TODAY. Reach him at fernando.cervantes@usatodayco.com and follow him on X @fern_cerv_.
This article originally appeared on USA TODAY: Judge says he could reject part of $400 million TikTok settlement
