- TikTok and ByteDance will pay $400 million to settle the US case.
- YouTube and Epic Games have also faced major penalties under the same privacy law.
- Meta is now fighting a much larger case involving similar allegations.
For technology companies, children’s privacy is becoming an increasingly expensive problem.
TikTok and its parent company ByteDance have agreed to pay $400 million (£293 million) to settle a US government lawsuit over allegations that the platform collected personal information from children without the required parental consent.
The settlement is one of the largest ever involving the Children’s Online Privacy Protection Act (COPPA), a US law that has been in place since 2000. The case was brought by the Department of Justice in 2024 and accused TikTok of allowing millions of children under 13 to use the platform while collecting their data without proper consent.
TikTok will pay $300 million immediately, with another $100 million due after a previous consent decree involving its predecessor Musical.ly is lifted.
For Big Tech, however, the more important question may be what comes next.
The penalties are getting bigger
TikTok is not the first major technology company to face a substantial COPPA penalty.
YouTube paid $170 million in 2019 to settle allegations that it collected children's personal information without parental consent. Epic Games agreed to a $275 million penalty in 2022 over allegations involving its Fortnite platform.
TikTok's $400 million settlement now exceeds both.
The growing size of the penalties suggests that children's privacy is becoming a much more serious financial risk for technology companies, particularly as regulators gain access to more information about how platforms operate.
The TikTok case also dates back to an earlier enforcement action involving Musical.ly. The predecessor company agreed to pay $5.7 million in 2019 over allegations that it had collected information from children without parental permission.
The latest case therefore raises a bigger question than the size of the check: how much are companies really willing to spend to fix problems that regulators say should have been dealt with years earlier?
Meta faces an even bigger test
The issue has become particularly significant because Meta is now facing a much larger legal challenge.
A coalition of 29 US states is suing the Facebook and Instagram owner over allegations that its platforms were designed to attract young users and that the company violated children’s privacy protections.
The trial is already underway, and the potential financial consequences could dwarf the TikTok settlement.
The states are seeking damages that could reach $200 billion, while also asking for changes to how Meta’s platforms operate for younger users.
That does not mean Meta will necessarily pay anything close to that amount. But the case shows how children’s privacy and safety disputes have moved from regulatory warnings into potentially enormous financial liabilities.
TikTok’s latest settlement also comes after the company made significant changes to its ownership, management and privacy practices in the US. The Justice Department said the platform had strengthened safeguards for young users and introduced additional age-related controls and parental oversight.
For the technology industry, the message is becoming harder to ignore: children’s data is no longer just a privacy issue — it can become a very expensive business risk.
