Parents of underage children who downloaded the wildly popular TikTok or Musical.ly video apps could be eligible for a share of a $1.1 million settlement in a class-action lawsuit alleging the Chinese-owned companies violated online privacy laws.
ByteDance, which owns both apps, now merged under the TikTok brand, reached the settlement agreement last week in a Chicago federal court. The deal, which still needs approval from a judge, could deliver a modest payout to the families of up to 6 million underage children who signed up for or used the apps without parental consent.
More than 200 parents signed onto the lawsuit alleging Musical.ly, an app used to create and share music videos, collected personal information from childrenunder 13, including username, email, phone number, a short bio and a profile picture, without their parents' permission. Launched in 2014, Musical.ly also collected geolocation information, and did not request user ages until July 2017, according to the complaint, which was filed Dec. 3.
"Because the app had virtually all privacy features disabled by default, there were serious ramifications, including reports of adults trying to contact minor children," the lawsuit alleged, describing Musical.ly as a potential "hunting ground" for pedophiles.
The Tribune reported on several instances of alleged stalking and child pornography using the Muscial.ly app. In February 2018, for example, Richard Barnett of Aurora pleaded not guilty to charges he enticed at least four underage girls to make and send sexually explicit images through the app. That case is ongoing before the same Chicago federal judge hearing the class action.
In 2017, a Batavia man intercepted messages through Musical.ly asking his 7-year-old daughter to send topless photos to another user, who claimed to be 9 years old, the Tribune reported.
The class action was brought by Chicago resident Sherri Leshore, along with another parent who lives in California. Leshore alleges her underage child downloaded the Musical.ly app onto a mobile device without her permission, and that she never received direct notice the app would collect and disclose her child's personal information.
In June, Chicago attorney David Klinger sent a letter to TikTok on behalf of the parents alleging the company had violated children's privacy and state consumer protection statutes, including Illinois'. The preliminary settlement was filed on Dec. 5 – just days after the complaint – following months of negotiations and an October mediation.
"TikTok is firmly committed to safeguarding the data of its users, especially our younger users," the company said in a statement Wednesday. "We were made aware of the allegations in the complaint some time ago and, although we disagree with much of what is alleged in the complaint, we have been working with the parties involved and are pleased to have come to a resolution of the issues."
Founded in 2012, ByteDance has been valued at $78 billion, making it one of the world's largest startups. In December 2017, ByteDance bought Musical.ly for a reported $1 billion and absorbed the app into its own TikTok app in August 2018. The fast-growing TikTok app hit a reported 1.5 billion total downloads last month and served as the launching pad this year for "Old Town Road," the viral country music crossover hit by rapper Lil Nas X.
As the popularity of TikTok grows, concerns over privacy violations for users of the younger-skewing app are mounting.
In February, TikTok agreed to pay a $5.7 million fine in a children's privacy case brought the Federal Trade Commission. The complaint alleged that the predecessor app Musical.ly violated the Children's Online Privacy Protection Act, a federal law requiring websites and online services to obtain parental consent before collecting personal information from children younger than 13.
The operators of the Musical.ly app were aware that a "significant percentage" of users were under 13, and received thousands of complaints from parents that their children had created accounts without their consent, according to the FTC complaint.
While the FTC settlement with Musical.ly represented the largest civil penalty ever obtained by the federal agency in a children's privacy case, the class action settlement may be breaking new ground because it provides consumer relief for alleged privacy violations involving children online.
"We're proud of our result in this case involving such an important issue as children's privacy," said Klinger, who brought the class action with Gary Mason, a Washington-based attorney.
Parents or guardians who qualify will have to file a claim form to share in the $1.1 million settlement. The attorneys are requesting up to a third of the proceeds to pay their fees, which is typical in class action settlements, while the two lead plaintiffs are in line to get $2,500 each.
That would leave a projected payout of about $5 to $10 per claimant for the remaining members of the class, according to the agreement.