TikTok and ByteDance have agreed to pay $400 million to settle a Department of Justice lawsuit alleging violations of the Children's Online Privacy Protection Act (COPPA). The settlement represents one of the "largest recoveries ever obtained" for a COPPA case. Under terms, TikTok will pay $300 million immediately and another $100 million after a prior FTC agreement is vacated.

The 2024 lawsuit, filed under the Biden administration, accused the company of violating a 2019 FTC settlement tied to its Musical.ly acquisition. The DOJ alleged TikTok allowed children under 13 to create accounts, collected data on minors using "Kids Mode," and repeatedly failed to honor parental requests to delete children's data.

In announcing the settlement, the Justice Department noted TikTok has "undergone significant changes to its ownership, management, compliance functions, and privacy practices." The company finalized a deal creating TikTok USDS Joint Venture, a new US entity controlled by investors including Oracle, Silver Lake, and MGX, with ByteDance retaining a 19.9 percent stake.

The settlement marks another milestone in resolving years of scrutiny over TikTok's privacy practices and China ties. Earlier this month, the Office of Management and Budget cleared federal workers to use the app again after a 2022 ban on government devices.