TikTok Agrees to Offer $ 92 Million Settlement in Privacy Class Action



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TikTok Agrees to Offer $ 92 Million Settlement in Privacy Class Action

TikTok’s parent company, ByteDance, has reached a $ 92 million deal to settle class action lawsuits alleging the company illegally collected and used personal data from underage TikTok users.

The proposed settlement (PDF) would require TikTok to pay class members up to $ 92 million and change some of its data collection and disclosure processes in the future.

The lawsuit, which brought together more than 20 related lawsuits, mostly filed on behalf of minors, alleged that TikTok violated federal and state privacy laws, including the Computer Fraud and Abuse Act and the law on the confidentiality and protection of video, through its use of data. .

TikTok uses “automated software, proprietary algorithms, AI, facial recognition and other technologies to commercially benefit” its users, according to the complaint (PDF). The data that TikTok allegedly collected, shared and used for machine learning training is surprisingly deep, the combination added, including user identities, unique credentials, biometric data and information, images. , video and digital recordings, audio recordings, clipboard data, geolocation, names, email addresses, access codes, social media accounts, messaging services, phone numbers and other private data and information , non-public or confidential. “

Further, the lawsuit raised concerns that private and personally identifiable user data collected by TikTok could have been shared with Chinese government entities, echoing concerns of the Trump administration in its failed attempts to ban to TikTok to operate in the United States.

TikTok has denied any specific wrongdoing. “While we disagree with the claims, rather than going through lengthy litigation, we would like to focus our efforts on building a safe and joyful experience for the TikTok community,” the company said in a communicated.

Money to take away – unless everyone asks for it

Lawyers representing the plaintiffs have touted the settlement as “one of the most important ever” in such a case. To the extent that their claim is true, it stands out as much more damning of the state of US privacy laws than complementary to this particular case.

The total class, as defined in the regulations, includes 89 million US users. The lawyers are asking for a collective payment “not to exceed 33.33% of the settlement fund,” leaving class members $ 61 million to raise. On top of that, however, the proposed deal is structured such that every member of the “national” class can claim one action, and Illinois users can claim six actions.

TikTok identified 1.4 million users who would qualify in the Illinois subclass, leaving an estimated 87.6 million other class members nationwide. According to the settlement, if each qualified member of the class files a claim, most users could expect to raise around $ 0.96 and users in Illinois could get as much as $ 5.75.

In the record, however, lawyers make it clear that they don’t expect a high percentage of the class to file claims, instead describing the likely payouts for hypothetical claim rates ranging from 1.5% ( $ 383.33 for Illinois, $ 63.89 for all others) at 20% ($ 28.75). for Illinois, $ 4.79 for everyone in the class.

Of course, money is not everything; lawsuits like this class action also often seek an injunction, that is, forcing the company to stop doing the wrong thing. This deal is no different. Under the proposed terms, TikTok will implement an “enterprise-wide data privacy training initiative” to require employees and contractors to comply with data privacy laws.

When it comes to the collection, storage and use of sensitive data, TikTok does not actually say in the regulations that it will stop these activities, but rather does say that it will update its privacy policies to ensure that these activities are more clearly disclosed “and in accordance with all applicable laws.”

A judge will need to approve the proposed rule before it comes into effect; the process should take several months.

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