Bytedance has faced a barrage of lawsuits and investigations from regulators world wide over TikTok’s addictive design, handling of user data and lack of protections for teenage users
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Chinese social media giant Bytedance was dealt a significant blow last September when Ireland’s data protection regulator fined it a record $370 million for failing to properly protect the non-public data of kids using its app TikTok. New company documents indicate that Bytedance expects more such fines. The company has specifically put aside $1 billion to cover future fines from European data protection authorities.
Bytedance has faced a barrage of lawsuits and investigations from regulators world wide over TikTok’s addictive design, handling of user data and lack of protections for teenage users. Just yesterday, the attorneys general of thirteen states and the District of Columbia filed separate lawsuits alleging that TikTok was designed for compulsive use and thereby harmed children and teenagers.
The $1 billion provision for future fines was disclosed in corporate accounts for TikTok’s European operations filed with the U.K.’s Companies House this week. The accounts also showed that TikTok’s European revenue rose to $4.57 billion last 12 months from $2.6 billion in 2022. Losses have also almost tripled from $512 million to $1.3 billion in 2023.
“The interpretation of the General Data Protection Regulation is still evolving and draft decisions in investigations by data protection regulators are subject to review,” resulting in uncertainty about what fines may very well be levied, Bytedance’s company statement said.
The scale of the entire fines and penalties TikTok faces on the continent may very well be even greater than the $1 billion provision in its 2023 accounts. The European Commission launched an investigation against TikTok under the Digital Services Act (DSA) in February 2024. The European Union can effective firms as much as 6% of world turnover or impose a ban for violating the DSA.
The $1 billion provision includes the $370 million effective, the most important the corporate has faced thus far, imposed by the Irish Data Protection Commission in September 2023 over its handling of sensitive data of its teenage users and underage children imposed. TikTok has appealed the effective and the ultimate penalty continues to be pending, however the short-video app has faced a series of regulatory sanctions lately. In March, TikTok was ordered to pay $11 million by Italy’s competition watchdog for laxity Content checks. Last 12 months it was in front of 1 $16 million effective from the UK Data Protection Authority on the handling of kids’s personal data and a 1 million dollars good within the Netherlands and a $5.7 million In 2019, a effective was imposed within the United States for similar reasons.
TikTok noted in its report that the corporate can also be facing $11.4 billion in claims from three Dutch privacy and consumer rights foundations. A Dutch court ruled last September that the claims were inadmissible, however the case has since been referred to the Dutch Court of Appeal. TikTok can also be facing one $1.1 billion Legal claim for illegal collection of information by a Portuguese consumer rights group.
“The above cases are still at the trial stage and due to the lack of legal precedent, it is not practical for the group to estimate the potential financial impact of such a lawsuit, therefore no provisions have been made,” TikTok noted in its corporate statement.
In the United States, TikTok is now facing an enormous wave of litigation non-partisan group from state attorneys general who allege it advanced design features to encourage compulsive use of its app on the expense of the mental health of American teenagers. Bytedance can also be defending itself in court against a federal law passed in April that may force the corporate to sell TikTok to a non-Chinese company by January 2025 or face a ban within the United States. A verdict was expected on December 6 and the case is more likely to be appealed to the Supreme Court.
