The Federal Trade Commission today fined Musical.ly, now known as TikTok, $5.7 million dollars for violating children's privacy laws.
The FTC press release says this means the Commission has obtained the "largest monetary settlement in a COPPA case."
The FTC also notes there were reports of adults trying to contact children in Musical.ly Until October 2016, there was a feature that users view others within a 50-mile radius.
"The operators of Musical.ly—now known as TikTok—knew many children were using the app but they still failed to seek parental consent before collecting names, email addresses, and other personal information from users under the age of 13," said FTC Chairman Joe Simons, in a statement. "This record penalty should be a reminder to all online services and websites that target children: We take enforcement of COPPA very seriously, and we will not tolerate companies that flagrantly ignore the law."
In an app update being released today, all users will need to verify their age, and the under 13-year-olds will then be directed to a separate, more restricted in-app experience that protects their personal information and prevents them from publishing videos to TikTok .
In a bit of bad timing for the popular video app, the ruling comes on the same day that TikTok began promoting its new safety series designed to help keep its community informed of its privacy and safety tools.
The Federal Trade Commission had begun looking into TikTok back when it was known as Musical.ly, and the ruling itself is a settlement with Musical.ly.
The industry self-regulatory group Children's Advertising Review Unit (CARU) had last spring referred Musical.ly to the FTC for violating U.S. children's privacy law by collecting personal information for users under the age of 13 without parental consent. (The complaint, filed by the Department of Justice on behalf of the Commission, is here.)
But its regulatory issues followed it to its new home.
According to the U.S. children's privacy law COPPA, operators of apps and websites aimed at young users under the age of 13 can't collect personal data like email addresses, IP addresses, geolocation information or other identifiers without parental consent.
But the Musical.ly app required users to provide an email address, phone number, username, first and last name, a short biography and a profile picture, the FTC claims. The also app allowed users to interact with others by commenting on their videos and sending direct messages. In addition, user accounts were public by default, which meant that a child's profile bio, username, picture and videos could be seen by other users, the FTC explained today in its press release.
This company sold itself for $800 million to $1 billion. Violating children's privacy seems to have little consequence. https://t.co/8rOYbLJbNF
— Shira Ovide (@ShiraOvide) February 27, 2019
Here's when I grilled Musically's CEO about pre-teen girls dancing for adults on his app in 2016. He got pissed, dodged, & denied it. Today Musically/TikTok was fined $5M over child privacy https://t.co/uByEMPfpqp
— Josh Constine (@JoshConstine) February 27, 2019
Insanely popular with the youngs, TikTok is slammed for COPPA violations by FTC.
(It goes largely unmentioned when folks talk about TikTok that the Chinese government has unfettered access to user data because it is stored and processed there.) https://t.co/5NePmdeE9q pic.twitter.com/7hHl4tHHna
— David Carroll ? (@profcarroll) February 27, 2019
Not much info on the @tiktok_us #COPPA @FTC order but it's similar to the other orders. To violate COPPA, your lawyer is 1) stone drunk or 2) dead. That said, the fine is prob 0.25% of what it's worth. Good original reporting by @jwherrman https://t.co/kSuErk0UMY pic.twitter.com/OAyRdJkuwb
— Tim Lordan (@tlordan) February 27, 2019