By HALELUYA HADERO (AP Business Writer)
The Federal Trade Commission has referred a complaint against TikTok and its parent company, ByteDance, to the Department of Justice.
The FTC said in a statement Tuesday that it investigated the two companies and “uncovered reason to believe” they are “violating or are about to violate” the Children’s Online Privacy Protection Act, a federal law which requires kid-oriented apps and websites to get parental consent before collecting personal information of children under 13.
The agency also cited potential violations of the FTC Act, the law that outlines its enforcement responsibilities.
A spokesperson for the Justice Department declined to comment on the substance of the referral from the FTC against TikTok. “Consistent with our normal approach, the Justice Department consulted with FTC in advance of this referral and will continue to do so as we consider the claims. As always, the Department will be guided by the facts and the law as well as our responsibility to protect the American people,” the spokesperson said.
A person familiar with the matter told The Associated Press in March that the agency was looking into whether TikTok violated a prohibition against “unfair and deceptive” business practices by denying that individuals in China had access to U.S. user data.
TikTok spokesperson Alex Haurek said the company has been working with the FTC for more than a year to address its concerns and was “disappointed the agency is pursuing litigation instead of continuing to work with us on a reasonable solution.”
“We strongly disagree with the FTC’s allegations, many of which relate to past events and practices that are factually inaccurate or have been addressed,” Haurek said in a statement.
The FTC said its investigation began in connection with a compliance review of a 2019 settlement between the agency and Musical.y, the TikTok predecessor that was acquired by ByteDance in 2017. Under the settlement, Musical.y agreed to pay $5.7 million to resolve allegations that the company violated the children’s privacy law.
The agency said that while it does not typically publicize complaints that are referred to the DOJ, it determined doing so this time was “in the public interest.”
Citing national security concerns, U.S. lawmakers passed a law in April that requires TikTok to be sold to an approved buyer or face a nationwide ban. TikTok and Beijing-based ByteDance have sued to overturn the law, which President Joe Biden signed.
