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FTC Hits TikTok With Record-Breaking $5.7 Million Fine

30x30by Frank Yoder on Apr 10, 2019

The Federal Trade Commission (FTC) slapped video sharing app TikTok with a record-breaking fine earlier this year. The FTC claims TikTok collected information from children under 13. The $5.7 million fine is the biggest civil penalty issued by the FTC in a children's privacy case. It's kind of like that episode of "Silicon Valley," where the guys receive a massive fine for violating children's privacy -- though they managed to get away with it. Here's everything you need to know about the landmark TikTok ruling.

What is TikTok?

TikTok (previously known as Musical.ly) is an app that lets users create and share short videos. Owned by ByteDance, the app is one of the most popular video platforms in the U.S. and Asia, with more than 500 million active monthly users in 150 countries. TikTok frequently appears on the list of top downloads on both the App Store and Google Play.

TikTok users can create videos that last between 3-15 seconds and looping videos of up to 60 seconds. A number of celebrities have used the platform to post videos, including talk show host Jimmy Fallon and pro-skateboarder Tony Hawk. Fallon's #tumbleweedchallenge, where users roll on the floor like tumbleweed, has attracted thousands of submissions.

Why Did TikTok Recieve a Fine?

TikTok collected the names, email addresses, and other information from children under 13 without parental consent, according to the FCC. This breaches a number of guidelines.

A claimant in the case also alleges that all TikTok accounts were public by default, which meant other users on the platform could view children's bios, pictures, and videos. The site allowed users to change their privacy settings but profile pictures and bios allegedly remained public. A complaint claims that, as a result, adults have tried to contact children via the app.

"The operators of 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," says FTC Chairman Joe Simons. "This record penalty should be a reminder to all online services and websites that target children."

What Happens Next?

As well as receiving a fine, TikTok must now comply with the Children's Online Privacy Protection Act (COPPA) in the United States, as well as remove any videos uploaded by children under the age of 13.

After they received the fine, TikTok announced that it would launch a separate section of its app for children under 13, with additional safety and privacy protections tailored to a younger audience.

Perhaps not surprisingly, the exposure of this case resulted in greater interest in TikTok. In Canada, they shot up to #5 on the free overall charts.

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Apps and Privacy Concerns

TikTok isn't the only app that has courted controversy over its privacy protections. In Oct. 2018, two Democratic senators asked federal regulators to investigate whether children's apps inappropriately collected personal data.

"Senators Edward J. Markey of Massachusetts and Richard Blumenthal of Connecticut sent a letter to the Federal Trade Commission saying they were concerned that thousands of apps may 'improperly track children and collect their personal information,'" says The New York Times.

Also last year, a coalition of 22 public health and consumer advocacy groups filed a complaint with the FTC and asked them to investigate how Google Play marketed apps to children. They claim the majority of children's apps on the platform transmit sensitive information over the internet.

"The groups say that Google has been aware of all these problems for some time, but hasn't taken adequate steps to enforce its criteria for developers," says TechCrunch. "As a result, the consumer advocacy groups are urging the FTC to investigate the Play Store's practices."

How Can Apps Safeguard Children's Data?

Protecting children's data should be a huge concern for all app makers. Developers should ensure that their apps adhere to FTC guidelines and don't expose sensitive information to other users.

Some app developers are taking matters into their own hands. Protect Your Kid, for example, is a parental control app that limits what children can download on the Play Store.

"You can protect all of your kid's phones and tablets with a single account," says Protect Your Kid. "Just download and configure Protect Your Kid on each Android device."

What Can Developers Learn From the TikTok Case?

The TikTok case proves that the FTC will penalize app developers and operators who fail to comply with federal privacy guidelines. The message is clear: Apps that violate the law will receive harsh penalties and face other legal consequences.

"We take enforcement of COPPA very seriously, and we will not tolerate companies that flagrantly ignore the law," adds Simons.

The FTC provides further guidance for parents who want to keep their children safe online, but this information will also benefit app makers. The commission covers topics such as online scams, identity theft, and safety.

Takeaway

The FTC has hit video sharing app TikTok with a record-breaking $5.7 million fine -- one of the largest in history. The commission says the app collected private information from children under the age of 13 without parental consent. Going forward, app developers and operators need to crank up their privacy management strategies to avoid penalties.

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