The federal judge presiding over a class action lawsuit against TikTok Inc. recently continued settlement discussions, pending additional information, prior to ruling on a $92 million dollar agreement. U.S. District Judge John Lee of the Northern District of Illinois cited concerns about the predicted claims rate and proposed notice plan as part of his decision.
The Case Against TikTok
At the heart of the TikTok case is concern over biometric information privacy. Members of the plaintiff class claim that TikTok collected information about users’ locations, contacts, and facial features. This data was then sent to its Chinese parent company, ByteDance.
By collecting this information—including information about users who are minors—and sharing with ByteDance, the plaintiffs allege that TikTok violated one or more biometric privacy laws in the United States, including Illinois’ Biometric Information Privacy Act (BIPA). Investigators working for the plaintiffs claimed that TikTok went to some trouble to hide the source code that operated their data collection and sharing measures—making it more difficult for users to see what data the TikTok app collected or how it used that data.
TikTok claims that it did not violate U.S. state or federal privacy laws. Rather, the company has asserted that its app is neither collecting biometric information nor sending it to ByteDance. Even if it were collecting and transmitting this data, however, TikTok argues that its actions would still comply with applicable privacy laws, because the app’s terms of service clearly state that the TikTok app might collect and use information in this way.
The Terms of the Settlement Plan
The proposed settlement plan applies to 89 million TikTok users in the United States whose data was allegedly collected and sold to advertisers or communicated to ByteDance. The proposed settlement also contained measures that would affect TikTok’s data collection and sharing practices.
The proposed settlement terms included a promise by TikTok not to record users’ biometric information, including facial characteristics. GPS tracking would also be disabled so that TikTok could not track user locations. TikTok further agreed to stop sending U.S. user data to its parent company in China and to prevent the app from collecting any data on draft videos before they were uploaded and published.
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Settlement Concerns
Judge Lee, however, raised several concerns regarding the proposed settlement. One of these concerns addressed the predicted claims rate, which was estimated to be around 2%. Lee asked why TikTok did not plan to communicate news about the settlement to its users through the TikTok app itself. “It seems only natural if a settlement is supposed to benefit TikTok users, notice through the app would be a natural way to provide them notice,” said Lee.
TikTok argued that email would be a more effective way to reach users covered by the settlement, particularly as it could be targeted to the parents of affected minors rather than the minors themselves. The company also proposed reaching out on Facebook and other social media sites in order to better reach both TikTok users and parents of young users.
However, lawyers for objecting parties noted that TikTok has emails for only about 30 million users when 89 million users are affected by the settlement.
What’s Next for the TikTok Class Action?
One potentially instructive example from Facebook, which recently paid to settle claims that it too had violated biometric privacy laws. Facebook shared news of the class action settlement to affected users through its own Newsfeed, as well as an Internet ad campaign. Measures like these may extend the reach of TikTok’s settlement news, and may thus be more acceptable.
Resolving this case doesn’t mean the end of TikTok’s legal challenges, either. Currently, the Committee on Foreign Investment in the United States is engaged in a national security review of TikTok. The findings may result in a need for TikTok to change its corporate structure or take other measures in order to continue operating in the United States.
TikTok also recently faced scrutiny from the Federal Trade Commission regarding its collection of personal information from minors. The company paid a fine of $5.7 million to the FTC in connection with that complaint.
As for the current class action’s progress, Judge Lee requested that counsel files supplemental memos addressing the concerns he raised. Settlement talks will resume in a hearing scheduled for April 6, 2021.
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