The Federal Trade Commission (FTC) has referred a complaint against TikTok and parent company ByteDance to the Justice Department over alleged violations of a law meant to protect children's privacy online. The investigation stems from a compliance review into Musical.ly, which was acquired by TikTok and had previously been subject to a 2019 settlement with the regulator regarding violations of the Children's Online Privacy Protection Act (COPPA).
In response to the FTC's actions, TikTok expressed disappointment that the investigation was referred to the Justice Department, stating that they have been working with the FTC for over a year to address concerns. The company strongly disagrees with the allegations and believes that many of them are factually inaccurate or have already been addressed.
The FTC's probe is separate from concerns in Congress about potential Chinese government access to American user data through TikTok, which has led to a bill requiring divestment from ByteDance or facing a U.S. ban. TikTok and ByteDance have until January 19, 2025, to decide whether to sell the company to a non-adversarial foreign owner or face the ban.
Billionaire Frank McCourt has organized a consortium of investors interested in acquiring TikTok from ByteDance, with former Treasury Secretary Steven Mnuchin and "Shark Tank" star Kevin O'Leary also expressing interest in forming investment groups for the acquisition.
The situation surrounding TikTok's ownership and regulatory challenges continues to evolve, with ongoing legal battles and potential divestment requirements. The outcome of these developments will have significant implications for the future of the popular social media platform.