Social media giant TikTok has agreed to pay $92 million to settle a class action law suit in the US which was based on the allegation that TikTok stored the personal information of users without their consent.
The class-action lawsuit originated from twenty-one separate federal lawsuits filed against TikTok for wrongfully harvesting user data using facial recognition technology and sharing the data with third parties based in China.
Once the proposed settlement is approved by the U.S. District Court for the Northern District of Illinois, lawyers claim that this will be the largest privacy-related payout in history. The settlement will benefit approximately 89 million TikTok users in the U.S. who were affected due to the company's alleged harvesting and sharing of personal information.
As per the proposed settlement, TikTok allegedly uses artificial intelligence tools to identify facial features in user videos and suggests filters and stickers accordingly. It is also alleged that the ByteDance-owned company uses algorithms discreetly to detect users’ gender, age, and ethnicity.
“The TikTok App also has special effects features that enable users to alter, enhance, and modify their facial features in their video images. TikTok has explained that the technique employed to enable these special effects features is called “landmarking” and uses artificial intelligence to locate the position of a face or specific facial features within a video frame, e.g., the location of a nose relative to the location of the eyes,” the settlement read.
Announcing the settlement publicly, US law firm FeganScott LLC, which is among several law firms that are representing victims of TikTok's alleged privacy violations, said the firms have approached the court for preliminary approval of the $92 million settlement that TikTok has agreed to honour.
"The settlement, if approved by the court, would resolve claims that the social media company wrongfully collected its users’ biometric information and private data, and disclosed that information to third parties. In addition to creating a monetary fund for TikTok users, the settlement requires that TikTok initiate a new privacy compliance training program and take other steps to protect its users’ privacy going forward," the firm said.
TikTok has, however, denied all the allegations but said that to avoid a lengthy legal battle, it has decided to agree to a settlement. "While we disagree with the assertions, rather than go through lengthy litigation, we'd like to focus our efforts on building a safe and joyful experience for the TikTok community," the company said.
Earlier this year, TikTok agreed to strengthen its privacy controls for young users. Eric Han, TikTok's Head of US Safety, said that users within the age group of 13-15 will have private accounts by default with limited access to viewers and who can comment on their profiles. TikTok also introduced a mandatory age restriction of 16 years and above for users who could join Duet, a video collaboration feature, and Stitch, a feature to 'remix' content by picking elements out of an original clip.
Commenting on the settlement between TikTok and 89 million US citizens, Ilia Kolochenko, founder and CEO of ImmuniWeb, said that if approved by the judge, it will be a very favourable settlement for the wealthy defendant despite the comparatively large amount.
“The alleged conduct likely violates a wide spectrum of the US state and federal laws, and it seems that some private plaintiffs and state attorneys general didn’t participate in the lawsuit because of the pandemic. Importantly, this settlement does not preclude other claims TikTok may get in the future from plaintiffs who didn’t participate in the class action.
“In any case, however, this settlement is a colourful example that lack of transparency or questionable privacy practices will not be tolerated in the US anymore. The US now vigorously follows the EU way of strong privacy protection, both on federal and state level, whereas California is a North Star for other states.
“Under Joe Biden's administration, we will expect more regulatory scrutiny and probably even a federal privacy law for all 50 states. They should, however, be prudent not to overregulate and make the business of some companies impossible by new compliance costs,” he added.