The Federal Trade Commission (FTC) announced Tuesday that it has referred a complaint against TikTok and parent company ByteDance to the Justice Department over an investigation into alleged violations of a law intended to protect children's privacy online.
The FTC explained that it was investigating TikTok and ByteDance as part of a compliance review into Musical.ly, which was acquired by TikTok and had been subject to a 2019 settlement with the regulator over violations of the Children's Online Privacy Protection Act (COPPA).
"The Commission also investigated additional potential violations of COPPA and the FTC Act," the agency wrote in a statement. "The investigation uncovered reason to believe named defendants are violating or are about to violate the law and that a proceeding is in the public interest, so the Commission has voted to refer a complaint to the DOJ, according to the procedures outlined in the FTC Act."
"Although the Commission does not typically make public the fact that it has referred a complaint, we have determined that doing so here is in the public interest," the FTC added.
TikTok said in a statement it has been working with the FTC and that it's disappointed the regulator referred the investigation to the Justice Department.
"We've been working with the FTC for more than a year to address its concerns," a TikTok spokesperson told FOX Business. "We're 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."
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"We're proud of and remain deeply committed to the work we've done to protect children and we will continue to update and improve our product. We offer an age-appropriate experience with stringent safeguards, proactively remove suspected underage users, and have voluntarily launched safety features such as default screentime limits, family pairing, and privacy by default for minors under 16," the spokesperson added.
The FTC's probe is distinct from concerns that prompted Congress to pass a bill requiring that TikTok be divested from China-based parent company ByteDance or face a potential U.S. ban over concerns about the ability of the Chinese government to improperly access data from American users or to use the platform to spread propaganda or stifle certain viewpoints.
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TikTok and ByteDance have until Jan. 19, 2025, to decide whether to sell the company to an owner who isn't from a foreign country considered to be an adversary of the U.S. or else the ban would take effect. TikTok and ByteDance have challenged the law in court.
The situation has prompted billionaire Frank McCourt to form a consortium of investors looking to buy TikTok from ByteDance.
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Former Treasury Secretary Steven Mnuchin and Kevin O'Leary, chair of O'Leary Ventures and star of the TV show "Shark Tank," have also said they're interested in forming investment groups to acquire TikTok.
Reuters contributed to this report.
