A federal judge in Los Angeles said Friday he was inclined to reject the portion of TikTok's $400 million Justice Department settlement that would terminate a 2019 FTC consent decree, casting doubt on whether the company will owe the full settlement amount.
A federal judge indicated Friday he would reject a key component of TikTok and ByteDance's proposed $400 million settlement with the U.S. Justice Department, throwing a portion of the deal into doubt just weeks after it was announced.
U.S. District Judge George H. Wu in Los Angeles said he was inclined to reject the settlement's request to terminate a 2019 consent decree imposed on TikTok's predecessor, Musical.ly, by the Federal Trade Commission.
Wu scheduled a hearing for Monday. Without further details, the court "cannot determine that it constitutes a durable remedy or that termination is suitably tailored to the asserted change in circumstance," he wrote in his tentative ruling.
The settlement, agreed to in August, calls for TikTok to pay $300 million immediately and an additional $100 million contingent on termination of that consent decree. The judge's reluctance to end the decree puts the full settlement amount in question.
The consent decree stems from a 2019 FTC finding that Musical.ly — later folded into TikTok — knew children were using the platform but failed to obtain parental consent before collecting names, email addresses, and other personal information. Musical.ly paid a $5.7 million fine to resolve those allegations. The decree requires TikTok to maintain specific reporting and record-keeping obligations through 2029.
The underlying Justice Department lawsuit, filed in 2024, accused TikTok and ByteDance of violating a law requiring online services aimed at children to obtain parental consent before collecting data from users under 13.
In arguing for the consent decree's termination, the government said TikTok had undergone significant changes since the lawsuit was filed, including to its ownership structure, management, compliance functions, and privacy practices.
Among those changes: in January, ByteDance agreed to establish a majority American-owned joint venture designed to safeguard U.S. user data and avert a potential ban on an app used by more than 200 million Americans.
The TikTok U.S. joint venture noted in a court filing that it now requires all users to enter their date of birth to access the platform and said it developed age-moderation systems capable of identifying children under 13 who misrepresented their age.
TikTok and the Justice Department did not respond to requests for comment on Saturday.
Judge Wu's reluctance to dissolve the FTC's longstanding oversight framework signals that courts may apply a high bar to claims of reformed conduct, even when backed by the government — a dynamic that could complicate future regulatory settlements involving platform companies and child privacy.
Sara Montes de Oca is the Editor in Chief of TechEchelon. Previously a correspondent and producer in Washington, D.C., covering business, finance, and politics.
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