TikTok to pay $100m and limit daily child usage in US settlement

TikTok and its parent company ByteDance have agreed to pay Alabama $100m and overhaul how the app operates for young users in the state, settling a lawsuit that accused the platform of deliberately hooking children on its features, according to BBC News.

The agreement was reached just before a jury trial was due to start on Monday, according to BBC News. It represents TikTok's first settlement with a US state over allegations that its design fosters compulsive use among minors.

Under the terms of the deal, TikTok must roll out several new safety measures, including a two-hour daily time cap for children, along with restrictions that block use overnight and during school hours, BBC News reported. Those limits are set to begin immediately, though the changes will apply only within Alabama.

Katherine Robertson, chief counsel in the Alabama Attorney General's office, told the BBC the state was satisfied with the result. She said the settlement amounted to tough court-ordered reforms that would force TikTok to overhaul practices the state considered central to what she called the "war on childhood."

Robertson said the two sides had been in mediation ahead of the scheduled trial, and that the final terms reflected the state's last offer to the company.

While the usage limits take effect right away, TikTok has as long as a year to put in place additional commitments, such as new systems for verifying users' ages, BBC News reported. Much of the settlement's structure resembles an agreement Meta reached in August with attorneys general from 52 states and territories.

The settlement also includes a financial penalty clause: TikTok could be required to pay Alabama as much as $300m if it fails to meet the agreed conditions, according to BBC News. The initial $100m payment must reach the state within 45 days.

Beyond time restrictions, the deal requires TikTok to give parents stronger tools to oversee their children's activity on the app, add limits on certain content, and introduce further age-verification methods, BBC News reported. The company will also curb the ability of adult users to find accounts belonging to children and must alert parents when "suspicious interactions" occur between teenagers and adults on the platform. Cosmetic filters will be banned entirely for child users under the agreement.

A spokesperson for TikTok USDS said the company remains committed to providing what they described as a safe environment where users can express themselves and connect with others, adding that the settlement builds on existing efforts to strengthen protections for teenage users, according to BBC News.

The case is the latest in a wave of legal action against major social media firms over claims their platforms harm young users. TikTok has also previously agreed to a $400m settlement with the US government tied to child privacy violations, while Meta has faced billion-dollar claims over similar allegations, BBC News reported.

Earlier this year, TikTok restructured its corporate ownership, handing control of its US operations to a new group of investors, while the rest of the business continues to be run from China. ByteDance, TikTok's Chinese parent company, remains a minority stakeholder in the US venture and was named as a party in Friday's settlement, according to BBC News.