Insiders blow lid off 'sweetheart' deal TikTok reached with Trump DOJ
The Justice Department's $400 million settlement with TikTok quietly resolved more than the child-safety claims it publicized — it also erased a federal monitoring requirement and left unaddressed a far more alarming allegation that never made it into the case.
A former Federal Trade Commission official told the New York Post that investigators had uncovered evidence TikTok exposed American users' personal data, including Social Security and bank account numbers, on an internal messaging system accessible to employees in China.
"We knew that China-based employees accessed information contained within this messaging service that included American users' personally identifiable information," the former official said. But that finding never appeared in the DOJ's lawsuit, which focused instead on accounts belonging to children under 13.
Of the $400 million total settlement, $300 million resolved the child-privacy claims themselves. The remaining $100 million paid to vacate a 2019 consent order that had required TikTok to submit to ongoing, independent monitoring of its own data practices, and critics say that provision, not the headline fine, is the more consequential part of the deal.
"By contrast, the DOJ's settlement with TikTok places the company under no new obligations," said Haley Hinkle, policy counsel for the online safety group Fairplay. "Even worse, it relieves TikTok of its compliance and monitoring obligations under the 2019 consent decree. Everyone who cares about children's privacy and safety should be appalled by this sweetheart deal."
Bill Kovacic, who chaired the FTC from 2008 to 2009, said agencies typically justify ending a consent order with a detailed public accounting of how a settlement figure was reached.
"If this were a math exam, show your work," Kovacic said. "Ordinarily, the public is owed an explanation for that." The DOJ hasn't disclosed how many violations it attributed to TikTok, despite a statutory cap that could have pushed potential penalties into the billions.
A senior DOJ official defended the settlement, saying TikTok had undergone a change in ownership and had significantly altered its data practices since the lawsuit was filed. "The TikTok that we settled with in this case was not the same company that the lawsuit was brought against," the official said.
The deal was announced in a Friday afternoon press release, timing often used to limit media attention.
It comes as TikTok has undergone a Trump-backed restructuring giving Oracle – co-founded by Trump ally Larry Ellison – and other U.S. investors control while ByteDance keeps a 19.9 percent stake, which was meant to ease the same security concerns underlying the unreported China-access claims.
TikTok did not respond to a request for comment.