A California federal judge has tentatively rejected part of the U.S. government’s $400 million privacy settlement with TikTok, potentially keeping additional court oversight of the social media platform in place.
U.S. District Judge George H. Wu tentatively denied a request to vacate an earlier order involving Musical.ly, the predecessor to TikTok that was acquired by ByteDance. The order includes privacy protections for users under the age of 13.
Judge Keeps Earlier TikTok Privacy Order in Place
Wu said neither TikTok nor the U.S. government had demonstrated that the obligations under the earlier order were no longer necessary.
The judge also found that changes to TikTok’s ownership structure, compliance measures and the latest settlement did not establish that the company had substantially complied with the existing order or that its protections were no longer needed.
As a result, the judge indicated that he intends to retain oversight of TikTok’s privacy practices.
How the $400 Million Settlement Works
The ruling could affect part of TikTok’s $400 million settlement with the U.S. government, announced in August to resolve allegations concerning children’s privacy.
Under the settlement, TikTok agreed to pay $300 million immediately, while another $100 million was contingent on the earlier consent decree against Musical.ly being vacated. The Justice Department confirmed that structure in its announcement.
The underlying case involved allegations that TikTok violated federal children’s privacy requirements, including rules concerning the collection of personal information from users under 13 without the required parental consent.
The Justice Department has emphasized that the claims resolved by the settlement were allegations only and did not constitute a determination of liability.
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Why the Musical.ly Consent Decree Matters
The earlier order dates back to actions involving Musical.ly, which was later acquired by ByteDance and incorporated into TikTok.
The continued existence of that order means TikTok may remain subject to additional court oversight of privacy practices involving younger users, even after reaching the new settlement with the U.S. government.
TikTok Faces Continued U.S. Regulatory Scrutiny
The decision adds another layer to TikTok’s long-running legal and regulatory challenges in the United States.
TikTok’s U.S. operations underwent a major ownership restructuring earlier this year involving American investors, following years of government scrutiny over the platform’s ownership and operations.
The Justice Department has also said TikTok has made significant changes to its ownership, management, compliance functions and privacy practices since the government’s 2024 complaint.
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What Happens Next?
The judge’s decision remains tentative. According to the report, a hearing on the government’s request to dismiss the existing consent decree is scheduled for September 21.
The outcome of that proceeding could determine whether the earlier order remains in place and whether the conditions connected to the additional $100 million payment are satisfied.
Impact on TikTok and Financial Markets
The decision increases regulatory uncertainty around TikTok’s U.S. operations and could keep compliance costs and legal oversight in focus. For technology-market participants, traders will watch the September 21 hearing and any further changes to TikTok’s U.S. structure for potential implications for ByteDance and the broader regulatory environment facing large technology companies.
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