The United States government is reportedly on the verge of striking a massive $400 million (about Sh 52 billion) settlement deal with TikTok over allegations that the video-sharing giant illegally collected and stored children’s personal data without parental consent.
According to reports by Reuters and ABC News, the proposed agreement would resolve a high-profile lawsuit filed by the U.S. Department of Justice and the Federal Trade Commission against TikTok and its Chinese parent company, ByteDance.
The case centers on alleged violations of the Children’s Online Privacy Protection Act (COPPA), a U.S. law designed to shield children under 13 from unauthorized data collection online.
American authorities accused TikTok of allowing millions of underage users onto the platform and collecting sensitive personal information without obtaining proper parental approval.
The lawsuit was initially filed in 2024 during former President Joe Biden’s administration, but negotiations reportedly intensified under President Donald Trump’s current government.
Sources familiar with the talks told ABC News that TikTok’s board was expected to vote on the settlement terms this week.
One of the most controversial aspects of the proposed deal is how the money could be used.
Reports indicate that officials in Trump’s administration have discussed channeling the settlement funds toward Washington D.C. “beautification” projects, including a proposed triumphal arch near Arlington National Cemetery.
The idea has reportedly sparked legal and ethical concerns within government circles because such settlements are traditionally meant to compensate or protect affected victims.
TikTok has faced mounting pressure globally over child safety and privacy concerns in recent years.
In 2019, the platform, then operating under Musical.ly and ByteDance, paid a separate $5.7 million fine to settle earlier COPPA allegations brought by the FTC.
Since then, regulators in several countries have continued scrutinizing the app.
European authorities have investigated TikTok over minors’ safety and advertising transparency, while Kenya’s Communications Authority recently launched a probe following allegations involving exploitative content featuring minors on the platform.
The latest settlement talks come at a sensitive moment for TikTok in the U.S., where the company has also been battling national security concerns linked to its Chinese ownership.
ByteDance has been under pressure to restructure TikTok’s American operations or risk facing restrictions in the country.
Reuters reported that the company recently reached a deal framework involving a majority American-owned joint venture aimed at safeguarding U.S. user data.
Despite TikTok repeatedly insisting that it prioritizes user safety and privacy, critics argue the platform has struggled to keep children off the app and prevent the misuse of young users’ data.
If finalized, the $400 million settlement would rank among the largest child online privacy penalties ever imposed on a social media platform in the United States.
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