TikTok’s parent company ByteDance agrees to $92 million settlement for user privacy in US
Published: Feb 26, 2021 01:37 PM

Bytedance Photo:VCG

ByteDance, the parent company of TikTok, has agreed to a $92 million class-action settlement for data privacy claims from some US TikTok users, media reported, citing documents filed in the US District Court in Illinois.

The invasion of user privacy and US ban are two different things. The ban was said to be mainly for national security purposes, and includes some content about collecting user data, while the settlement is the result of a class-action lawsuit targeting ordinary users, Zhang Xiaorong, director of the Cutting-Edge Technology Research Institute, told the Global Times on Friday.

But Wang Peng, an associate professor at the Gaoling School of Artificial Intelligence at the Renmin University of China, told the Global Times on Friday that the settlement and the US ban are actually related.

"With the Biden administration taking office, China-US relations have been improved to a certain extent; at least the US began to seek dialogue with China. The relationship between China and the US will affect the scale of American law enforcement," said Wang.

The Biden administration placed a hold on proceedings involving the TikTok ban on February 10 at a US court, and on February 11 similarly halted the former Trump administration's ban on WeChat, media reported.

"The settlement of the class-action lawsuit is good news for TikTok's operations in the US but at the same time it also increases the pressure on the company to optimize its algorithms. It could also have a knock-on effect in Europe," said Zhang.

The current artificial intelligence (AI) technology is mainly based on deep learning algorithms, which need a large amount of data to "feed" the training and adjust the model more accurately. This data comes from a large number of users' network behaviors and registration information. Therefore, any AI company using deep learning would easily violate users' privacy, Zhang noted.

Actually, TikTok is facing another complaint in the EU, which analysts said is stricter on digital economy, including data privacy and digital taxes, than China or the US.

On February 16, the European Consumer Organization filed a complaint against TikTok for falling foul of multiple breaches of EU consumer rights and failing to protect children from hidden advertising and inappropriate content, according to a press release by the BEUC.

In addition to BEUC's complaint, consumer organizations in 15 countries have alerted their authorities and urged them to investigate the Chinese social media giant's conduct.

"TikTok has come under pressure from the EU's relatively robust privacy regime," said Wang.

But Wang added TikTok is not the only internet company that faces heavy regulation, for example, Facebook. In other words, Internet companies that have large businesses will be bound to face the relevant strict scrutiny.

"Such settlements in the US and the complaint from Europe reflect that TikTok really did well in European and American markets in terms of business scale," Wang noted.

Last year, Facebook agreed to pay $550 million to settle charges that its facial recognition feature violated the same Illinois biometric privacy law that TikTok was accused of violating, per media reports.

"The infringement of user data is subject to court judgment. If the court decided there was a violation of user data, it would be a big issue. Both Facebook and TikTok opted for big payouts to avoid trouble," Zhang added.
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