The company that owns TikTok has set aside a ten-figure sum to pay regulatory fines in Europe as it faces investigations and lawsuits over its mishandling of children’s data.
New corporate documents suggest Bytedance expects more fines like this. The company has set aside $1 billion to cover future penalties from European privacy regulators.
Bytedance has faced a barrage of lawsuits and investigations from regulators around the world over TikTok’s «addictive» design, handling of user data and lack of protections for teenage users.
Yesterday, attorneys general from thirteen states and the District of Columbia filed separate lawsuits alleging that TikTok was designed to be used compulsively and, as a result, harms children and adolescents.
Uncertainty about data protection
The $1 billion provision for future fines was disclosed in corporate accounts for TikTok’s European operations filed this week with the UK’s Companies House.
The accounts also showed that TikTok’s European revenues soared to $4.57 billion last year, up sharply from $2.6 billion in 2022. However, its losses also nearly tripled to $1.3 billion in 2023, up from $512 million.
«The interpretation of the EU General Data Protection Regulation continues to evolve and draft decisions by supervisory authorities are subject to review,» creating uncertainty about the fines that could be imposed, Bytedance said in the corporate filing.
The increase in total fines and penalties TikTok faces on the continent could be even higher than the $1 billion provision in its 2023 accounts. The European Commission opened an investigation into TikTok under the Digital Services Act (DSA) in February 2024. The EU can fine companies up to 6% of global revenue for DSA violations, or impose a ban.
The $1 billion forecast includes the $370 million fine, the largest the company has faced to date, imposed by Ireland’s Data Protection Commission in September 2023 for its handling of sensitive data of its teenage and underage users.
TikTok appealed the fine and the final penalty remains unresolved, but the video app has faced a series of regulatory sanctions in recent years. In March, it was ordered to pay $11 million by Italy’s competition watchdog for lacking content controls. Last year, it faced a $16 million fine from Britain’s data privacy regulator for its handling of children’s personal information, and in 2019, it faced a $1 million fine in the Netherlands and $5.7 million in the United States for similar reasons.
In its accounts, the company said it also faces claims worth $11.4 billion from three Dutch privacy and consumer rights foundations. A Dutch court ruled the claims inadmissible last September, but the case has since been referred to the Dutch Court of Appeal.
It also faces a $1.1 billion lawsuit for illegally collecting data from a Portuguese consumer rights group.
«These cases are still at a procedural stage and given the lack of legal precedent, it is impracticable for the group to estimate the potential financial impact of any such claim, and no provision has therefore been made,» TikTok said in its corporate filing.
In the United States, the platform is facing a massive wave of litigation from a bipartisan group of state attorneys general alleging it pushed design features to encourage compulsive use of its app at the expense of the mental health of American teenagers.
Bytedance is also fighting in court against a federal law passed in April that would require it to sell TikTok to a non-Chinese company by January 2025 or face a ban in the country. A ruling is expected on December 6 and the case is likely to be appealed to the Supreme Court.
