TikTok Sets Aside €1 Billion for Future Fines
Chinese social media company Bytedance is currently facing significant legal challenges and regulatory scrutiny regarding its popular app, TikTok. In September 2023, Ireland’s data privacy authority imposed a record fine of €370 million for failing to adequately protect the personal data of minors on the platform. In light of these ongoing issues, Bytedance has set aside €1 billion to address potential future fines from European regulators. This financial provision reflects the company’s acknowledgment of the evolving landscape of data protection laws and the increasing likelihood of additional penalties.
Recent corporate filings reveal that TikTok’s European revenues increased to €4.57 billion in 2023, a notable rise from €2.6 billion the previous year. However, the company also reported escalating losses, which nearly tripled to €1.3 billion. The uncertainty surrounding the General Data Protection Regulation (GDPR) and the ongoing investigations by various supervisory authorities complicate Bytedance’s financial outlook. The European Commission has initiated an investigation into TikTok under the Digital Services Act (DSA), which could result in fines of up to 6% of global revenue for violations.
The €1 billion provision includes the substantial €370 million fine imposed by Ireland, marking the largest penalty the company has encountered thus far. TikTok has appealed this fine, and the ultimate decision remains pending. Additionally, the company has faced various penalties in recent years, including an €11 million fine in Italy and a €16 million sanction in the UK for mishandling children’s data. TikTok is also contending with claims totaling €11.4 billion from Dutch privacy organizations, as well as a €1.1 billion lawsuit from a Portuguese consumer rights group regarding unlawful data collection.
In the United States, TikTok is facing a wave of lawsuits from state attorneys general who allege that the app’s design promotes compulsive usage detrimental to teenagers’ mental health. Furthermore, Bytedance is challenging a federal law that could force the sale of TikTok to a non-Chinese entity by January 2025, with a ruling expected by December 6. The outcome of this case may ultimately be appealed to the Supreme Court, highlighting the ongoing legal battles faced by the company.
Source: TikTok Sets Aside $1 Billion To Cover Future European Data Privacy Fines
