MDL Court Approves $92M TikTok Privacy Litigation Settlement

On Thursday, Judge John Z. Lee granted the plaintiffs’ motion over the arguments of several objectors who claimed that the proposed terms of the settlement are unfair. In the consolidated lawsuit, TikTok users complained that subsidiaries of China’s ByteDance illegally harvested and collected their sensitive personal and biometric information to track and target them, and in some instances provided that data to third-parties.

The opinion explained that beginning in April 2020, almost two dozen class actions were filed in four judicial districts, two in California and two in Illinois. The Judicial Panel on Multidistrict Litigation consolidated the suits and transferred them to Chicago, Illinois on Aug. 12, 2020.

The very next day, counsel for TikTok engaged with a raft of plaintiffs’ lawyers in a mediation. Reportedly, the defendant was motivated to resolve the dispute because then-President Trump threatened to ban TikTok from the United States, and eventually did so the following month. The litigants reportedly reached a settlement that remained confidential for months. In February 2021, the plaintiffs moved for approval.

Judge Zee wrote that the monetary fund will compensate 89 million TikTok users, a large percentage of whom are minors. In addition, the court highlighted the injunctive relief that the settlement will provide, including TikTok’s commitment to refrain from collecting users’ biometric and location data and to retain a third-party firm tasked with the role of reviewing and verifying its data privacy training for a three-year period.

The court weighed the likelihood of class certification, the settlement’s fairness, reasonableness, and adequacy, and assessed the procedural elements of the agreement such as its notice plan and opt-out procedure. Judge Zee concluded that the eight-figure settlement meaningfully compensates the class and is proportionate to the strength of the plaintiffs’ case.

As to the risk of further litigation, the court advised that TikTok has several possible defenses that might warrant transferring the case to arbitration or dismissing it altogether. Specifically, Judge Zee underscored TikTok’s contention that it does not use facial recognition technology. Finally, the court considered but dismissed the objectors’ arguments in view of its conclusions about the settlement’s appropriateness and procedural validity.

TikTok is represented by Wilson Sonsini Goodrich & Rosati. Co-lead counsel for the plaintiffs and putative class are Carlson Lynch LLP, Fegan Scott LLC, and Bird, Marella, Boxer, Wolpert, Nessim, Drooks, Lincenberg & Rhow P.C..