Chinese social media giant Bytedance was dealt a stinging blow last September when Ireland’s data privacy watchdog issued it a record $370 million fine over its failure to properly safeguard the personal data of children using its app TikTok. New corporate filings suggest that Bytedance expects more fines like this to come. The company has explicitly set aside $1 billion to cover future fines 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 safeguards for teenage users. Only yesterday, the attorneys general of thirteen states and the District of Columbia filed separate lawsuits claiming that TikTok was designed to be used compulsively and had harmed children and teens as a result.
The $1 billion provision for future fines was revealed in corporate accounts for TikTok’s European operations filed this week with the United Kingdom’s Companies House. The accounts also showed that TikTok’s European revenues surged to $4.57 billion last year, up from $2.6 billion in 2022. Its losses have also nearly tripled to $1.3 billion in 2023, up from $512 million.
“The interpretation of the General Data Protection Regulation is still evolving and draft decisions in investigations by the data protection supervisory authorities are subject to review,” which creates uncertainty about what fines might be levied, Bytedance said in the corporate filing.
The scale of total fines and penalties facing TikTok on the continent could be even larger 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 European Union can fine companies up to 6% of global revenue for breaches of the DSA, or impose a ban.
The $1 billion provision includes the $370 million fine, the largest the company has faced to date, levied by Ireland’s Data Protection Commission in September 2023 over its handling of sensitive data from its teenage users and underage kids. TikTok has appealed the fine and the final penalty remains unsettled, but the short-form video app has faced a string of regulatory sanctions in recent years. In March, TikTok was ordered to pay $11 million by Italy’s competition watchdog over lax content checks. Last year, it faced a $16 million penalty from Britain’s data privacy regulator over handling children’s personal information, and a $1 million fine in the Netherlands and a $5.7 million fine in the United States in 2019 on similar grounds.
TikTok noted in its accounts that it also faces $11.4 billion of claims from a trio of Dutch privacy and consumer rights foundations. A Dutch court ruled that the claims were not admissible last September, but the case has since been escalated to the Dutch Court of Appeal. TikTok also faces a $1.1 billion legal claim over unlawful collection of data from a Portuguese consumer rights group.
“The above 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, so no provision has been made,” TikTok noted in its corporate filing.
In the United States, TikTok now faces a massive wave of litigation from a bipartisan group of state attorney generals alleging that 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 back in the court against a federal law passed in April that would force it to sell TikTok to a non-Chinese company by January 2025 or face a ban in the U.S. A ruling was expected by December 6 and the case is likely to be appealed to the Supreme Court.
