A group of American parents are suing TikTok as they claim that the application collects and sends data from their minor children to the Chinese government. The suit is able to bypass the company’s arbitration clause, which would normally make it impossible to sue, due to the clause not applying to minors. TikTok denies the parents’ claim, stating that the information, including biometrics as well as other personal information that the application begins to collect as soon as you download it, is not provided to the Chinese government. The action comes amidst a storm of crises for the Chinese social media provider.
Technology experts working with the parents involved in what has now become a class action lawsuit, disagree, arguing that the company provides the data to the Chinese government via third parties in order to produce the illusion of not having ties to the Chinese state and the Chinese Communist Party. The lawsuit builds on government claims regarding Chinese surveillance through the application. Additionally, the lawsuit is similar to an earlier case against Facebook under the same Illinois law, the Biometric Information Privacy Act. That case resulted in a settlement of $650 million, a precedent that could be exceeded in this latest case against TikTok.
NPR reports that the TikTok’s legal team does argue, however, that it would be legal to provide some information to Beijing if it chose to do so. Though, the company’s lawyer maintains that no such information transfers have occurred. The Trump administration has recently labeled TikTok and other Chinese technology as “untrusted” as the lawsuit is part of a broader pattern of challenges to suspected Chinese foreign intelligence operations.
How This Might Impact A Microsoft TikTok Purchase
TikTok is currently in talks to sell its U.S. operations, as well as its operations within select other regions, due to pressure from the United States government. Zhang Yiming, the CEO of ByteDance, TikTok’s parent company, has criticized the Trump administration’s actions as “unreasonable” while noting that the company has no choice but to cooperate with the demands to sell or face a ban on TikTok’s operations within the American market. The new lawsuit introduces new risks and liabilities that could impact the ongoing talks with Microsoft regarding the sale.
Thus, there will be pressure to introduce a swift settlement. However, Microsoft will likely continue to see the value of the application as a means of making a decisive entry into the social media market. The value of TikTok is still significantly greater than the amount of the likely settlement and Microsoft will be able to leverage experience in the courts as well as in establishing settlements, if it does “inherit” the case.
Source: NPR