TikTok has begun making payments to users impacted by a data privacy violation. The settlement, worth $92 million, is no spare change — but if its potential plans for a shopping mall tell us anything, it doesn’t look like TikTok will change its behavior.
Here’s what to know about TikTok’s class action data privacy settlement, plus what its future plans for data-fueled commerce may be.
TikTok data privacy settlement amounts to $92 million — who gets it?
TikTok must pay a $92 million settlement at both the national level and for a subclass in Illinois.
According to tiktokdataprivacysettlement.com, TikTok “violated federal and state law by collecting and using, without sufficient notice and consent, plaintiffs’ personal data.”
For the nationwide class, anyone who filed a claim, lives in the U.S., and used the app prior to Sept. 30, 2021, is eligible. The Illinois subclass is eligible for its own corner of the funds totaling $1.1 million.
The deadline to file a complaint was March 1, 2022. The site says anyone in the settlement class upon court approval will receive their payment electronically unless they opted for another method.
Judge John Z. Lee approved the settlement in an Illinois court. The final judgment requires TikTok to “delete all pre-uploaded user-generated content collected from users who did not ‘save’ or ‘post’ the content.” It also requires “newly designed training on compliance with data privacy laws and company procedures for all relevant incoming employees and contractors, and annual training thereafter.”
TikTok can no longer use the app to collect or store biometric identifiers, collect location data, collect data from TikTok users’ clipboards, transfer or store U.S. data outside of the U.S., or pre-upload user-generated content.
The TikTok settlement payments are coming from Hawk Marketplace and elsewhere.
Payments are reportedly coming from a platform called Hawk Marketplace, a “reward delivery platform” that also functions as a solution for settlement payouts. Despite the fact it’s legit, be wary of scams relating to the TikTok settlement.
Other methods of payment are coming as well, including PayPal and Venmo.
Here's how a digital shopping mall fits into the TikTok data privacy picture.
Despite all of the orders by the court, TikTok may proceed with a shopping mall that it feeds with an immense amount of user data. TikTok reportedly has plans to expand on social commerce, using data and behavior to fuel e-commerce optimization through its own type of marketplace.
Nothing is set in stone, but it would make sense for them to move in that direction despite data privacy concerns.
Insider Intelligence analyst Jasmine Enberg told reporters, “TikTok pioneered a new form of ‘viral commerce’ that we haven’t seen replicated on any other platform. It’s a kind of shopping behavior that’s driven by a younger user base, and one whose purchasing habits are driven by a fear of missing out on the newest cultural trend. That sense of FOMO [fear of missing out] is ultimately what leads to products flying off virtual and physical shelves."