CHICAGO — Lawyers have asked a federal judge to sign off on a $92 million settlement to end a class action accusing TikTok of violating several consumer privacy statutes, including Illinois' biometrics privacy law.
However, other trial lawyers have immediately stepped forward to oppose the settlement, saying it stops well short of the dollars TikTok's parent should be paying, and well short of the relief TikTok users should be receiving.
On Feb. 25, attorneys with the firms of Carlson Lynch, of Chicago, Fegan Scott, of Chicago, and Bird, Marella, Boxer, Wolpert, Nessim, Drooks, Lincenberg & Rhow, of Los Angeles, filed a motion asking Magistrate Judge Sunil Harjani to approve ending multidistrict litigation of 21 putative class actions against TikTok over its video-based social media. The settlement calls for attorneys to collect up to a third of the settlement, more than $30 million, in addition to expenses.
Named defendants include the U.S. and Chinese iterations of TikTok and ByteDance Technology, which are responsible for TikTok and its predecessor, Musical.ly. According to the plaintiffs’ lawyers, TikTok “infiltrates its users’ devices and extracts a broad array of private data including biometric data and content that Defendants use to track and profile TikTok users for the purpose of, among other things, ad targeting and profit.”
The accusations under Illinois’ Biometric Information Privacy Act involve allegations that TikTok employs facial recognition technology, analyzing images and videos to determine user ages, ethnicity and gender in order to recommend content and prevent minors from using the app, all without properly obtaining consent from users or adequately documenting its data retention policy.
According to the motion, “TikTok maintains a competitive advantage over other social media apps and profits from its use of improperly obtained data, all while failing to comply with the minimum requirements for handling users’ biometric data established by BIPA.”
The consolidated lawsuits also accused TikTok of violating the Computer Fraud and Abuse Act, Video Privacy Protection Act and the California Comprehensive Data Access and Fraud Act, among other state and common law claims. According to the motion, TikTok doesn’t disclose user data is stored and shared with international affiliates.
TikTok argued the foreign corporate entities aren’t properly included as defendants, and further said the arbitration and class-waiver provisions in its service agreements precluded legal action. The plaintiffs’ lawyers said those positions represent a threat to their clients’ chances of prevailing, thus making the settlement mutually beneficial.
Litigation began in November 2019 in California, with cases added and consolidated until the entire action was transferred to Illinois on Aug. 4, 2020. Two days later, President Donald Trump issued an executive order stating TikTok presented a national emergency. When a mediation session began Aug. 13, the plaintiffs’ lawyers said, “tremendous political pressure had mounted against TikTok, creating a unique settlement opportunity.”
The class would include any U.S. resident who used TikTok prior to issuance of a preliminary approval order, with an additional subclass of Illinois residents who used the app in Illinois to make videos. Money remaining after legal fees and be divided among verified eligible TikTik users on a prorated basis. To claim a share of the funds, TikTok users would need to submit claims.
Nationwide class members would be eligible to receive one share of the fund, while Illinois subclass members would be entitled to six shares each.
The settlement documents submitted to the court to this point do not indicate how much individual class members would receive, nor how many potential class members may be included in the settlement.
In addition to the settlement fund, TikTok agreed to several changes to its data retention policy, including deleting information from users who did not save or post the original content, making disclosures in accordance with the various laws the complain accused it of violating and initiating “a newly designed data privacy compliance training program for all TikTok employees and contractors.”
The proposed settlement has been met with quick objections from others suing TikTok.
Attorneys Scott Drury and Mike Kanovitz, of the firm of Loevy & Loevy, of Chicago, filed a brief on March 1, asking the judge to reject the settlement.
The Loevy firm is representing an objector, identified only as Mark S., who objected to an earlier settlement attempt in a different lawsuit against TikTok, with similar claims, but centered around the social media platform's alleged exploitation of minor children.
In their brief, the Loevy lawyers argued the settlement allows TikTok to get off easy. They argued a hearing in August 2020 demonstrated the litigation should be pegged at around $200 million - more than double the amount for which TikTok agreed to settle.
Further, they argued, the settlement doesn't account for the large presence of minor children among the TikTok users included in the settlement. Specifically, they note the settlement agreement allegedly rests heavily on the risk the plaintiffs might face in court, should a judge agree to send the matter to arbitration, instead of trial, under a clause included in TikTok's user agreement.
The Loevy objectors assert that arbitration agreement cannot be applied to minor children.
The Loevy objectors further argue the settlement doesn't do enough to protect those minor children TikTok users. They noted the agreement doesn't provide for any third party monitoring of TikTok to ensure the promised new user data deletions promised under the settlement agreement actually happen.
They accused TikTok of "gamesmanship," using the larger settlement deal to avoid other potentially costly lawsuits, as well.
The plaintiffs seeking settlement have been represented by attorneys Katrina Carroll, of Carlson Lynch, of Chicago; Elizabeth Fegan, of Fegan Scott, of Chicago; and Ekwhan Rhow, of Bird, Marella, Boxer, Wolpert, Nessim, Drooks, Lincenberg & Rhow, of Los Angeles.
TikTok has been represented by attorney Tony Weibell, of Wilson Sonsini Goodrich & Rosati, of Palo Alto, Calif.