$100 million to avoid a courtroom showdown—that's essentially the deal TikTok just struck with the state of Alabama. With the trial originally slated to begin next week, the case was settled at the eleventh hour. TikTok agreed to pay Alabama at least $100 million and committed to a series of measures restricting how underage users can use the app.
Alabama sued TikTok and its Chinese parent company ByteDance last year, alleging the app was deliberately designed to get teens and children hooked on social media. According to Reuters, this marks the first time TikTok has settled a social media addiction lawsuit with an individual state. But it's just one of many similar cases TikTok is facing—by 2024, more than a dozen states had filed comparable lawsuits accusing the app of being designed to addict young users.
Beyond the payout, the settlement requires TikTok to overhaul its product design. Underage users will now be capped at two hours of daily usage, with parents able to dial that limit down further through new parental control features. The app will also curb its infinite-scroll mechanism and restrict late-night usage. On top of that, TikTok will ban beauty filters and roll out a non-personalized content feed for younger users. If TikTok fails to deliver on these changes, it could face fines of up to $300 million.
The New York Times notes that these measures closely mirror what Meta agreed to when it settled social media addiction lawsuits with 47 states. Meta's settlement, however, came with a price tag of $18 billion—putting TikTok's starting figure of $100 million into stark perspective.
This isn't the first time this year TikTok has paid up over concerns involving minors. Back in August, TikTok agreed to pay $400 million to the U.S. Department of Justice to settle a lawsuit alleging violations of children's privacy laws. At the time, the DOJ acknowledged that TikTok's policies—and even its ownership structure—had undergone major changes since the suit was filed. In January of this year, TikTok established an independent U.S. entity, handing control of the app to non-Chinese investors.
