TikTok fined €345 million by the Irish Data Protection Commissioner

On Friday, TikTok was handed a fine of €345 million (US$370 million) by the Irish DPC.

TikTok fined €345 million by the Irish Data Protection Commissioner
Facebook, TikTok, Twitter, YouTube and Instagram apps are seen on a smartphone in this illustration taken, July 13, 2021. REUTERS/Dado Ruvic/Illustration/File Photo

The backstory: TikTok, that globally popular video-sharing app owned by China’s ByteDance, has been tangled up in a web of high-profile controversies this year, mostly revolving around security concerns. These worries have resonated across Western nations, including the EU, the US and Canada.

European powerhouses like the European Parliament, the European Commission and the EU Council made headlines by banning TikTok from their staff's mobile devices. The US and Canada have also restricted the app on government-issued devices, even raising the idea of a potential nationwide TikTok ban in the US.

What adds gravity to this situation is the EU's General Data Protection Regulation (GDPR), implemented in 2018. It allows regulators to hand out big fines for non-compliance, up to 4% of a company's global revenue.

To address concerns about child safety, TikTok introduced strict parental controls in 2020 and adjusted the default settings for users under 16 to "private" the next year. In March, TikTok's CEO, Shou Zi Chew, testified before the US Congress, with the spotlight primarily on child safety within the app.

More recently: The Irish Data Protection Commissioner (DPC) has a record of imposing fines on tech giants, including Meta. It’s often the main regulator for tech firms in Europe since many of them have operations in Ireland. By the end of 2022, the DPC had 22 ongoing inquiries involving multinational corporations headquartered in Ireland.

Last September, TikTok was facing a £27 million (US$33 million) fine in the UK for mishandling children's data, which was ultimately reduced to £12.7 million (US$16 million) following an investigation that exposed irregular practices around children's data usage on the platform.

The development: On Friday, TikTok was handed a fine of €345 million (US$370 million) by the Irish DPC.  The company is in trouble for how it handled kids' personal data, specifically during the period between July 31 to December 31, 2020.

What makes this a big deal is that it marks the first time TikTok has faced such substantial trouble from the DPC. The DPC called TikTok out on a couple of things, like making accounts of users under 16 "public" by default in 2020. Plus, TikTok didn't always verify if someone was indeed a child's parent or guardian when using the "family pairing" feature.

TikTok disagreed with the DPC’s decision to fine the company, especially regarding the size of the fine. It argues that many of the issues raised had already been addressed through measures implemented before the DPC's investigation, which kicked off in September 2021.

TikTok is now pledging to clear things up by providing clarity on what's public and what's private. It also plans to set private accounts as the default for 16 and 17-year-olds signing up, starting this month. The DPC has given TikTok three months to fix the issues raised.

Key comments:

"There are laws in place to make sure our children are as safe in the digital world as they are in the physical world. TikTok did not abide by those laws," said UK Information Commissioner John Edwards in April.

"TikTok is a platform for users aged 13 and over," said a TikTok spokesperson to CNBC. "We invest heavily to help keep under 13s off the platform, and our 40,000-strong safety team works around the clock to help keep the platform safe for our community."

"In view of cybersecurity concerns, in particular regarding data protection and collection of data by third parties, the European Parliament has decided, in alignment with other institutions, to suspend as from 20 March 2023, the use of the TikTok mobile application on corporate devices," said the European Parliament in a statement.