WASHINGTON (AFP) - The fast-growing, Chinese-owned video sharing network TikTok agreed to pay a US$5.7 million (S$7.6 million) fine to US authorities to settle charges that it illegally collected personal information from children, officials said on Wednesday (Feb 27).
The Federal Trade Commission said the penalty by the social network, which had been known as Musical.ly, was the largest ever in a children's privacy investigation.
The social network, which has been surging in popularity with young smartphone users and taking over from rivals like Facebook, Instagram and Snapchat, failed to obtain parental consent from its underage users as required by the Children's Online Privacy Protection Act, FTC officials said.
"The operators of Musical.ly - now known as TikTok - knew many children were using the app, but they still failed to seek parental consent before collecting names, email addresses, and other personal information from users under the age of 13," said FTC chairman Joe Simons.
"This record penalty should be a reminder to all online services and websites that target children: We take enforcement of COPPA very seriously, and we will not tolerate companies that flagrantly ignore the law."
TikTok claimed some 500 million users worldwide last year, making it one of the most popular worldwide apps.
Owned by China's ByteDance, it expanded its reach in the US with the merger with Musical.ly.
Teens have been flocking to the service, which allows them to create and share videos of 15 seconds.
According to the FTC, the company required users to provide an email address, phone number, username, first and last name, a short biography, and a profile picture.
The consumer protection regulator said 65 million accounts have been registered in the United States.
Officials said the company knew that many of its users were under 13 and should have taken greater precautions.
"In our view, these practices reflected the company's willingness to pursue growth even at the expense of endangering children," said a statement from FTC commissioners Rohit Chopra and Rebecca Kelly Slaughter.
"The agency secured a record-setting civil penalty and deletion of ill-gotten data, as well as other remedies to stop this egregious conduct."
TikTok has faced criticism around the world for featuring sexually suggestive content inappropriate for children.
TikTok said in a statement it would create a "separate app experience" for younger users with additional privacy protections as part of its agreement with regulators.
"It's our priority to create a safe and welcoming experience for all of our users, and as we developed the global TikTok platform, we've been committed to creating measures to further protect our user community - including tools for parents to protect their teens and for users to enable additional privacy settings," the statement said.