TikTok’s decision to form an investor-led US entity is expected to calm years of tension in Washington over national security and possible data access by China. But while that chapter may be nearing its end, regulators are already turning their attention to a different set of concerns: how the platform protects user privacy and safeguards children. According to Bloomberg, the company’s new structure does not shield it from mounting legal and regulatory pressure in the United States.
The reorganization arrives at a moment when lawmakers and enforcement agencies are aggressively examining how digital platforms handle sensitive data and how their products affect younger users. TikTok has long been in regulators’ sights on both fronts. Per Bloomberg, officials have made clear that TikTok USDS Joint Venture LLC will face the same expectations as the company’s prior US operations when it comes to complying with consumer protection and privacy laws.
“Consumer protection, privacy and safety, and the impact of the platform on children and teens, and data scrutiny are the questions that become more in the forefront now with this sale,” said Amy Mushahwar, chair of the data privacy, security, safety and risk management practice at Lowenstein Sandler LLP.
State attorneys general have reinforced that message. More than a dozen states are continuing lawsuits against TikTok related to children’s safety, and regulators have signaled that the ownership change does not lessen their resolve. According to Bloomberg, while some complaints reference the company’s former ties to China, most of the legal claims focus on alleged harms caused by the app’s design and its impact on young users’ mental health.
TikTok has said the revamped US entity is committed to strengthening trust with regulators and users alike. In announcing the deal on Jan. 22, the company said it would operate “a comprehensive data privacy and cybersecurity program that is audited and certified by third party cybersecurity experts.”
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“From a compliance perspective, it seems like they’re doing okay. The transparency piece is yet to be seen,” said John Howard, a senior attorney at Clark Hill.
The company’s challenges are unfolding against a broader push to rein in how tech platforms engage with children. Per Bloomberg, firms including Meta Platforms, Snap, and Roblox are also facing lawsuits over youth safety. States such as New York and Texas have either enacted or are weighing laws that would require age verification for online services, creating a patchwork of rules that complicates nationwide compliance.
TikTok has adopted stricter age verification measures in some overseas markets, including the UK and Australia, but has not rolled out those tools globally. In the US, differing state standards and unclear technical requirements make implementation more complex. Failure to meet those expectations could expose TikTok to additional legal risk, especially as regulators assess whether changes to its recommendation algorithm under US control address the concerns raised in existing cases.
“It’s obvious that TikTok is already aware that they’re going to have to, not necessarily switch gears away from national security concerns, but make sure minors’ data is protected,” said David Oberly, a partner at Baker Donelson.
Privacy scrutiny is also intensifying as TikTok prepares to expand its collection of precise geolocation data in the US. According to Bloomberg, that move triggers additional compliance obligations, particularly in states like California, where companies must allow users to opt out of precise location tracking and are restricted from collecting data near sensitive locations such as medical facilities.
California regulators have already investigated location data practices across the industry, and other states are considering protections related to immigration and citizenship information. TikTok recently updated its privacy policy to confirm that it collects data tied to citizenship status, adding another layer of sensitivity to how user information is handled.
Even without new, targeted legislation, companies that gather detailed location data remain exposed under existing consumer protection laws, Oberly noted, pointing to past Federal Trade Commission actions over allegedly unfair or deceptive data practices.
“Certainly collecting location data is an issue platforms are struggling with, but it’s not unique to TikTok and as long as they’re following the rules they should be able to do it,” said Boris Segalis, a partner at Morrison Foerster.
“TikTok woke up and got the same issues as every other US company.”
Source: Bloomberg
