The recent 92 million dollar class action settlement agreed to by TikTok’s parent company, ByteDance, is the latest poster child for abusive class action settlement practices.
The allegations are serious. The class action was filed mostly on behalf of minors, some as young as eight years old. Plaintiffs allege that TikTok failed to notify users that it utilizes facial scans, captures and stores biometric data, keeps a copy of videos that users never post, and collects private information in order to sell ads. Plaintiffs further allege that TikTok sent all this data to its servers in China. TikTok’s alleged data harvesting is broad, including users’ “identities, unique identifying information, biometric data and information, images, video and digital recordings, audio recordings, clipboard data, geolocation, names, email addresses, passcodes, social media accounts, messaging services, telephone numbers, and other private, nonpublic, or confidential data and information.” (TikTok previously agreed to pay $5.7 million to the Federal Trade Commission for similar allegations that it illegally collected children’s personal data.)
The class consists of 89 million TikTok users. According to the Settlement, class attorneys will “not seek an attorney fee award of more than 33% of the settlement fund.” How generous. In other words, class counsel is limiting itself to a mere $30,000,000.
Meanwhile, “most users could expect to reap about $0.96” from the settlement. Because of a more protective state law, “Illinois users could get as much as $5.75.” In addition, TikTok promises to initiate a “companywide data privacy training initiative” on data privacy laws. And instead of promising to stop its collection, storage, and use of personal data, TikTok says only that it will update its privacy policies to ensure disclosure of its practices and compliance “with all applicable laws.”
No wonder U.S. District Judge John Z. Lee has a problem with the proposed settlement. Judge Lee ordered the parties to explain the settlement proposal in more detail, showing how they arrived at the settlement amount and why the settlement didn’t differentiate between minors and other users. In defense of the settlement proposal, TikTok’s counsel estimated that only 1-2% of TikTok’s users would seek recovery (which meant that users might get more than $1 in damages). In response, Judge Lee asked why the Settlement did not require TikTok to itself notify users of the settlement through its app. Good question. Further, TikTok doesn’t promise to stop its data collection—only to let users know about it. It’s hard to see how the forthcoming legal disclosures will do much good for the eight year old plaintiffs.
As the TikTok Settlement proposal shows, class actions are a good gig for plaintiffs’ attorneys, but not necessarily for plaintiffs or for the concept of justice. One wonders whether $1 in damages is enough to compensate plaintiffs for stolen personal data, especially when TikTok does not promise to stop collecting much of it.