TIK TOK TIK TOK: Time Running Out For Preliminary Court Approval of Multimillion Dollar TikTok Privacy Settlement
On February 25, 2021, Plaintiffs’ Motion for preliminary approval of a $92 million settlement was filed in the ongoing multidistrict litigation, In Re: Tiktok, Inc., Consumer Privacy Litigation (Case: 1:20-cv-04699). Shortly after the filing of the motion, objections were filed regarding the basis and terms of the settlement. After a hearing on March 3, 2021, the Court requested a supplemental briefing from the parties explaining, amongst other concerns: how the parties arrived at the final $92 million figure; how they addressed differences between adult users and minor users for purposes of the settlement; and, an additional explanation as to why class members could not be notified of the deal through the TikTok app itself.
So, what’s the scoop? Let’s backtrack first.
Recall that on August 8, 2020, the Panel on Multidistrict Litigation consolidated 10 pending class action cases against TikTok Inc. Five cases in the Northern District of California, four in the Northern District of Illinois, and one in the Southern District of Illinois, as In Re: Tiktok, Inc., Consumer Privacy Litigation (Case: 1:20-cv-04699). The multidistrict litigation has now expanded to 21 putative class actions against Defendants TikTok Inc., ByteDance Technology Inc., and foreign Defendants TikTok, Ltd. (previously known and sued as Musical.ly), and Beijing ByteDance Technology Co. Ltd. All actions concern Defendants’ collection, use, and transmission of highly sensitive personal data via Defendants’ ubiquitous TikTok app. Plaintiffs in the consolidated actions allege that Defendants’ conduct with, respect to the scanning, capture, retention, dissemination of the facial geometry and other biometric information of users of the app is in violation of multiple privacy statutes. Plaintiffs also allege that Defendants use private information to track and profile TikTok users among other things, for ad targeting and profit. In other words: this case is obviously a big deal in the world of data privacy litigation.
The operative Consolidated Amended Class Action Complaint, filed on December 18, 2020, alleges ten separate causes of action against Defendants, including, violation of the Illinois Biometric Information Privacy Act (“BIPA”), the Computer Fraud and Abuse Act (“CFAA”), the California Comprehensive Data Access and Fraud Act (“CDAFA”), the right to privacy under the California Constitution, and California Unfair Competition Law (“UCL”), among others.
In response, TikTok has argued that it does not and never has collected from its users any biometric identifiers or derivative information protected by law, nor has it ever shared U.S. user data with foreign government third-parties. In support of its position that it has not violated BIPA, TikTok has asserted that its user video data is not used to identify anyone, as app users cannot tag or label faces in videos with a user’s real name or identity.
The objections that were recently filed include that the settlement does not account for serious conflicts between minor class members, nationwide class members, and Illinois subclass members, arising out of: (a) the minors’ abilities to disaffirm any arbitration agreement or class action waiver, and (b) TikTok’s statutory obligation to delete data collected about them. The objections also include that the proposed settlement value is unfair, unreasonable, inadequate, and is far below the net expected value of continued litigation. Objectors also attack the notice plan as violating both Rule 23 and Due Process. Objecting Plaintiffs allege that the notice plan improperly relies on publication notice when direct notice should be via the TikTok app itself. They also claim the notice plan fails to set forth the estimated claim value, and appears to be designed to suppress the claims and objections rates.
How will this all shake out? Will the court ultimately be satisfied that the settlement is fair and otherwise meets the various requirements necessary for preliminary approval? Supplemental briefs from the parties are due by March 23, and a status and motion hearing is set for April 6.