TikTok and its parent company ByteDance have agreed to pay at least $100 million to settle a lawsuit brought by the state of Alabama alleging the video platform harmed young users.
Under the agreement, Alabama will receive the payment within 45 days. The total could rise to as much as $300 million if certain conditions are met, according to the terms disclosed Friday.
The suit, filed by Alabama Attorney General Steve Marshall's office, accused TikTok of designing its app to addict children, misleading consumers about its safety, and failing in its treatment of younger users. The settlement marks the first such deal between the company and a U.S. state over claims concerning harm to young users.
The agreement comes just before Alabama's case was set to become the first of the state lawsuits to reach trial. At least 27 other states and Washington, D.C., have brought similar suits against the platform.
TikTok has disputed the allegations in Alabama's case, arguing that teen safety is a priority in its platform design and citing Section 230 of the Communications Decency Act, which provides online platforms protections from liability involving user-generated content.
In a separate development, TikTok and ByteDance reached a settlement with the U.S. Justice Department regarding children's privacy allegations. That deal requires an immediate $300 million payment, plus an additional $100 million if a court terminates a 2019 Federal Trade Commission consent decree involving TikTok's predecessor, Musical.ly.
A federal judge recently signaled potential rejection of the request to terminate the FTC decree, which maintains reporting and record-keeping obligations through 2029.
