The Justice Department filed suit against TikTok on Friday, accusing the corporate of violating the Children's Online Privacy Protection Act and violating an agreement with one other federal agency.

The lawsuit, filed jointly with the Federal Trade Commission in a federal court in California, comes at a time when the United States and the well-known social media company in yet one more legal dispute This will determine whether – and the way – TikTok will proceed to be lively within the country.

The latest lawsuit centers on allegations that TikTok, a trend-setting platform popular with young users, and its China-based parent company ByteDance violated a federal law that requires child-oriented apps and web sites to acquire parental consent before collecting personal information from children under 13.

TikTok didn’t immediately reply to a request for comment.

“This action is necessary to prevent the defendants, who are repeat offenders and operate on a large scale, from collecting and using private information from young children without parental consent or control,” Brian M. Boynton, chief of the Justice Department's Civil Division, said in a press release.

The US decided to file the lawsuit after an investigation by the FTC The investigation examined whether the businesses complied with an earlier agreement with TikTok's predecessor, Musical.ly.

In 2019, the federal government sued Musical.ly, alleging that the corporate violated the Children's Online Privacy Protection Act (COPPA) by failing to tell parents in regards to the collection and use of private information from children under 13.

In the lawsuit, the Justice Department and the FTC allege that TikTok knowingly allowed children to create accounts and stored their personal information without notifying their parents. This practice also extends to accounts created in “Kids Mode,” a version of TikTok for kids under 13, the Justice Department said in a press release explaining the lawsuit.

The two agencies claim that the data collected included activity on the app and other identifiers used to construct user profiles. They also accuse TikTok of sharing the information with other corporations – equivalent to Meta's Facebook and an analytics company called AppsFlyer – to encourage “kid mode” users to be on the platform more often. TikTok called this practice “retargeting less active users.”

The criticism says TikTok also allowed children to create accounts without having to offer their age or obtain parental consent by utilizing login credentials from third-party services. These accounts were classified as “age unknown,” and the variety of accounts has now grown into the tens of millions, in accordance with authorities.

After parents discovered a few of their children's accounts and demanded they be deleted, federal officials said their demands had not been met. In a press release explaining the lawsuit, Justice said the alleged violations resulted in tens of millions of youngsters under the age of 13 using the regular TikTok app, which allows them to interact with adults and access adult content.

In March, an individual aware of the case told AP that the FTC's investigation was also looking into whether TikTok violated a part of the federal law prohibiting “unfair and deceptive” business practices by denying that individuals in China had access to U.S. user data.

These allegations weren’t a part of the lawsuit, which seeks civil penalties and injunctive relief.

Originally published: August 2, 2024 at 11:09 am

By Chris Isidore | CNN

New York – Elon Musk and the Tesla board are facing a shareholder lawsuit for selling $7.5 billion price of Tesla shares in late 2022. The sale got here ahead of a January 2023 earnings report that sent the stock price plummeting.

musk A complete of 41.5 million Tesla shares were sold between Nov. 4 and Dec. 12, company filings show, as he liquidated a few of his holdings to unlock money for his recently accomplished purchase of Twitter.

The sales got here not long after a quarterly earnings call on October 19, 2022, by which he told investors, “I can't stress this enough, we have excellent demand for the fourth quarter.”

But when Tesla reported In the fourth quarter, sales were significantly weaker than forecast, leading to a 12% drop in share price, the worst trading day for the stock in greater than two years.

“Musk profited from his misconduct and the exploitation of material and detrimental inside information,” says the lawsuit filed by shareholder Michael Perry. The lawsuit demands that Musk repay the corporate the take advantage of the stock sale and reimburse Perry for his legal fees and other costs in filing the lawsuit.

Musk likely knew on the time of the sale that the weaker sales report was coming, the lawsuit says. Tesla cut its prices in China by as much as 9% on October 24, 2022, starting a Series of price reductions This has led to a drop in prices for electric vehicles from Tesla and other automakers within the face of weaker-than-forecast sales.

And in April last yr, Musk boasted about Tesla's cutting-edge sales figures – in comparison with automakers that don’t sell their vehicles on to customers but to a network of independent dealers.

“I'm not sure there's any company in the world that has better real-time data than Tesla, except maybe SpaceX Starlink,” he told investors on the time, referring to considered one of his other corporations.

Tesla stock sales financed Twitter purchase

But from April to December 2022, Musk sold $22.9 billion price of Tesla stock in unscheduled sales to spice up his Purchase price $44 billion of Twitter this yr.

His sales in November and December 2022, in addition to the value cuts in China, helped depress the value of Tesla shares even before the January sales report. His sale on November 4, 2022, was at a median price of $208.58, in keeping with filings with the Securities and Exchange Commission. His last sales of this group, on December 14, were at a median price of $158.37 that day.

But the fourth-quarter sales report in January, which was released on a Sunday, sent Shares fell from $123.18 to $108.10 on the close of trading last Friday.

However, Tesla shares soon recovered and greater than doubled over the course of 2023, closing at $248.48. But shares have struggled this yr, losing 29% of their value by Monday's close.

The lawsuit was filed Thursday in Delaware Chancery Court and first reported by BloombergTesla, which doesn’t have a public relations department, didn’t reply to a request for comment.

The lawsuit comes at a time when Tesla Obtaining shareholder approval to return the stock options to Musk that he withdrawn in a court decision in January in Delaware. Two influential consulting firms have called on shareholders to To vote against his controversial billion-dollar salary package and raised concerns concerning the CEO's quite a few side projects.

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