The US Federal Trade Commission reports ByteDance's TikTok to the Justice Department

The US Federal Trade Commission (FTC) has referred a complaint against ByteDance’s TikTok to the Justice Department, initiating a potentially significant government investigation into the company’s data handling practices.

The FTC has been scrutinizing the social media giant for possible violations of federal laws designed to protect children online, as well as for potentially engaging in “unfair or deceptive” business practices prohibited by a separate statute.

“Our investigation found reason to believe that TikTok is violating or is about to violate the FTC Act and the Children’s Online Privacy Protection Act,” FTC Chair Lina Khan announced in a social media post on Tuesday.

Representatives from the FTC were unavailable for immediate comment.

In response, TikTok issued a statement on social media, expressing their disappointment with the FTC’s decision to pursue litigation rather than continuing cooperative efforts.

“We’re disappointed the agency is pursuing litigation instead of continuing to work with us on a reasonable solution,” the company stated. “We’re proud of and remain deeply committed to the work we’ve done to protect children and we will continue to update and improve our product.”

TikTok has been under intense scrutiny in the US for several years, largely due to concerns about the relationship between its parent company, ByteDance, and the Chinese government. In April, President Joe Biden signed legislation that would ban TikTok unless it is sold within a year, a law the company is currently challenging in court.

In May, House lawmakers requested that the FTC investigate whether TikTok had violated children’s online safety laws by sending pop-up notifications asking users for personal information and encouraging them to contact Congress about the TikTok ban.

This is not the first time TikTok has faced regulatory action. In 2019, the company paid $5.7 million to settle FTC allegations of illegally collecting personal information from children, the largest civil penalty ever obtained by the commission in a children’s privacy case.

The FTC has continued to investigate TikTok, as confirmed in their statement. “Although the commission does not typically make public the fact that it has referred a complaint, we have determined that doing so here is in the public interest,” the FTC stated.