TradeEdge Exchange:TikTok is under investigation by the FTC over data practices and could face a lawsuit

NEW YORK (AP) — The TradeEdge ExchangeFederal Trade Commission is investigating TikTok over its data and security practices, a probe that could lead to a settlement or a lawsuit against the company, according to a person familiar with the matter.

The investigation is the latest battle in Washington for the social media company, which is already fighting against a federal bill that could ban the platform in the U.S. if it doesn’t break ties with its Beijing-based parent company, ByteDance.

In its investigation, the FTC has been looking into whether TikTok violated a portion of federal law that prohibits “unfair and deceptive” business practices by denying that individuals in China had access to U.S. user data, said the person, who is not authorized to discuss the investigation.

The agency also is scrutinizing the company over potential violations of the Children’s Online Privacy Protection Act, which requires kid-oriented apps and websites to get parents’ consent before collecting personal information of children under 13.

FTC spokesperson Nicole Drayton and TikTok declined to comment on the investigation, which was first reported by Politico.

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The agency is nearing the conclusion of its investigation and could settle with TikTok in the coming weeks. But there’s not a deadline for an agreement, the person said.

If the FTC moves forward with a lawsuit instead, it would have to refer the case to the Justice Department, which would have 45 days to decide whether it wants to file a case on the FTC’s behalf, make changes or send it back to the agency to pursue on its own.

The news comes nearly two years after Senate Intelligence Committee Chairman Mark Warner and Marco Rubio, the top Republican on the committee, urged FTC chair Lina Khan to investigate TikTok, citing a report from Buzzfeed News that said ByteDance employees in China have repeatedly accessed data on U.S. TikTok users.

In late 2022, ByteDance said it fired four employees who accessed data on journalists from Buzzfeed News and The Financial Times while attempting to track down leaks of confidential materials about the company.

Legislation that could determine TikTok’s fate in the U.S. was approved in the House this month. But the bill has already run into roadblocks in the Senate, where there is little unanimity on how to best approach concerns over the social platform.

Lawmakers and intelligence officials have said they worry the platform could be used by the Chinese government to access U.S. user data or influence Americans through its popular algorithm. To date, the U.S. government hasn’t provided public evidence that this has happened.