TikTok’s $16 million fine for putting kids at risk comes at a pretty terrible time

TikTok has a minimum age limit of 13, which is in line with U.K. Data protection law, but the privacy watchdog said it nonetheless had as many as 1.4 million British kids below that age on its platform in 2020. Because it failed to get parental consent for processing their data, that means it did so illegally.

“There are laws in place to make sure our children are as safe in the digital world as they are in the physical world. TikTok did not abide by those laws,” said Information Commissioner John Edwards. “As a consequence, an estimated 1 million under 13s were inappropriately granted access to the platform, with TikTok collecting and using their personal data. That means that their data may have been used to track them and profile them, potentially delivering harmful, inappropriate content at their very next scroll.”

This is the third-biggest fine ever issued by the British privacy watchdog—British Airways had to pay £20 million and Marriott Hotels £18.4 million in 2020 and 2018 respectively, both for major security breaches—and Edwards was clear that the amount “reflects the serious impact [TikTok’s] failures may have had.”

TikTok is adamant that the Information Commissioner’s Office got this one wrong, saying it invests “heavily to help keep under 13s off the platform”—my emphasis to highlight TikTok’s implicit admission that it can’t fully meet that legal obligation. However, we can expect more of the same in the not-too-distant future. The Irish privacy regulator decided last year that TikTok deserved a fine for its handling of underage users’ data, and will make the penalty official once it’s finished consulting with its EU peers on the amount. 

France already fined TikTok €5 million earlier this year over an unrelated issue about cookie consent, but there’s a difference between such bog-standard privacy violations and those involving millions of children. Kids’ data is an emotive subject, and all this couldn’t be coming at a worse time for TikTok. 

TikTok is already on graphene-thin ice across Western countries, which is why CEO Shou Zi Chew has been racing around trying to convince the U.S. Congress and the European Commission that his company means well and is listening to everyone’s concerns about everything from privacy to online addiction to national security. 

So far, he’s not been successful. Australia just became the last member of the “Five Eyes” intelligence-sharing alliance (the other four are the U.S., the U.K., Canada, and New Zealand) to ban TikTok from official devices. The EU’s Brussels institutions have a similar ban in place. And a couple of weeks ago, a cross-party group of British lawmakers asked the information commissioner to investigate whether TikTok’s handling of data was legal—particularly given the potential for employees in China to access British users’ data.

It may be the case that no one has proved Beijing can plug into TikTok’s data troves, but the suspicion won’t go away, and with the temperature this high, it really doesn’t help TikTok’s case to be nailed over the illegal mishandling of children’s information.

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David Meyer

Data Sheet’s daily news section was written and curated by Andrea Guzman. 

NEWSWORTHY

Cuts at Apple. Apple is laying off employees in its corporate retail business, with job cuts targeting staffers involved in the construction and maintenance of the company’s stores, Insider reports. Employees were told last week during a videoconference, where management called it an org change. It’s not clear how many employees will be laid off, though a source told Insider that staffers in the U.S., Europe, and Asia-Pacific regions would be affected. Apple had avoided layoffs seen at other tech giants like Amazon and Meta by taking measures like hiring freezes. Now, affected employees have until Friday to apply for new roles within Apple.

Venture capital’s Saudi money. VCs don’t like to talk about the cash Saudi Arabia contributes to their funds. But as The Information reported this week, the Saudis have let the cat out of the bag. Sanabil Investments, the venture arm of Saudi Arabia’s Public Investment Fund, published the names of nearly 40 venture and growth funds its money is in, including Andreessen Horowitz, 500 Global, and General Atlantic. Many U.S. Firms distanced themselves from Saudi Arabia following the assassination of Washington Post columnist Jamal Khashoggi in 2018, but the disclosures suggest that U.S. Venture capital is open to Saudi money again.

Google will pay travelers who find cheaper fares. Alphabet-owned Google is introducing a flight price guarantee and other new services to help people find deals for traveling. The flight price guarantee will add a badge to flights that Google is confident won’t get any cheaper before the plane takes off with the difference returned to customers over Google Pay if a flight reaches a lower price. To start, it will only be available for U.S. Domestic flights booked by U.S. Residents. The guarantee may be voided if carriers update prices before the search engine’s algorithm has time to catch up.

SIGNIFICANT FIGURES

$2.3 million

—The estimated cost of training BLOOM, a large language model. The AI Index research team at Stanford University validated popular claims that large language and multimodal models are increasingly costing millions of dollars to train by analyzing hardware speed, training compute, and hardware utilization efficiency.

IN CASE YOU MISSED IT

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Elon Musk’s SpaceX has one less competitor as fellow billionaire Richard Branson’s Virgin Orbit files for bankruptcy, by Christiaan Hetzner

Former Google CEO Eric Schmidt says the tech sector faces a ‘reckoning’: ‘What happens when people fall in love with their A.I. Tutor?’By Prarthana Prakash

Elon Musk’s Twitter changes logo to Doge, pushing the memecoin up 20%, by Leo Schwartz

BEFORE YOU GO

Tesla on tap for your next happy hour. Tesla is now selling GigaBiers to build momentum for the Cybertruck. The 5% ABV pilsner will ship across Europe, with three limited-time bottles costing €89 ($97). The beer is brewed in Berlin and has notes of citrus, bergamot, and sweet fruit. This comes years after Tesla sold tequila for $420.