TikTok to pay $100m and limit daily child usage in Alabama settlement

TikTok and its parent company ByteDance have agreed to pay at least $100m to the US state of Alabama and implement strict platform restrictions for young users, averting a trial that was scheduled to begin on Monday. The agreement was finalized on Friday, marking the platform's first-ever state-level settlement amid legal scrutiny across the United States over youth mental health and online features.

According to the Alabama Attorney General's office, the settlement ends a lawsuit originally filed by Alabama Attorney General Steve Marshall. The state alleged that TikTok was intentionally designed with features compared to a sophisticated gambling machine, pushing young users toward content concerning violence and self-harm and causing youth emergency room visits to surge. Katherine Robertson, chief counsel in the Alabama Attorney General's office, stated that the agreement was reached following mediation and represented the state's final offer.

"This is very restrictive injunctive relief that's going to require them to change a lot of the policies that we had identified as the culprits in what we call the war on childhood,"

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Katherine Robertson, chief counsel in the Alabama Attorney General's office, via BBC

The financial terms require an initial payment of $100m to be delivered within 45 days. However, payouts could climb higher depending on broader developments. According to reporting, the total sum could reach up to $300m if conditions of the new settlement are not met. ByteDance was included as a party to the agreement because it retains a minority stake in TikTok's US joint venture, following a corporate restructuring earlier in the year where a new group of investors took control of US operations.

Operational changes mandated by the settlement mirror frameworks established by rival platforms. In August, Instagram-owner Meta agreed to a settlement with state attorneys general. Under the Alabama TikTok agreement, safety restrictions taking immediate effect include a two-hour daily usage cap, school-hour blocks, and overnight limits from midnight to 6 a.m., alongside mandatory pauses after 15 minutes of continuous use, and again at 60 and 90 minutes. Additional requirements such as age verification measures must be fully implemented within a year.

The settlement introduces enhanced parental controls, restrictions on adult discovery of minor accounts, mandatory notifications for suspicious adult-teen interactions, and a blanket ban on cosmetic procedure filters for young users. Teen accounts will automatically default to private settings, and users will be given the option to choose a non-personalized content feed.

TikTok has maintained that its platform was designed with teen safety as a priority and argued that Section 230 of the federal Communications Decency Act protects online intermediaries from liability over user-generated content.

A spokesperson for the TikTok USDS Joint Venture defended the platform's safety record in a statement: TikTok's priority has always been fostering a safe and positive space where people can be creative, discover what they love, and connect with their community. This builds on our commitment and core objective to continually enhance our robust safety tools to protect teens.

Despite this settlement, legal battles continue. Other states maintain active lawsuits against TikTok. Meanwhile, concurrent courtroom battles continue to unfold across the tech sector, highlighted by a New Mexico jury finding Meta liable in a separate consumer protection trial on the same day.

State officials will monitor compliance with the immediate time restrictions while the company works toward establishing the longer-term age verification systems required within the year.