LONDON - TikTok could face a 27 million $29 million fine in the U.K. after privacy regulators found failings in the company's handling of children's data.
The Information Commissioner's Office issued TikTok a notice of intent informing the Chinese-owned video app of its provisional view that TikTok breached UK data protection law between May 2018 and July 2020. It comes after an investigation into the company began in 2019.
According to the ICO, TikTok may have processed the data of children under the age of 13 without parental consent, failed to present information to its users in a way that is easy to understand, and processed special category data without legal grounds, such as information on a person's race or ethnicity.
Information Commissioner John Edwards said that they wanted children to be able to learn and experience the digital world, but with proper data privacy protections.
Companies providing digital services have a duty to put those protections in place, but our provisional view is that TikTok fell short of meeting that requirement. The ICO said that its findings are provisional and that no conclusion should be drawn at this stage that there has been a breach of data protection law or that a financial penalty will be imposed. The ICO can issue a maximum fine of 4% of TikTok's annual global revenues under the EU GDPR, which is still enshrined in U.K. law.
TikTok has 30 days to come up with a response to the decision. If company officials make a convincing case defending its handling of children's data, the ICO may reduce the size of the penalty or refrain from imposing a fine altogether.
A TikTok spokesman said in a statement to CNBC that the company disagrees with the ICO's provisional fine and plans to make a formal response.
The TikTok spokesperson said that while we respect the role of the ICO in safeguarding privacy in the UK, we disagree with the preliminary views and intend to respond to the ICO in due course.
The ICO said it is looking into 50 different online platforms handling children's data and has six active investigations into companies that don't take seriously their responsibilities around child safety. TikTok is very popular with teens, who post everything from dancing videos to educational clips about the war in Ukraine. Over 1 billion people are using the platform, owned by Beijing-based internet giant ByteDance, every month.
The Netherlands Data Protection Authority fined TikTok for violating the privacy of young children and failing to offer its information in Dutch last year, and gave it a 750,000 euro $723,371 fine last year. TikTok is appealing the fine.
For years, TikTok had largely escaped the attention of regulators, with much of the focus reserved for American firms like Facebook and Google. The company - now a force to reckon with in the battle for eyeballs online - is being subject to heightened political scrutiny.
Western officials are concerned that the platform may be providing a backdoor to Beijing, allowing it to spy on non-Chinese users. Before his tumultuous tenure as the U.S. leader came to an end, former President Donald Trump tried to force TikTok to divest its U.S. division.