The Justice Department says it will appeal a federal judge’s refusal to approve its proposed settlement with TikTok, a deal that would have wiped out the Federal Trade Commission’s 2019 children’s privacy order against the company. Instead of reworking the proposal as the judge invited, the government told the court it “declines to renew its consent motion and rests on the current record before this Court, because there is nothing further for this Court to consider.”
The decision sets up an unusual appeal: the federal government asking a higher court to let it lift child privacy obligations it once fought to impose, against a trial judge who held that those obligations still serve the public interest.
How the case got here
The story starts with Musical.ly, the lip-sync app that became TikTok. In 2019, the FTC and the Justice Department settled charges that Musical.ly had violated the Children’s Online Privacy Protection Act (COPPA) by collecting personal information from children under 13 without parental consent. The resulting consent order carried a $5.7 million civil penalty and a long list of continuing obligations.
In 2024, the Justice Department sued TikTok and its then-owner ByteDance, alleging that the company had broken both COPPA and the 2019 order. Among other things, the complaint alleged that children 12 and under could get around a “Kids Mode” setting that was supposed to limit data collection. When the government later moved to settle, it described those claims as “allegations only,” and no court has decided liability.
Earlier this year, ByteDance sold TikTok’s U.S. operations to a joint venture of investors that includes Oracle. The proposed settlement leaned on that change. According to MediaPost’s reporting on the court filings, the Justice Department argued that the 2019 conditions were “no longer necessary to serve the public interest,” because the conduct grew out of Musical.ly’s practices rather than “the TikTok platform as it exists and operates today.”
Why the judge said no
In September, U.S. District Judge George Wu of the Central District of California refused to approve the agreement. He found that the government had not given him enough to justify vacating the 2019 order, and he rejected the idea that new ownership changed the legal picture. “There is nothing inherent in the ownership change that renders the aims of the Consent Order accomplished,” he wrote, adding that while there had been significant legal developments around TikTok, “nothing has changed regarding defendants’ legal obligations under COPPA.”
Judge Wu left the door open by allowing the government to amend and refile its request. The Justice Department’s latest filing closed that door. It will instead ask the Ninth Circuit to review the ruling.
What is at stake
Consent orders are among the FTC’s most important tools. They usually last for years and impose specific duties that go beyond the bare text of the law, such as record-keeping, compliance reports and deletion requirements. If a change of ownership were enough to dissolve one, every company under an FTC order would have a new reason to restructure.
For businesses watching from outside, three points stand out:
- Orders follow the business, not just the owner. Judge Wu’s reasoning suggests that buyers of a company under an FTC order should assume they inherit it.
- COPPA duties do not change with corporate structure. Whatever happens to the 2019 order, TikTok, like every operator of a child-directed service or one with actual knowledge of child users, must still comply with COPPA itself.
- Courts are not rubber stamps. Even an agreed settlement between the government and a company needs a judge’s approval, and judges can demand evidence.
The COPPA landscape around it
The appeal plays out against a tighter COPPA rule. The FTC’s amendments to the COPPA Rule added stronger requirements on separate parental consent for disclosures to third parties, data retention and security programs. The agency has also signaled that it will not penalize companies for using age verification tools, removing one excuse for not knowing who is on a service.
TikTok also faces private litigation. A federal court has already ruled that TikTok will have to face a suit over children’s data, and those claims are separate from the government case. Past COPPA settlements, such as the one that left Disney owing $10 million for mislabeling kids’ videos on YouTube, show that the FTC treats audience labeling and default settings as central to compliance.
Five COPPA checks worth running now
- Confirm your audience status. Decide, in writing, whether your service is directed to children, mixed-audience or general, and keep the evidence for that conclusion.
- Test your “kids mode” or under-13 path. If a child can bypass it by changing a birthdate or switching modes, that gap is exactly what the 2024 complaint alleged.
- Review third-party code. SDKs, ad tags and analytics in child-directed areas can collect persistent identifiers that COPPA treats as personal information.
- Check parental consent records. Make sure consent is verifiable and that disclosures to third parties have their own consent where the amended rule requires it.
- Inventory existing orders in deals. In any acquisition, list every regulator order that binds the target and assign an owner for each obligation.
How Captain Compliance supports COPPA programs
Captain Compliance’s consent management platform covers cookie and tracking consent across web, mobile and connected TV, and our cookie scanner finds the cookies, pixels and trackers actually running on a site. For COPPA work, that combination helps a team see which third-party code loads in child-directed areas and whether it fires before consent. It does not replace verifiable parental consent processes or legal judgment about audience status, and we do not promise COPPA compliance. Children’s data raises new questions as AI enters the picture too, a gap we explored in AI and children’s privacy.
Frequently asked questions
Is the 2019 TikTok consent order still in effect?
Yes. Judge Wu refused to vacate it, so it remains in force unless an appeals court rules otherwise.
Did TikTok admit violating COPPA?
No. The government described its 2024 claims as allegations only when it moved to settle, and no court has decided liability.
Why does the change in ownership matter?
The government argued that the 2019 conditions targeted Musical.ly’s old practices, not the platform under new owners. The judge found that ownership alone does not show the order’s goals were met.
Which court will hear the appeal?
Appeals from the Central District of California go to the U.S. Court of Appeals for the Ninth Circuit.
Does this affect companies other than TikTok?
Indirectly. The ruling suggests courts will look closely at requests to lift privacy orders after a sale, which matters for any company under an FTC order or buying one that is.
A strange alignment
The appeal puts the government in the position usually taken by defendants: arguing that an order it obtained should no longer bind a company. If the Ninth Circuit agrees, ownership changes could become a path out of privacy orders. If it sides with Judge Wu, the message to every buyer of a regulated platform will be simple: you bought the obligations too.
