The US Federal Trade Commission (FTC) referred a complaint against ByteDance Inc’s TikTok to the Justice Department (DOJ), setting up a potentially consequential government probe into the company’s handling of user data. 

The FTC was looking into the social media company over potential violations of federal law that protects children on the internet, as well as whether it violated a separate law that bars companies from using “unfair or deceptive” business practices.

“Our investigation found reason to believe that TikTok is violating or about to violate the FTC Act and the Children’s Online Privacy Protection Act,” FTC chair Lina Khan said in a social media post on Tuesday.

FTC representatives did not immediately respond to requests for comment.

TikTok issued a statement on social media in response, saying they have been working with the FTC for more than a year to address concerns. “We are disappointed the agency is pursuing litigation instead of continuing to work with us on a reasonable solution,” the company said. “We are proud of and remain deeply committed to the work we have done to protect children, and we will continue to update and improve our product.”

TikTok has faced enormous scrutiny in the US for years over the ties between its parent company, ByteDance, and the Chinese government. US President Joe Biden in April signed a law that would ban TikTok unless it is sold within a year. The company is challenging the law in the courts.

House lawmakers in a May letter asked the FTC to probe whether TikTok had violated child’s online safety laws when it sent pop-up notifications requesting users’ personal information and encouraged them to contact Congress about the TikTok ban. 

TikTok in 2019 paid US$5.7 million  to settle FTC allegations that it had illegally collected personal information from children, amounting to the largest civil penalty ever obtained by the commission in a children’s privacy case. 

The agency continued to investigate the company, according to the FTC’s statement.

“Although the commission does not typically make public the fact that it has referred a complaint, we have determined that doing so here is in the public interest,” the FTC said in the statement. 

  - Bloomberg