14 Attorneys General Sue TikTok As Its Future In The U.S. Is On The Line
by Alexandra S. Levine · ForbesBipartisan attorneys general from more than a dozen states and Washington are suing TikTok in separate but coordinated complaints alleging TikTok is a deliberately addictive platform that is psychologically harming and financially exploiting kids.
The suits were filed by attorneys general in New York, California, New Jersey, Oregon, Mississippi, Kentucky, Illinois, North Carolina, South Carolina, Vermont, Massachusetts, Louisiana, Washington state and Washington D.C.
At least one of those lawsuits, from D.C. Attorney General Brian Schwalb, takes aim at problematic ways that money changes hands on TikTok, alleging the app is running an “unlicensed virtual currency system” that has made its popular livestream feature the equivalent of “a virtual strip club” for teens. The complaint, filed in D.C. Superior Court, cites and quotes the Forbes investigation “How TikTok Live Became ‘A Strip Club Filled With 15-Year-Olds,’” along with internal TikTok materials that support it. (The state of Utah sued TikTok on similar grounds in June.) The district accuses the company of violating consumer protection and money transmission laws by making false or misleading statements about how safe the platform is for young users, and it’s demanding a jury trial.
“TikTok’s platform, designed to be dangerously addictive, inflicts immense damage on an entire generation of young people,” Schwalb said in a statement. “In addition to prioritizing its profits over the health of children, TikTok’s unregulated and illegal virtual economy allows the darkest, most depraved corners of society to prey upon vulnerable victims.”
TikTok spokesperson Alex Haurek said in a statement: “We strongly disagree with these claims, many of which we believe to be inaccurate and misleading. We're proud of and remain deeply committed to the work we've done to protect teens and we will continue to update and improve our product. We provide robust safeguards, proactively remove suspected underage users, and have voluntarily launched safety features such as default screentime limits, family pairing, and privacy by default for minors under 16. We've endeavored to work with the Attorneys General for over two years, and it is incredibly disappointing they have taken this step rather than work with us on constructive solutions to industrywide challenges.”
TikTok’s future in the United States remains in limbo after President Joe Biden signed a law earlier this year that will ban the app nationwide come January over national security concerns—unless its China-based parent, ByteDance, sells TikTok to an American owner. TikTok and ByteDance subsequently filed a lawsuit challenging that law, as did a cohort of TikTok creators, calling it unconstitutional and a move to simply shutter a platform used by 170 million Americans. Just last month, the U.S. Court of Appeals in Washington heard their arguments against a looming shutdown (both sides asked the court to issue a ruling by December 6, so the losing party can appeal). But against the backdrop of this high stakes legal fight in the Capitol, which could see a foreign-owned social media app barred from this country for the first time ever, states have steadily been building their own arsenal against TikTok. A bipartisan group of attorneys general launched an investigation into TikTok’s alleged harms to underage users back in 2022. And after many months of individual states jockeying for internal TikTok documents in their respective probes, the new lawsuits filed today reveal some of the early results of that work.
Got a tip about TikTok, ByteDance, or children’s safety issues on social media? Reach out securely to Alexandra S. Levine on Signal/WhatsApp at (310) 526–1242.
Child safety and mental health concerns related to social media are now well-known and well-documented, so much so that schools across the country have started banning smartphones from their classrooms and campuses. More overlooked are the ways that minors are earning and spending money on these platforms, and the potential dangers that can create.
TikTokers regularly earn and spend money through TikTok Live: Those watching the broadcasts can use real money to purchase TikTok coins, which can then be used to buy and send digital TikTok gifts directly to those hosting livestreams, who can redeem them for actual cash.
TikTok policies state that users must be 18 or older to go live, and that those under 16 are blocked from hosting livestreams altogether. But like every major social media platform, TikTok has struggled to verify the ages of its users, making it easy for them to gain access and freely use Live and its monetization features. Forbes reporting has brought to light the ways they have been misused to lure young girls into performing suggestive, and potentially illegal, acts for adult men on TikTok Live—one of the key issues highlighted in the D.C. attorney general’s complaint.
“The company knows that Live is unsafe, exploiting children financially and sexually,” the filing says. “Operating in part like a virtual strip club, Live provides young streamers with a performance stage, and allows other users to entice streamers into sexual acts in exchange for virtual money.”
In one TikTok Live detailed in the Forbes investigation, a 14-year-old in a bralette fielded requests from strangers on a 2,000-person broadcast, some offering “$35 for a flash,” asking to see her feet and telling her they’d send money to her Cash App. “You’re paying my bills,” the young girl told viewers.
In another, a teen slowly cut off her shirt with a pair of scissors as an audience of 3,000 egged her on. “IF U DO THE BLACK PART IM GONNA SEND TIKTOK LIVE 35.000 TIKTOK COINS (400$),” one commenter wrote, urging her to snip her bra. On other TikTok streams, often filmed from girls’ bedrooms and bathrooms, they were offered financial rewards if they’d kiss each other or spread their legs for the camera.
The D.C. filing describes TikTok’s “virtual economy” as “similar to a casino that facilitates the exchange of money for poker chips.” It says that the fact that TikTok gifts—which include hearts, ice cream cones and lollipops—look like “plush toys” and “cute, colorful animated emojis reminiscent of cartoons and Disney characters,” they distract children and parents from how much money is being exchanged and the reality of what may be going on (a tactic it calls “currency confusion”).
“Despite TikTok’s representations, it has knowingly created a system on Live that allows youth who view live streams to be taken advantage of financially and youth who live stream themselves to be sexually exploited by adults on the platform,” the complaint says.
It also alleges that despite TikTok offering a mechanism for people to send money to each other and facilitating “billions of dollars in transactions,” it is not licensed to do so, as is required by district and federal laws. It argues TikTok should be registered with the district’s Department of Insurance, Securities and Banking, and the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN), which work to ensure that payment platforms are adequately protecting users from illegal activity like sexual exploitation, drug trafficking and money laundering.
“By not registering as a money transmitter, TikTok not only masks criminal activity on the app from regulators, but also tricks its most vulnerable and unsuspecting users into using its platform for monetary transactions without sufficient safeguards,” the complaint says. “At no time has TikTok clearly told users—many of whom TikTok knows are children—that TikTok Live is littered with known criminals and that TikTok knows users are at heightened risk of fraud and other financial crimes.”