On October 8, 2024, the District of Columbia and 13 other U.S. states filed lawsuits against TikTok, accusing the platform of exploiting young users through its addictive design and unregulated virtual currency. The lawsuit, spearheaded by DC Attorney General Brian Schwalb, claims TikTok preys on children with casino-like features, enabling them to buy virtual “Coins” used to send “Gifts” during livestreams. These gifts, converted to real money by streamers, are seen as highly exploitative, with TikTok taking up to 50% commission.
The lawsuits allege TikTok’s software is intentionally designed to foster addiction in minors, pushing them to spend excessive amounts of time and money on the app. The platform's virtual economy, which some compared to a "virtual strip club" for children, has drawn widespread criticism for lacking regulation and transparency.
Tik Tok is designed to promote excessive, compulsive, and addictive use in children
We’re holding them accountable in court to protect our children’s health, safety and future https://t.co/PHoC1l6zaK
— Rob Bonta (@RobBonta) October 8, 2024
Attorneys general argue that TikTok operates as an unlicensed money transmission service, violating consumer protection laws by failing to register with the U.S. Treasury or relevant state agencies.
The allegations further assert that TikTok misrepresents its safety measures and moderation capabilities. Despite claims of safeguards, including screen time limits for younger users, the platform is accused of doing little to mitigate the harmful effects of its features. California Attorney General Rob Bonta emphasized that TikTok’s addictive design is aimed at maximizing corporate profits at the expense of children’s well-being.
US States Sue TikTok over Alleged Harm to Minorshttps://t.co/krGHFID6fi pic.twitter.com/Ze1w3sgM4t
— Sada ElBalad English (@SeeNewsEGY) October 9, 2024
This legal action is part of a broader movement against social media companies. Lawmakers and regulators have increasingly targeted platforms like TikTok for their perceived role in contributing to the mental health crisis among teens.
Alongside concerns about data privacy, addiction, and harmful content, TikTok's use of virtual currency has become a focal point for regulators concerned with protecting minors from financial exploitation.
TikTok has yet to respond to these latest legal challenges but previously emphasized its efforts to provide safe experiences for its users, particularly for younger audiences. Nevertheless, the platform continues to face growing scrutiny over its business practices. With the potential for heavy fines and regulatory action, this lawsuit adds to the mounting pressure on the Chinese-owned company, which has already faced threats of bans in the U.S. due to national security concerns.
As the case unfolds, it raises significant questions about the role of social media in children’s lives and whether stronger regulations are needed to protect vulnerable users from harmful practices. If TikTok is found liable, the consequences could reshape the way social media companies are regulated, particularly in areas involving minors and online spending.
