Appeals court revives Indiana lawsuit against TikTok, raising child safety and privacy claims

INDIANAPOLIS (AP) – The Indiana Court of Appeals has reinstated a lawsuit filed by the state that accuses TikTok of deceiving users about the level of inappropriate children’s content on the video-sharing platform and the security of its consumers’ personal information.

In a 3-0 ruling issued Monday, a three-judge panel of the state Court of Appeals overturned two November 2023 decisions by an Allen County judge that dismissed two lawsuits the state filed in December 2022 against TikTok.

These lawsuits, which have been consolidated, allege that the app contains “lewd and inappropriate content,” even though the company claims it is safe for children 13 and under. The proceedings also allege that the application deceives consumers by making them believe that their sensitive and personal data is safe.

In a November ruling, Allen Superior Court Judge Jennifer L. DeGroote found that her court had no personal jurisdiction over the case and affirmed the court’s earlier ruling that found that downloading a free app did not count as a consumer transaction under the act Indiana Fraudulent Consumer Sales Act.

But in Monday’s ruling, Judge Paul Mathias wrote on behalf of the appeals court that TikTok’s millions of Indiana users and the $46 million in Indiana revenue the company reported in 2021 provide sufficient contact between the company and the state to establish Indiana jurisdiction courts in the TikTok case – reports “The Times of Northwest Indiana”.

Mathias also wrote that TikTok’s business model of providing access to a library of video content in exchange for the personal information of Indiana users counts as a “consumer transaction” under the law, even if it does not involve any payment.

“The plain and ordinary definition of the word ‘sale’, which is not otherwise defined in the DCSA, includes any consideration intended to effect a transfer of property and not merely an exchange for money,” Mathias wrote.

“There is no doubt that TikTok trades access to its app’s content library for end-users’ personal data. This is the contract between TikTok and its end users. In common and colloquial use of the word, this means “selling” access to the TikTok content library for the end-user’s personal information. “The TikTok business model is therefore a consumer transaction under the DCSA.”

A spokesman for the Indiana Attorney General’s office said in a statement Tuesday that the appeals court “took a common-sense approach and agreed with our office’s argument that there is simply no substantial doubt that Indiana has established special personal jurisdiction over TikTok.”

“Earning over $46 million from Hoosier consumers in 2021, TikTok does business in this state and is therefore subject to this lawsuit,” the statement adds.

The Associated Press sent a message to TikTok’s general counsel Tuesday afternoon seeking comment on the appeals court’s ruling.

TikTok is owned by ByteDance, a Chinese company that moved its headquarters to Singapore in 2020. Over the past year, the app has been the target of state and federal lawmakers who say the Chinese government could access data about the app’s users.

Indiana Attorney General Todd Rokita has repeatedly personally urged Hoosiers to “patriotically take down” the TikTok app because of its alleged ties to the Chinese Communist Party.