TikTok Deal Worth a Cup of Coffee Rued as Too Puny

(Bloomberg) -- A proposal to settle privacy lawsuits with the video app TikTok might give users enough compensation to buy a cup of coffee -- and that’s just not good enough, a lawyer representing an objector to the accord told a judge.

Those supporting the $92 million settlement justify it by referring to deals reached more than a decade ago, the lawyer, Ryan Andrews, said at a hearing on Monday. Andrews is a partner at Edelson PC, which represented plaintiffs in a class-action biometric privacy suit that cost Facebook $650 million and saw 22% of class members, or almost 1.6 million Facebook users, file compensation claims.

“At even half the claims rate as the Facebook deal, most class members will get $6 which is barely enough to purchase a coffee at Starbucks,” Andrews said. “If they have a 5% claims rate, which is highly probable here, many class members will maybe get enough to buy lunch.”

In-fighting among attorneys and objections from TikTok users have delayed the approval process of the proposed deal that TikTok agreed to last year.

TikTok told the judge in a filing that it was forced to bend under political pressure, as the Trump administration threatened to shut down the app in the U.S., to reach the agreement, which one of the objectors to the deal called “hastily drawn up.”

Read More: TikTok U.S. Privacy Judge Frowns on Fractured Deal Talks

TikTok was accused of illegally recording facial scans of users and disclosing private data to third parties. The video app faced potential damages under an Illinois biometric privacy law of as much as $5,000 for each time an online facial scan was collected without a consumer’s consent.

Users in Illinois would be entitled to greater compensation because they brought their claims under the state privacy law.

Katrina Carroll, a lawyer supporting the deal, told the judge that a list of comparable deals submitted shows “most of settlements in this area do not approach the value that we’ve gotten for the class, and it’s not even close.”

If almost all U.S. TikTok users covered by the class-action lawsuit filed a claim -- about 90 million -- a user in Illinois would get $6 and users in other states would get 96 cents each, according to court filings. But lawyers backing the deal say they expect 1.5% of users will file a claim, meaning those based in Illinois would get $383.33 each, while those in other states would get $63.89.

U.S. District Judge John Lee said he would weigh the arguments and issue a ruling later.

Lee also heard objections from another attorney representing 957 users who wish to arbitrate with TikTok instead of filing a claim in the class-action suit. The users say the deal’s requirement of mailing in a form to opt out is “burdensome.” They are represented by Labaton Sucharow, a firm that was Edelson’s co-counsel in the Facebook biometric case.

Labaton Sucharow hasn’t provided “the court a single iota of information about those 957 people and any evidence that they are actually wanting to opt out,” Carroll said.

The case is TikTok Consumer Privacy Litigation, 20-cv-04699, U.S. District Court, Northern District of Illinois (Chicago).

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