TikTok knew its livestreams exploit children, Utah lawsuit claims

 New information released as part of Utah's ongoing lawsuit alleges TikTok LIVE targets minors and is used to launder money. (Thicha Satapitanon/Getty Images)

Hundreds of thousands of children have bypassed TikTok’s minimum age restrictions to use the social media platform’s LIVE feature, which incentivizes sexual content, sometimes viewed by predatory adults. And an internal TikTok investigation suggested the platform’s virtual currency was being used in “major money laundering criminal patterns.”

That’s according to previously redacted documents that were released Friday as part of Utah’s ongoing lawsuit against TikTok, claiming the social media company is violating the state’s deceptive acts or practices law and consumer sales practices act.

The lawsuit, filed in June 2024, accuses TikTok of using a monetization feature to incentivize minors to perform sexually explicit acts on its LIVE feature — TikTok then takes a “significant cut” from those virtual transactions, Utah alleges.

But 28 of the complaint’s 176 paragraphs were largely redacted, with TikTok classifying the content as confidential business records or trade secrets under Utah law. The company fought to keep the redactions but on Dec. 20, Utah’s 3rd District Court Judge Coral Sanchez ruled that most of the content should be released to the public. In his ruling, Sanchez wrote that just 10 paragraphs should remain redacted, mostly because they include the money content creators have netted on TikTok.

Detailed in the unredacted complaint is Project Meramec, an internal investigation launched by TikTok that found 112,000 children between 13 and 15 years old were able to use TikTok LIVE during January 2022 alone. Per TikTok’s guidelines, users must be at least 18 years old to access LIVE.

TikTok’s footprint in Utah

Also released Friday was data detailing how many Utahns are using TikTok. Consider this:

There are 3,171,209 registered TikTok accounts in Utah.There are 278,506 TikTok accounts associated with Utahns under 18 years old, although attorneys for the state claim the company “likely significantly undercounts the number of minors using the app.”There are 1,540,957 TikTok content creators in Utah, defined in court documents as “users who share and post content on the app.” Those Utah-based content creators have 919,171,787 cumulative followers on TikTok. Their profits are still redacted.

TikTok LIVE was introduced in 2019 and has since become “extraordinarily popular,” the complaint states. It includes a monetization feature where viewers can purchase virtual currency and gifts, which can then be exchanged for real money. According to attorneys for Utah, creators are promised more money by TikTok based on how popular their content becomes.

TikTok’s own study concluded that LIVE enabled the “‘exploitation of live hosts’ and that TikTok profited significantly from ‘transactional gifting’ involving nudity and sexual activity, all facilitated by TikTok’s virtual currency system,” according to the complaint.

And some of the underage users who bypassed the age verification for TikTok LIVE would receive messages from adult users, Utah claims in the lawsuit, “raising red flags to TikTok that these minors were likely being groomed by adults.” Project Meramec found that adults would sometimes pay users performing on TikTok LIVE “to strip, pose, and dance provocatively for ‘diamonds,’ which can be cashed out for real money,” according to the state.

But the company chose to look the other way, according to attorneys for Utah — transactional sexual content “hits most of (TikTok’s) business’ metrics of success,” the newly unredacted complaint states. The company received “significant revenue … in large part generated through transactions for sexual content.”

Utah’s complaint also accused the company of not regulating LIVE’s virtual currency exchanges, which it claims enables criminal activity like money laundering and drug sales. The state even accused the virtual currency of being used to “fund terrorist groups, such as the Islamic State of Iraq and Levant (ISIL).”

The unredacted information also refers to another internal study, Project Jupiter, launched in 2021 to investigate suspicions that TikTok LIVE was being used to launder money.

“As recently as 2023, TikTok compliance teams reported, ‘we have identified major money laundering criminal patterns on TikTok live platform,’” the complaint reads, claiming the company refuses to establish “accurate bookkeeping, real-time suspicious payment monitoring for fraud and money laundering, timely reporting processes to law enforcement of suspicious transaction reports, (Know Your Customer) verification for all users, or even processes to keep banned users off the platform.”

In a statement, Utah Gov. Spencer Cox called the unredacted information “evidence of a deliberate choice to prioritize profit over the safety and well-being of our children.”

“TikTok knew the harm its platform was causing, yet chose to look the other way, allowing predators to exploit minors in unconscionable ways,” Cox said.

And the state’s outgoing attorney general, Sean Reyes, said online exploitation of minors can lead to depression, isolation and “other tragedies such as suicide, addiction, and trafficking.”

“It would be outrageous enough to endanger our kids the way TikTok has — even if it was unintended. But the fact that it serves up minors on ‘TikTokLive,’ knowing the danger, understanding the damage, and still monetizing the exploitation of our kids is unconscionable,” said Reyes.

This case is Utah’s second lawsuit against TikTok, both brought by the Utah Department of Commerce. The first suit, filed in October 2023, takes aim at TikTok’s “endless scrolling” feature, which the state claims is intentionally designed to hook young people and keep them on the app longer.

TikTok did not immediately respond to a request for comment Friday.

https://www.yahoo.com/news/court-records-claim-tiktok-knew-195512936.html