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TikTok parent company Bytedance sets aside $1 Billion to cover future European data privacy fines as the Chinese company faces a barrage of lawsuits over its mishandling of children’s data (www.forbes.com)

submitted 1 month ago by 0x815@feddit.org to c/technology@lemmy.world

19 comments fedilink hide all child comments

cross-posted from: https://feddit.org/post/3693467

Chinese social media giant Bytedance was dealt a stinging blow last September when Ireland’s data privacy watchdog issued it a record $370 million fine over its failure to properly safeguard the personal data of children using its app TikTok. New corporate filings suggest that Bytedance expects more fines like this to come. The company has explicitly set aside $1 billion to cover future fines from European privacy regulators.

Bytedance has faced a barrage of lawsuits and investigations from regulators around the world over TikTok’s addictive design, handling of user data and lack of safeguards for teenage users. Only yesterday, the attorneys general of thirteen states and the District of Columbia filed separate lawsuits claiming that TikTok was designed to be used compulsively and had harmed children and teens as a result.

The $1 billion provision for future fines was revealed in corporate accounts for TikTok’s European operations filed this week with the United Kingdom’s Companies House. The accounts also showed that TikTok’s European revenues surged to $4.57 billion last year, up from $2.6 billion in 2022. Its losses have also nearly tripled to $1.3 billion in 2023, up from $512 million.

[...]

The scale of total fines and penalties facing TikTok on the European continent could be even larger than the $1 billion provision in its 2023 accounts. The European Commission opened an investigation into TikTok under the Digital Services Act (DSA) in February 2024. The European Union can fine companies up to 6% of global revenue for breaches of the DSA, or impose a ban.

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[–] Visstix@lemmy.world 29 points 1 month ago (2 children)

How the fuck do they have a loss of 1.3 billion on a video app?

[–] Badeendje@lemmy.world 29 points 1 month ago

Because it's only loss.

If you throw a bunch of investments or R&D costs into this year, you can all of a sudden have a huge financial loss while having positive cashflow.

Same is true for buying other companies, depreciation and other fuckery with stuff like "goodwill".. or you just paid off a massive loan to an actual creditor, bought back stocks, or moved cash to your offshore holding to dodge taxes (in the form of renting your own IP from your own company in said tax haven)... The list is nearly endless.

The point is, in most countries a loss can be spread out over multiple years to offset profits. Meaning you don't have to pay taxes on the profits.

[–] bokherif@lemmy.world 1 points 1 month ago

Data collection, data sales, advertisements.