In a statement released on Tuesday, the FTC announced that it has been investigating TikTok and ByteDance regarding their compliance with a settlement order made to video sharing app Musical.ly in 2019.
(PDF)
https://www.ftc.gov/system/files/ftc_gov/pdf/bytedance-musical-commission-statement.pdf
Before TikTok there was Musical.ly that received a fine by FTC
Musical.ly was aquired by ByteDance in 2017, and subsequently merged with TikTok in 2018
The FTC's $5.7 million settlement with Musical.ly concerned allegations that the app had gathered the personal information of children under 13 without parental consent — a violation of COPPA. According to the FTC, Musical.ly users provided information such as their name, email address, and phone number to create an account, however their age was not requested prior to 2017. This meant that children could create accounts and supply their personal information without parental permission.
The FTC also objected to Musical.ly making all account profiles public by default, and allowing users to send direct messages to any other users
As part of the 2019 settlement, Musical.ly was to remove all videos made by children under 13 and comply with COPPA going forward. TikTok has since implemented several new measures for protecting children's privacy, including introducing a limited app experience for users under 13 and making the accounts of users aged 15 and under private by default
Even so, it seems that the FTC still considers TikTok's efforts inadequate, though it has not yet specified exactly how the app is allegedly violating the law.