TikTok projects US$77 billion in sales from TikTok live, lawsuit claims
The financial revelations come while TikTok’s future in the US remains uncertain
TIKTOK generated US$1.7 billion globally in sales from TikTok Live in just one quarter in 2023, with more than US$400 million of that coming from the US, according to a newly unsealed lawsuit brought against the company in Washington. TikTok projects that the popular live streaming feature will generate US$77 billion globally by 2027, the complaint claims.
The numbers surfaced on Monday (Mar 3) are part of a lawsuit filed in October by District of Columbia attorney general Brian Schwalb alleging rampant sexual and financial exploitation of children on Live, where TikTokers can broadcast in real-time to billions of strangers around the world. Viewers can spend real money to send streamers digital tips in the form of lighthearted gifts such as virtual ice cream cones and fluffy animals. Streamers can then redeem those gifts for cash while TikTok takes a cut.
The new financial data, which has not been previously reported, offers a unique glimpse into TikTok’s business as the company faces a possible ban in the US. As a private company, TikTok’s financial data is not public, which has made valuing the app and its US business a difficult task. TikTok Live is one of the app’s most popular features, and has become even more central to the platform since the launch of TikTok Shop in late 2023 because sellers and creators lean increasingly on livestreams to sell products.
The complaint, citing a 2022 Forbes investigation that showed adult men have regularly used TikTok’s virtual gifting system to coax minors into performing racy acts, described TikTok Live as “operating in part like a virtual strip club” and accused the company of breaking consumer protection and money transmission laws by making false or misleading statements about how safe young users are on the platform.
A bipartisan group of attorneys general from more than a dozen states filed separate lawsuits against TikTok last year over various alleged harms to kids. Utah, Vermont, New Hampshire and Kentucky also focused their complaints on TikTok Live.
“This lawsuit ignores the number of proactive measures that TikTok has voluntarily implemented to support community safety and well-being,” a TikTok spokesperson said. “Instead, the complaint cherry-picks misleading quotes and outdated documents and presents them out of context, which distorts our commitment to the safety of our community.”
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The spokesperson highlighted the app’s default screen time limits for teens, tools for parents to supervise their teen’s account, livestreaming age requirements and ongoing enforcement of its community guidelines. The representative did not respond to questions about TikTok Live’s financial details.
The financial revelations come while TikTok’s future in the US remains uncertain. A new national security law that took effect in January could ban the app nationwide unless TikTok’s China-based parent company, ByteDance, agrees to sell TikTok’s US business to a non-Chinese owner, which ByteDance has so far declined to do.
President Donald Trump temporarily halted enforcement of that law until early April, allowing ByteDance more time to negotiate a possible deal. Several interested buyers have emerged, but with just one month left before the deadline, it is unclear whether any significant progress has been made.
Child safety is central to the national security concerns that the US government has raised about TikTok’s Chinese ownership. There are fears that the app could be used to manipulate young people, or collect data on them for blackmailing purposes that could potentially jeopardise an entire generation of Americans with little understanding of the stakes.
Internal TikTok findings from late 2022 showed that some 70 per cent of 13- to 15-year-olds claim they are over 18 when signing up for the app, according to the District of Columbia’s partially unredacted complaint, which unlocks their ability to broadcast live and collect gifts. (At the time, TikTok’s policies forbade people under 16 from streaming live; today, users must be at least 18 years old to use the feature.)
The complaint also claims that TikTok’s own data shows children ages 13- to 17-years-old in Washington spend more than two hours a day on the app, often in the middle of the night between the hours of 3 am and 5 am. Other internal TikTok documents on the topic were unsealed in January, and first reported by Bloomberg, as part of a similar lawsuit brought last year by the state of Utah.
“TikTok’s predatory behaviour is inflicting incalculable damage on an entire generation of children,” Schwalb said on Monday. “It fuels mental health problems, sleep loss, body dysmorphia, suicidal thoughts, and paedophilia. Our lawsuit will proceed, and we will keep fighting to hold TikTok accountable.” BLOOMBERG
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