Washington DC’s attorney general accuses TikTok of preying on children and running an illegal virtual economy

Washington DC Attorney General Brian L. Schwalb has taken action against social media giant TikTok, filing a lawsuit accusing the platform of fostering an environment harmful to children and operating an illegal virtual economy without a permit. As reported today, October 8, by the Office of the Attorney General (OAG), the OAG alleges that TikTok deliberately designed its platform to pander to the vulnerabilities of young minds, perpetuating cycles of addiction that have been shown to that they lead to mental and physical problems. .

According to the OAG’s complaint, the app misleads users and their parents about the real dangers present, with TikTok claiming that the platform is a safe environment for children. The lawsuit, part of a broader initiative involving fourteen attorneys general, has documented a troubling quotient of psychological issues among the District’s youth—such as body dysmorphia, sleep loss, depression, anxiety, and a significant number of suicidal thoughts—that align to the screen time usage patterns revealed in the Office of the State Superintendent of Education report.

In unraveling the platform’s mechanisms, the OAG points to TikTok’s use of a dopamine-boosting algorithm that anchors young people to their screens, a strategy that claims to increase the risk of online financial exploitation. Beyond just causing addiction, the company is accused of untruthfully portraying its app as manageable in terms of engagement and data privacy, when in reality it collects and exploits user data, according to the OAG statement.

Worse still, TikTok is under fire for operating what is considered an unlicensed money transmission system. Its features – TikTok LIVE and TikTok Coins – facilitate a virtual economy where users can exchange real money, after TikTok deducts up to 50% service fees. As Attorney General Schwalb has stated, such operations occur without the necessary registration with the DC Department of Insurance, Securities, and Banking (DISB) or the U.S. Department of the Treasury, circumventing safeguards designed to prevent money laundering and prevent fraud.

The Attorney General’s Office has further highlighted the role TikTok plays in the sexual exploitation of children on its platform, with the company profiting from every transaction made during livestreams. “TikTok’s platform, designed to be dangerously addictive, is causing enormous harm to an entire generation of young people,” Schwalb said. “This lawsuit is intended to put an end to the illegal, deceptive and predatory conduct.”

In response to these alarming trends, consumers are urged to report unfair business practices or illegal activities related to TikTok or other unethical business entities. OAG guidance includes filing a complaint online, contacting the Consumer Hotline or emailing the designated consumer protection department for further assistance.