Utah has filed a lawsuit against the video-streaming app TikTok, accusing it of operating a “virtual strip club” that allegedly exposes young users to sexual exploitation. The lawsuit, though heavily redacted, claims that TikTok’s “TikTok Live” feature has enabled profit through manipulative design elements that contribute to the exploitation of children emotionally, financially, and sexually.
This feature allows users to live stream themselves and engage with viewers in real time, who can send virtual gifts that can be converted into real money.
Combined with TikTok’s virtual currency system, the Live feature “allows adults to prey on children in many egregious ways, including by transacting with and soliciting sexual acts from minors,” the lawsuit states.
“LIVE is far from a safe place for users—particularly children—and these dangers are no accident,” the complaint states. “The harmful and unconscionable acts on LIVE stem directly from TikTok’s in-app virtual economy, which has already facilitated billions of dollars in transactions.”
“The money is exchanged among users, stored on user accounts, and withdrawn from the platform, with little to no oversight, despite TikTok’s control over the platform. This monetary scheme has fostered an alarming culture of exploitation and illegal activity, ” the lawsuit adds.
Utah’s lawsuit references internal TikTok documents obtained through a subpoena in another case against the company. The lawsuit alleges that TikTok is aware its TikTok Live feature functions somewhat similarly to a virtual strip club, providing streamers a platform to perform and allowing users to send virtual money.
“In countless live streams, minors have been encouraged by adults to—among other illicit acts—strip, spread their legs, and flash body parts to the camera, in exchange for virtual gifts,” it states.
“Despite knowing and facilitating these dangers, the company turns a blind eye because LIVE has helped make TikTok very rich.”
In other sections of the lawsuit, it alleges that TikTok’s TikTok Live feature, with its virtual currency system, circumvents regulatory frameworks meant to detect and prevent activities such as sexual exploitation, money laundering, terrorism financing, drug sales, and illegal gambling. The lawsuit contends that TikTok fails to adequately supervise virtual currency transactions.
“Uniformly across all these dangerous activities—predatory gifting, money laundering, illegal gambling, and drug trafficking—TikTok rakes in large profits by taking a cut of each transaction,” the lawsuit states.
The lawsuit aims to halt TikTok’s ongoing profit from deceptive design features that allegedly facilitate sexual exploitation, sex trafficking, pornography distribution, and other illegal activities through its virtual currency system, violating the Utah Consumer Sales Practices Act.
Utah’s Attorney General and the Division of Consumer Protection are also seeking a jury trial in this case.
This lawsuit marks Utah’s second legal challenge against TikTok, which is owned by China-based ByteDance. Previously, in October, the state sued the company over allegations that its addictive algorithm and other features contribute to a compulsive checking and viewing behavior among young users, exacerbating mental health concerns.
