SALT LAKE CITY — A newly unredacted copy of a lawsuit filed by the state of Utah against social media giant TikTok alleges the company was aware of potential problems of sexual exploitation of children and money laundering for organized crime in its live-streaming feature.
"By TikTok’s own admission: 'we’ve created an environment that encourages sexual content,'" the unredacted copy of the state's complaint, obtained by FOX 13 News on Friday, said. "Shortly after launching LIVE, TikTok convened experts to advise it on safety measures. These experts warned TikTok that live streaming could be misused in 'harmful ways' and inspire 'atrocious acts' in front of a live audience. Despite these clear warnings, TikTok ignored most of the panel’s recommendations on enhancing safety, prioritizing profit over public safety."
A judge in Salt Lake City's 3rd District Court ordered more parts of the lawsuit to be unredacted as part of a long-running legal battle between Utah's Division of Consumer Protection, representing the state of Utah, and TikTok. On Friday, an unredacted copy was filed in the case and FOX 13 News obtained it. TikTok, in turn, accused the state of relying on misleading quotes and outdated company documents, presenting them out of context.
State political leaders have launched a public pressure campaign against social media platforms warning of harms to the mental health of youth and accusing the companies of not doing enough to guard against abuses. It includes TV ads and billboards. Litigation has also been filed against TikTok and Meta (the parent company of Facebook and Instagram).
Utah actually has two lawsuits going against TikTok. One alleges addictive algorithms harming Utah youth, the other alleges that TikTok's live-streaming feature operates like a "a virtual strip club" and sexually exploits children.
The unredacted copy of that lawsuit goes further, alleging that TikTok conducted its own internal investigation in 2022 called "Project Meramec."
"Hundreds of thousands of children between 13 and 15 years old were bypassing TikTok’s minimum age restrictions, hosting LIVE sessions, and receiving concerning messages from adults. The project confirmed that LIVE “enable[d the] exploitation of live hosts” and that TikTok profited significantly from “transactional gifting” involving nudity and sexual activity, all facilitated by TikTok’s virtual currency system," the unredacted lawsuit said.
TikTok had a separate investigation in 2021 called "Project Jupiter," the state of Utah's lawsuit claims, "to investigate suspicions that organized crime was using LIVE to launder money through TikTok’s gifting feature."
"TikTok discovered that criminals were selling drugs and running fraud operations on LIVE," the unredacted filing said.
The state previously alleged TikTok has refused to oversee virtual currency exchanges in a satisfactory way to guard against sexual exploitation, money laundering, terrorism financing, drug sales and illegal gambling.
"In 2022, internal company-strategy documents identified the risk of the 'real-time nature of livestreaming,' saying that 'TikTok LIVE is lacking in areas such as . . . payment compliance.' One significant risk the document identified was that '[c]riminals can use the gifting feature of TikTok LIVE to engage in cross-border capital transfer or money laundering. We will face huge risks if [we] fail[] to fulfill necessary anti-money laundering obligations,'" the unredacted copy of the lawsuit alleges. "Despite all this, TikTok LIVE’s CEO still found anti-money laundering failures 'not a big deal.'"
In a statement to FOX 13 News, a spokesperson for TikTok disputed the allegations made in Utah's complaint.
"This lawsuit ignores the number of proactive measures that TikTok has voluntarily implemented to support community safety and well-being. 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," the statement said. "We stand by our efforts, which include: robust safety protections and screen time limits for teen accounts enabled by default, Family Pairing tools for parents to supervise their teens, strict livestreaming requirements, and aggressive enforcement of our Community Guidelines on an ongoing basis."
In June, the company hosted an event for reporters in Salt Lake City, highlighting its safety features and future investments to guard against exploitation.
Utah's lawsuits against TikTok are advancing even as President-elect Donald Trump has stated he opposes a nationwide ban on the platform. The president-elect recently asked the U.S. Supreme Court to delay a hearing so his administration could pursue a "negotiated resolution."
