An Allen County judge previously dismissed the case. (Photo illustration by Drew Angerer/Getty Images)
The Indiana Court of Appeals on Monday reinstated a lawsuit accusing TikTok and Chinese parent company ByteDance of deceiving consumers.
Allen Superior Court Judge Jennifer DeGroote dismissed Attorney General Todd Rokita’s lawsuits last November, writing that the state lacked personal jurisdiction over the firms and that the state hadn’t made a claim under the Deceptive Consumer Sales Act (DCSA).
But a three-judge panel from Indiana’s second-highest court disagreed, with Judge Paul Mathias authoring the opinion.
Chief Judge Robert Altice and Judge Mark Bailey concurred in the opinion, which handles both of Rokita’s lawsuits in one go.
The first alleges that alleges that TikTok acted in ways that caused the nature of the content available on its app to be misrepresented in various app stores; that TikTok misrepresented its enforcement of its Community Guidelines; and that TikTok misrepresented the effectiveness of its Restricted Mode for minors.
The second alleges that TikTok had omitted information that reasonable people would likely use in deciding whether to download or use the app — like the Chinese government allegedly having access to the personal data collected. Rokita also accused TikTok of falsely denying that China has such access, and that the company made those statements to try and get Hoosiers to download and use its app.
Mathias observed that TikTok actively and continuously does business over the internet with Hoosier residents: it has millions of users within the state, and reported making $46 million in Indiana-based income in 2021.
And, Rokita’s allegations concern activity that happened in Indiana.
“Any reasonable business could and should have anticipated being called into an Indiana court based on those alleged actions and TikTok’s substantial Indiana contacts,” Mathias wrote.
That means Indiana’s judiciary has power over TikTok, he held.
The panel also determined that TikTok’s business model — of exchanging access to its content library for a user’s personal data — counts as a consumer transaction under the DCSA.
The law bans suppliers — corporations that regularly engage in or solicit consumer transactions — from committing an “unfair, abusive or deceptive act, omission or practice in connection with a consumer transaction.”
While TikTok has argued that money needs to be involved, and notes that its app is free, Mathias held that the law doesn’t specifically say so. He wrote that TikTok is “selling” access for data: “That is the bargain between TikTok and its end-users.”
Mathias reversed the both case’s dismissal, and remanded for further proceedings.
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