The Irish arm of TikTok set aside more than $1 billion (€950 million) in 2023 to cover the cost of potential fines relating to two Data Protection Commission (DPC) investigations.
According to recently filed accounts for TikTok Technology Limited, the Chinese-owned video-sharing platform saw its revenue in Ireland almost double to $650 million last year on the back of what it said was “higher demand” for its services.
However, the company reported a loss of just over $1 billion after setting aside $1 billion to cover possible fines and legal costs stemming from two DPC investigations.
The first relating to children’s privacy on the app saw the company fined €345 million in 2023. The second and ongoing inquiry relates to the transfer of user data to China and TikTok’s compliance with legal requirements for the transfer of personal data to third countries.
The DPC has sweeping powers under Europe’s general data protection regulation (GDPR) to supervise the pan-European operations of large tech groups such as TikTok that have their EU headquarters in Ireland.
TikTok’s Irish subsidiary, which employs 3,000 staff, provides services related to content moderation and data controlling plus sales, marketing and routine support to related entities.
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In its accounts, TikTok said the Irish arm was “involved in legal proceedings including regulatory investigations and litigation proceedings”.
“The company records a liability when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated,” it said.
“The range of reasonably possible outcomes and best estimates are based on the advice of legal counsel, correspondence and filings received to date, relevant mitigating and aggravating factors, comparison with similar matters and other factors, which under the relevant guidelines and legislation may impact the final liability,” it said, while noting the liability could differ from the amount provided.
The company’s accounts for 2023 show its operating expenses grew from $338 million to $1.6 billion last year, an increase of 388 per cent.
“A higher demand for the company’s service, rise in employment, data centre expenses and other related costs impact the serviceable fee receivable from the related company and therefore resulted in an increase of turnover and operating expenses,” it said.
The European Commission is separately investigating TikTok for suspected breaches of the Digital Services Act (DSA) in relation to the platform’s obligation to properly assess materials linked to election integrity.
US President-elect Donald Trump was this week also due to meet TikTok chief executive Shou Zi Chew as the company fights plans to have it banned in the US.
A US law passed earlier this year means TikTok will be banned unless it is sold by its Chinese parent company, ByteDance, before January 19th.
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