The Trump administration is close to settling a lawsuit with TikTok over alleged child privacy violations, with the company expected to pay $400 million, which the administration intends to use for President Donald Trump's Washington, D.C., "beautification" projects.

The proposed settlement would end a 2024 lawsuit brought during the Biden administration that alleged that the then-Chinese-owned social media company engaged in "massive-scale invasions of children's privacy" by collecting extensive data from children without notifying or obtaining consent from parents, News.Az reports, citing ABC news.

While sources say the administration and TikTok are finalizing the terms of the settlement, it must still be approved by a vote of the TikTok board, which is expected to take place as soon as Friday.

As part of the proposed settlement terms, which are not expected to include an admission of wrongdoing, TikTok would agree to pay the U.S. government $400 million, sources familiar with the matter told ABC News -- money the administration intends to use for some of the ongoing "beautification" projects in the nation's capital, the sources said. 

While the proposed settlement is not expected to detail specific projects the money would support, the funds are expected to be directed to either the Department of Interior, the Department of Commerce, or both, sources familiar with the discussions said. Officials in the White House have had weekslong discussions about whether they could legally use the money to pay for Trump's proposed massive 250-foot triumphal arch near Arlington National Cemetery, the sources said. 

On Thursday evening, President Trump personally traveled down to the National Mall to tout his administration's "beautification" projects around the nation's capital, telling reporters his administration is "working on some other jobs" and saying he was most excited about the triumphal arch, which he said would break ground "very soon."

While the Department of Justice regularly reaches settlements with private companies accused of wrongdoing, the proposed TikTok settlement marks a departure from the practice of using the settlement funds to resolve the alleged wrongdoing or compensate victims.

The Department of Justice alleged that millions of children under the age of 13 were subjected to extensive data collection and excessive content meant for adults, but the proposed settlement funds are set to directly support Trump's efforts to improve the appearance of the nation's capital. 

The White House referred questions on the matter to the Justice Department, which declined to comment. TikTok did not respond to a request for comment from ABC News.

The $400 million agreement would come as the Trump administration attempts to cut funding from the National Park Service while surging more than $10 billion in their proposed 2027 budget to form a "Presidential Capital Stewardship Program." According to the Trump administration's proposed budget, the president hopes to "coordinate, plan, and execute targeted, priority construction and beautification projects" throughout the capital to make "Washington, D.C. -- a once-great city --safe, clean, and beautiful again." 

Further complicating the matter is President Trump's direct role in helping to create the business venture that will pay out hundreds of millions for his D.C. projects, raising possible ethical concerns about his personal interest in the use of the settlement funds.

'I am so happy to have helped in saving TikTok!'
Since taking office last year, Trump has fashioned an unprecedented relationship with TikTok after the company was banned from operating unless it was sold to a U.S. owner. When the social media app briefly went dark in January 2025, Trump, on his first day in office, signed an executive order that allowed the company to continue operating in the United States, essentially vowing not to enforce the ban while negotiations over a potential sale continued. 

Following months of negotiations, TikTok earlier this year finalized a $14 billion deal creating an American venture -- partially owned by Trump ally Larry Ellison's database software company Oracle, private equity firm Silver Lake, Emirati investment firm MGX, and others -- to address national security concerns stemming from TikTok's ties to Beijing. TikTok's Chinese parent company, ByteDance, still retains a minority stake in the American version of TikTok, which licenses its algorithm from ByteDance. 

"I am so happy to have helped in saving TikTok! It will now be owned by a group of Great American Patriots and Investors, the Biggest in the World, and will be an important Voice," Trump said in a social media post in January before thanking Chinese President Xi Jinping "for working with us and, ultimately, approving the Deal." 

'Massive-scale invasions of children's privacy'
The 2024 lawsuit that the Biden administration's Department of Justice brought against TikTok and ByteDance, which followed a referral from the Federal Trade Commission, alleged that the social media company violated the Children's Online Privacy Protection Act by allowing children under the age of 13 to create and use TikTok accounts without their parents' consent, and collected "extensive data from those children." 

"By adhering to these deficient policies, Defendants actively avoid deleting the accounts of users they know to be children," the complaint alleged. "Instead, Defendants continue collecting these children's personal information, showing them videos not intended for children, serving them ads and generating revenue from such ads, and allowing adults to directly communicate with them through TikTok."

TikTok pushed back against the claims, arguing they were "going above and beyond" federal law requirements, while pointing the finger at children for figuring out how to "sign up for TikTok in contravention of the company's policies." The complaint appears to have been stalled in pre-trial litigation -- with TikTok yet to file a motion to dismiss the case -- and the judge overseeing the matter recently set a trial for May 2027. 
In the past, the Trump administration has been critical of settlements that do not directly compensate victims of wrongdoing. During Trump's first term, former Attorney General Jeff Sessions banned settlements that resulted in payments to non-governmental, third parties that were not directly harmed by the conduct. Former Attorney General Pam Bondi reinstated a similar policy in 2025 banning improper third party settlements. 
"Settlements, including civil settlement agreements, deferred prosecution agreements, non-prosecution agreements, and plea agreements, are a useful tool for Department attorneys, and should be used, first and foremost, to compensate victims, redress harm, or punish and deter unlawful conduct," Bondi wrote in a Justice Department memo. 

Making Washington 'safe, clean, and beautiful again'
Over the last year, the Trump administration has prioritized carrying out "beautification" projects such as the extensive renovation of the White House East Wing, the planned arch near Arlington, the resurfacing of the Lincoln Memorial reflecting pool, and other projects to upgrade local infrastructure and parks.  

Beyond the $400 million from the TikTok settlement, the Trump administration's proposed 2027 budget includes $10 billion for a "Presidential Capital Stewardship Program" to create a fund within the National Park Service to improve buildings and parks in and around D.C. 

"As the capital of the greatest Nation in the history of the world, Washington, D.C. should showcase beautiful, clean, and safe public spaces. However, many historic park features and public-facing infrastructure throughout the city show signs of decay, years of heavy public use, and inadequate maintenance," the administration said in its proposed 2027 budget. 

While details about the massive $10 billion fund are sparse, the Department of the Interior's 2027 budget says the money would be used to "rehabilitate historic buildings and landscapes, and enhance architectural grandeur so that Americans can once again be proud of their capital." 

The size of Trump's D.C. fund would dwarf the operating budget of the National Park Service, which the Trump administration seeks to cut by more than a billion dollars to a total to $2.2 billion. The Trump administration's 2027 budget also would reduce staffing in the National Park Service -- which manages more than 400 sites including 63 national parks -- by approximately 3,000 employees. 

When pressed about the $10 billion beautification fund, Interior Secretary Doug Burgum told lawmakers in April that the money would be used for "deferred maintenance" on existing facilities. 

"D.C. is like a state. I mean it's not like [the fund is only for] the National Mall -- it's for the greater capital region," Burgum said. "I believe that if we got together, we could come back and go. 'That number is not high enough.'" 

News.Az 

By Ulviyya Salmanli