The US Federal Trade Commission (FTC) has launched an inquiry into TikTok, centered on  TikTok's privacy practices, with a potential lawsuit looming that alleges violations of children's privacy laws and misleading users by claiming that China doesn't access their personal data, informed sources told Politico.

The FTC was contemplating either suing or reaching a settlement with TikTok amid talks with the US Justice Department, according to Politico. 

However, if a lawsuit was filed, TikTok would face several charges mounting up to tens of billions of dollars.

On March 14, the US House of Representatives passed a bill with a strong majority, aiming to compel TikTok to separate from its parent company or risk being banned nationwide. However, the bill must still navigate the Senate, where it is anticipated to encounter more challenges before potentially becoming law.

The vote is the latest in an ongoing political struggle over claims that the China-based business collects sensitive user data and deliberately censors material. TikTok has denied these allegations and has affirmed that it will not leak American users' data to Chinese authorities.

US must respect fair competition

In response, Beijing's Commerce Ministry spokesperson He Yadong said at a press conference just after that "the US should truly respect the principles of a market economy and fair competition [and] stop unjustly suppressing foreign companies."

He emphasized that Washington must create an environment that is "open, fair, just, and non-discriminatory" for foreign companies to invest and operate within the United States.
 
"China will take all necessary measures to resolutely safeguard its legitimate rights and interests," he affirmed.

Following the bill's adoption by the committee, White House staffers claimed that TikTok fans inundated Congress with phone calls after the app sent out a notice asking users to reject the measure.

“Why are Members of Congress complaining about hearing from their constituents? Respectfully, isn’t that their job?,” TikTok posted on X.

The Chinese Foreign Ministry Spokesperson Wang Wenbin stated that the decision is “entirely the logic of a bandit," adding, “The US House of Representatives passing this bill lets the United States stand on the opposite side of the principles of fair competition and international trade rules.”

He continued, “If so-called national security reasons can be used to willfully suppress other countries’ superior companies, there would be no fairness to speak of.”

Read more: US officials push for forced sale of TikTok's US operations