• TikTok has been fined £12.7 ($15.9) million by U.K. privacy regulators for failing to protect children's data, in a fresh blow to the Chinese-owned app.
• TikTok allowed 1.4 million children under the age of 13 to use the app in 2020, despite its own rules requiring users to be above this age to create a TikTok account, the Information Commissioner's Office said.
• The penalty comes amid calls for the app to be banned in the U.S. over national security concerns.

TikTok has been fined £12.7 ($15.9) million by U.K. privacy regulators for failing to protect children's data, in a fresh blow to the Chinese-owned app as it faces heightened scrutiny from regulators.

The U.K.'s Information Commissioner's Office said in a statement Tuesday that it was fining TikTok for "a number of breaches of data protection law, including failing to use children's personal data lawfully."

TikTok allowed 1.4 million children under the age of 13 to use the app in 2020, despite its own rules requiring users to be above this age to create a TikTok account, the watchdog said.

John Edwards, the U.K. Information Commissioner, said in a statement that TikTok "should have known better" and "should have done better."

"Our £12.7m fine reflects the serious impact their failures may have had. They did not do enough to check who was using their platform or take sufficient action to remove the underage children that were using their platform," he added.

A TikTok spokesperson told CNBC that the company was reviewing the ICO decision, as it considers next steps.

"TikTok is a platform for users aged 13 and over," the TikTok spokesperson told CNBC. "We invest heavily to help keep under 13s off the platform and our 40,000 strong safety team works around the clock to help keep the platform safe for our community."

"While we disagree with the ICO's decision, which relates to May 2018 - July 2020, we are pleased that the fine announced today has been reduced to under half the amount proposed last year," the spokesperson added.

The ICO had previously proposed fining TikTok £25 million for this privacy violation. The regulator said it decided to lower the value of the fine after striking its initial finding of unlawful use of special category data by TikTok.

"That does not mean that the use of special category data by social media companies is not of importance to the ICO. But we need to be strategic about our resources and, in this case, the Commissioner exercised his discretion to not pursue the provisional finding related to the unlawful use of special category data," an ICO spokesperson told CNBC via email.

The penalty comes amid calls for the app to be banned in the U.S. over national security concerns, and after administrations in the U.S., U.K. and several other countries prohibited the app from government-issued devices.

TikTok's CEO Shou Xi addressed concerns around security and privacy from U.S. lawmakers last month. Among the top issues of Washington officials is the potential influence of the Chinese government over TikTok.

Xi denied claims that TikTok has shared user data with Beijing and said that, since taking over as the firm's CEO, he has never held any discussions with Chinese government officials.

"TikTok has never shared, or received a request to share, U.S. user data with the Chinese government. Nor would TikTok honor such a request if one were ever made," Xi said in a written testimony to the House of Representatives Energy and Commerce Committee.

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