A federal judge looked at TikTok's settlement structure and did what judges get paid to do. Recognized that paying $300 million plus maybe another $100 million if something bad happens is not the same as paying $400 million. The bad thing already happened. The FTC terminated the 2019 consent decree against Musical.ly back when Musical.ly still existed as a legal entity anyone remembered.
TikTok's lawyers structured this like a teenager promising to clean their room. They'd pay three hundred million now and another hundred million if mom got really mad about that thing from 2019. Mom already got mad. In 2019. The consent decree got terminated. The condition was met. But TikTok wanted credit for offering four hundred million while only planning to pay three.
The judge signaled rejection of this accounting method. Signaled is court reporter speak for "laughed them out of chambers but politely because robes require decorum."
Musical.ly was the app where children lip-synced to copyrighted music before ByteDance bought it and rebranded it as TikTok so the same children could lip-sync to copyrighted music under a different name. The FTC slapped Musical.ly with a consent decree for privacy violations. Then the decree got terminated. Then TikTok agreed to pay money contingent on that termination. Then TikTok tried to count that contingent money as part of a larger settlement. Then a judge remembered how conditional payments work.
If you bought TikTok stock thinking a $400 million settlement meant regulatory certainty, congratulations on discovering that reading the fine print matters even when you can't read.
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