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TikTok and its parent company ByteDance will pay the US state of Alabama $100 million and make a series of changes to restrict children's usage in the state as part of a lawsuit settlement.
As reported by the BBC, the deal was reached just before a jury trial was set to begin on Monday.
Fresh child's usage limits on TikTok
The agreement has ended a lawsuit alleging TikTok is intentionally designed to addict children to its feature, mirroring a string of lawsuits against social media platforms.
Following the settlement, the company is now required to install a number of new safety features, including a two-hour daily usage limit for children as well as overnight and school-hour restrictions.
Other safety features demanded as part of the deal include a host of measures to allow parents to heavily moderate usage by their children, along with restrictions on some content, and new ways to verify the age of young users.
TikTok will also limit children's accounts being discovered by adults, and notify parents to any "suspicious interactions" between teen users and adult users.
A complete ban on all cosmetic filters for children will also imposed.
The changes will only apply in Alabama. It marks the platform's first settlement with a US state.
"We're very pleased," said Katherine Robertson, chief counsel in the Alabama Attorney General's office in an interview with the BBC.
Time frame to implement new limits
The new time limits and usage blocks are due to take effect immediately.
However, TikTok has up to a year to implement other changes included as part of the settlement, such as the establishment of age verification measures.
Many of the measures follow a framework established by an August settlement struck between social media rival Meta and 52 state Attorneys General.
TikTok has agreed to pay up to $300 millions to Alabama if conditions of the new settlement are not met. The $100 millions payment is due to the state within 45 days.
Earlier this year, TikTok split its business ownership, with a new group of investors taking control of operations in the US. The remainder of the business is operated out of China.
ByteDance, the parent company of TikTok in China, was also part of Friday's settlement as ByteDance remains a minority owner of the US joint venture.
