N.C. Trial Court Rejects Sealing of Parts of State's Complaint Against TikTok

From Judge Adam Conrad’s opinion Tuesday:

[T]he State has sued the owners and operators of TikTok, a popular app for sharing and viewing user-created videos. According to the State, the makers of TikTok designed the app to be highly addictive to minors and then undertook a deceptive publicity campaign to convince parents and children that the app is safe. On that basis, the State asserts a claim for unfair or deceptive trade practices under N.C.G.S. § 75-1.1…. Defendants and Apple maintain that the complaint should be sealed….

The presumption is that court filings are public records. They must be “open to the inspection of the public,” except as prohibited by law. N.C.G.S. § 7A-109(a). For that reason, the burden is on the designating party to overcome that presumption. To meet its burden, the designating party must clearly articulate “the circumstances that warrant sealing the document” in a motion to seal or supporting brief…. The designating party must explain how public “disclosure would cause serious harm” that outweighs the public’s interest in open courts….

Defendants … ask to seal Exhibit A to the complaint, which is a video compilation of statements from their employees, ostensibly to protect the employees’ personal information. By personal information, Defendants apparently mean the employees’ names and job titles. There is no compelling reason to seal that information. The employees’ association with the case may entail some embarrassment, but that alone does not outweigh the public’s right of access. See Doe v. Doe (N.C. App. 2018) (stating that “an interest in protecting third parties from ‘trauma and embarrassment’ or ‘economic damage’ has not been recognized as a compelling state interest outweighing the constitutional right of public access to the records of our courts”).

The balance of Defendants’ argument concerns allegations about its internal and external approaches to compulsive TikTok use by minors. In broad strokes, these allegations describe measures urged by Defendants’ employees to mitigate TikTok’s addictiveness, resistance to those measures by senior officials, metrics showing that the app’s safety features did not work or could be easily evaded, and staff cuts that inhibited Defendants’ ability to moderate content in keeping with TikTok’s Community Guidelines. These allegations are undoubtedly disputed, and they might be embarrassing, but they are not competitively sensitive. See, e.g., Fleming v. Horner (N.C. Super. Ct. 2020) (“[S]ealing is not warranted merely because allegations are potentially embarrassing or injurious to the reputation of a party.”); Bradshaw v. Maiden (N.C. Super. Ct. 2020) (denying motion to seal potentially embarrassing information).

Although Defendants suggest that disclosure of some of this information could allow malicious users or other bad actors to circumvent TikTok’s safety processes, it is difficult to see how that could be true. The complaint does not provide a roadmap for hackers. Rather, it alleges that Defendants themselves undermined TikTok’s safety processes by designing them to fail. Again, Defendants undoubtedly dispute these embarrassing allegations. But the way to set the record straight is through discovery, not by concealing the complaint from the public.

As to the body of the complaint, the court reasoned:

Apple’s … argument … is limited to paragraphs 40 and 44 of the complaint. Paragraph 40 states how many times North Carolinians downloaded TikTok from Apple’s App Store between 2018 and 2023, as well as the total amount of in-app payments made by users with Apple devices. Paragraph 44 generally states that Defendants advertised TikTok in the App Store, including to minors. Although Apple asserts that this data and information is sensitive (and even deserving of protection as a trade secret), its argument is not convincing. The disclosure of historical data—going back seven years—about downloads and in-app payments is highly unlikely to cause competitive harm to Apple or Defendants. And the discussion of advertisements in the App Store “is far too general to be sensitive.” The Court therefore denies Apple’s request.

As for Defendants, they seek to redact more than a third of the complaint (narrowed from their original request to redact nearly two-thirds). According to Defendants, the complaint contains “confidential financial and usage data,” “business and marketing strategy” information, “personal information regarding employees,” and “highly confidential proprietary information about the TikTok platform’s safety and content moderation systems, processes, and policies.”

Again, Defendants’ argument is not convincing. Several paragraphs recite facts and figures about the number of minors using TikTok, how often minors use the app on average, Defendants’ profitability and advertising expenditures, and Defendants’ contractual relationship with the National Parent Teacher Association. This information does not appear to be unusually sensitive. And even if it had some competitive value, all or nearly all of the data is years old and, thus, quite stale in an industry that seems to change by the day. The Court is not persuaded that disclosure of this information carries a serious risk of competitive harm.

A few paragraphs discuss TikTok’s features—including its algorithm (or recommendation system), push notifications, and software filters. It may be true that Defendants have a strong interest in keeping TikTok’s algorithm secret. But the complaint’s general description of the algorithm’s operation does not come remotely close to disclosing anything truly secret about it, especially when viewed in context with other paragraphs that Defendants do not seek to redact. The descriptions of TikTok’s notifications and filters are equally general. These high-level descriptions do not merit sealing.

Thanks to the Media Law Resource Center (MLRC) MediaLawDaily for the pointer.

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