Understanding the Recent TikTok Tensions
TikTok is facing renewed scrutiny over its data collection and sharing practices amid the US and Australia reportedly considering a ban on TikTok and other Chinese social apps, which has enlightened a frenzy of commentary and debate on censorship, data privacy, and national security.
Growing anti-Chinese sentiment across industries has positioned China and Chinese-based companies as global adversaries to the safety and wellbeing of Americans.
The Committee on Foreign Investment in the United States (CFIUS) opened a national security investigation into ByteDance’s acquisition of Musical.ly (which eventually rebranded to TikTok) last year. The investigation is still ongoing. The US Army and Transportation Security Administration have banned the app from employee’s phones since the investigation began.
Two recent unrelated global incidents — the recent TikTok ban in India, and the app pulling out of the Hong Kong market as a result of the new national security law — caused a flurry of concern for the safety and security of users’ privacy in America.
So far, any claims concerning the sharing of data with the Chinese government are unsubstantiated. TikTok vehemently denies these allegations, stating that the app has “never shared TikTok user data with the Chinese government, and would not do so if asked.”
The US Administration can, in fact, ban an app from the US via the findings of the CFIUS investigation, though without proof that TikTok has or does share data with the Chinese government, any attempt to do so would face legal opposition and likely be overturned.
Amid all the noise surrounding the alleged national security concerns, there has not been a reported mass exodus from the app. Social conversations around the topic of banning TikTok are growing, up 153% in the last seven days, though support for or against the ban is hard to discern with social listening tools.
TikTok will likely benefit from user growth as a result of the Streisand Effect, at least temporarily, as conversation around attempts to ban or remove the app will draw more people to download the app to see what the fervor is all about.
ByteDance launched Douyin, the Chinese version of TikTok in China in September 2016, then TikTok was launched in 2017 for iOS and Android in most markets outside of China. TikTok became available in the US after merging with Musical.ly in August 2018. TikTok is available in over 150 countries, with two billion total downloads, and an estimated 80 million monthly active users in the United States, and is currently the fastest-growing app in America.
TikTok blew up across all audiences amid quarantine and stay-at-home orders across the world. At the end of Q1 2020, TikTok had been downloaded 315 million times, up from its previous best the quarter before. A key differentiator between TikTok and other social media platforms is its low barrier to entry, making it easy for any user to produce high-quality content, grow an audience, and go viral.
TikTok and its Chinese equivalent hit two billion downloads in early 2020, leveling it close to Facebook’s global scale and reach. And it wasn’t just teenagers and young people. Heading into Q3 2020, 25-to-35-year-olds are TikTok’s fastest-growing demographic in the US. Advertisers followed shortly after. The app’s self-serve ad platform only became available in the US last week.
In late June 2020, two things happened on the world stage, leading to the events that have transpired in the States. First, India banned TikTok alongside other Chinese apps in retaliation for a border skirmish with Chinese forces. This was a huge blow to TikTok’s user base, with over 200 million users in India. It was also one of the first times where digital connectivity was used as retaliation for physical violence. Second, China passed a sweeping (though, ambiguous) national security law for Hong Kong, which reduces the city’s autonomy and cracks down on recent protests.
Once the law took effect, TikTok immediately pulled out of the region, and Google, Facebook, and Twitter reportedly paused the “processing of data requests from the Hong Kong government as they reviewed” the law. Notice the difference between the global tech companies’ responses. Western social media apps stopped processing requests but kept other operations humming along, while TikTok stopped operations entirely.
In the US, about three months ago, a Redditor posted that they’d been reverse-engineering TikTok and didn’t like what they saw in terms of data collection and user privacy. With the help of other developers, r/tiktok_reversing was born while other data and cybersecurity experts did their own research. Penetrum, a prominent cybersecurity firm, released its findings, as did Zimperium, a private mobile security company. Most everyone came to the same conclusion: TikTok collects user data that is arguably seen as more invasive than US social media apps. The “arguably” is subjective, and what’s fueling the debate that’s dominating news cycles.
Similar to other social media platforms, TikTok collects a range of information such as your IP address, location data, and device type while storing your browsing and search history and content of messages you exchange on the app. This information is no different than what’s collected by some US tech companies like Facebook or Google. According to TikTok’s website, this data can be shared with Bytedance or other affiliates, likely in the same way Facebook or other apps can share data via API with partners.
TikTok also said its data centers are outside China, and none of its data is subject to Chinese law. In a blog post from April, TikTok said its working to limit the number of employees who have access to user data and the scenarios where data access is enabled.
More than anything, we believe the controversy surrounding TikTok is a byproduct of growing anti-China sentiment and complex foreign affairs and politics interfering with social media and tech’s role in our society.
Yes. The Administration can attempt to ban TikTok though its efforts are unlikely to succeed. According to experts, there are really only two ways President Trump could try to ban TikTok in the US. First, he could sign an executive order to block the app’s US network, which is how India blocked the app from its network. This would order the Commerce Department to list ByteDance on the Entity List, which would then require Apple and Google to remove TikTok from mobile phones.
Both the executive order and the Entity List ban would face legal opposition and would likely be overturned. From Byers Market, “while the White House has banned Huawei and ZTE from doing business in the US, it has no legal justification for taking similar action against ByteDance, since it has yet to prove that the company shares US user data with China.” As mentioned earlier, TikTok denies all data sharing allegations.
The more likely path President Trump can use is to wait for the results of the investigation led by the Committee on Foreign Investment in the United States, which will likely attempt to push ByteDance to sell TikTok. If CFIUS proves that TikTok shares data with the Chinese government, it would have more leverage in demanding ByteDance sell Musical.ly, effectively disbanding TikTok’s US business. According to Aneesh Chopra, the US’s first Chief Technology Officer under President Obama, “the CFIUS path is the only one that’s possible.”
For brands revisiting any investments or involvement with TikTok, PMG’s recommendation is to understand the evolving politics and policies shaping public perception and work with your internal teams to ensure that, as with any partner, the app or platform aligns with the values of your brand and audience.
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PMG is working closely with our TikTok partners to understand the extent of any data privacy or security concerns and will be updating clients accordingly if any new information comes to light.
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