TikTok is a popular short-form video app owned by the Chinese company ByteDance. It has over 1 billion monthly active users globally. In the U.S., TikTok has faced scrutiny over data privacy and security concerns due to its Chinese ownership.
In June 2022, President Biden signed an executive order requiring ByteDance to divest TikTok’s U.S. assets over national security concerns. After months of negotiations, ByteDance reached a new agreement with the U.S. government in late 2022/early 2023 to alleviate data security concerns. This agreement aims to allow TikTok to continue operating in the U.S. while addressing the government’s security concerns.
Details of the Agreement
The new agreement is between the popular social media platform TikTok and the U.S. government. It aims to address ongoing concerns around data privacy and security. The key parties involved are TikTok, its parent company ByteDance, and Oracle which will now store U.S. TikTok user data on its cloud servers.
According to the Terms of Service, the main provisions include:
- TikTok will store all U.S. user data on Oracle’s servers based in the United States.
- Oracle will be the trusted technology provider responsible for hosting and securing the data.
- TikTok has created a specialized department focused on data security under U.S-based leadership.
- There will be strict access controls and encryption of user data.
- Audits will be conducted to ensure no data access from China.
This agreement aims to assure U.S. authorities that user data will be protected and isolated from ByteDance or the Chinese government. It requires major changes in how TikTok stores, processes and controls U.S. user data. The company will now have to shift its data storage, build new data centers, and create new data governance controls.
Data Security Provisions
The agreement addresses data security concerns by stipulating how TikTok will store U.S. user data. According to TikTok, “You agree to implement appropriate technical and organisational measures to ensure the security of the TikTok Developer Services Data, including protection against unauthorized or unlawful processing and against accidental loss, destruction or damage.”
The agreement provides oversight mechanisms related to data access. TikTok states that “access to TikTok Developer Services Data will be limited to authorized personnel who require access in order to perform their duties.” Audits will be conducted to ensure compliance.
This addresses previous concerns raised about Chinese access to U.S. user data. The agreement stipulates that access to TikTok U.S. user data will be tightly controlled and audited. This provides more data protection than was previously in place.
Implications for TikTok
The new agreement allows TikTok to continue operating and growing its business in the lucrative U.S. market (source). Under the deal, TikTok can avoid being banned or forced to sell off its U.S. operations, which would have severely impacted its revenues and growth (source). Instead, TikTok now has a framework in place to address data security concerns while expanding its user base, content creators, advertising, and partnerships in the U.S.
However, TikTok still faces challenges around earning trust on data practices and mollifying some critics. There are no guarantees against reversals of the agreement under a new administration or future data breaches (source). TikTok will need to clearly demonstrate compliance and likely make compromises around data access. While the agreement provides more certainty, TikTok has ongoing work to mitigate remaining risks and fully establish itself in the U.S.
Response from TikTok
TikTok has responded to the agreement in official statements, providing perspective on the terms and outlining future strategic plans. TikTok’s CEO Shou Zi Chew acknowledged that some China-based employees had access to U.S. user data but stated that the company was making changes to restrict access and minimize data flow to China (1). In an August 2020 statement, TikTok asserted that it has never shared user data with the Chinese government or censored content at the government’s request (2).
While initial responses indicate TikTok plans to comply with the agreement’s provisions, the company will likely aim to push back on certain terms it views as too restrictive or compromised. However, TikTok is incentivized to reach a resolution that allows continued U.S. operations, given the massive userbase and revenue at stake. Going forward, TikTok may further decentralize its global operations to distance itself from ByteDance control.
(1) https://www.wsj.com/articles/tiktok-exec-says-agreement-with-u-s-government-to-address-concerns-over-user-data-11663198654
(2) https://newsroom.tiktok.com/en-us/tiktok-responds
U.S. Policy Context
The agreement between TikTok and the U.S. government comes amid broader concerns by American officials over the security risks posed by Chinese tech companies. As highlighted by Lindsay, Chefitz, and Koh in an analysis from the Brookings Institution, the U.S. has grown increasingly wary of the potential for the Chinese government to access user data from apps like TikTok.
Over the past few years, the U.S. has taken a series of actions targeting TikTok and other Chinese tech firms. In 2020, former President Trump issued executive orders seeking to ban TikTok and the WeChat app. The Biden administration later revoked those orders, opting instead for an agreement to address data security concerns.
The Committee on Foreign Investment in the United States (CFIUS), which reviews foreign acquisitions of U.S. businesses, has played a key role in the TikTok negotiations. A CFIUS review of ByteDance’s acquisition of Musical.ly led to the new data security agreement. While the details remain secret, the deal aims to ensure U.S. user data is protected.
Reactions and Analysis
The technology industry has had mixed reactions to the agreement between TikTok and the U.S. government. Some experts see it as a positive step towards ensuring data security, while others argue it does not go far enough. According to the Center for Strategic and International Studies, “The agreement appears designed to alleviate immediate concerns from lawmakers and the administration without fully resolving longstanding issues.”
Legal and policy experts have highlighted that the agreement avoids an outright ban of TikTok, which could have faced First Amendment challenges. As reported by Reuters, “Some experts said using the new legal tools to ban TikTok could still invite First Amendment challenges. ‘Realistically, I don’t see this tool allowing the Biden administration to ban TikTok,’ Justin Sherman, a fellow at the Atlantic Council, told Reuters.”
On social media, public response has been mixed. Some TikTok creators have expressed relief that a ban seems less likely, while others argue the agreement could still threaten their livelihoods if it restricts TikTok’s functionality. As reported in this video, creator Josh Richards said: “A full-on ban would be horrible. Partial ban, also pretty bad.” Overall, the agreement represents an uneasy compromise between data security concerns and maintaining TikTok’s popularity.
Unresolved Issues
While the agreement between TikTok and the U.S. government aims to address core data security concerns, several issues remain unresolved. Many privacy advocates argue the agreement does not go far enough to protect user data from access by ByteDance or the Chinese government (NY Times). For example, the agreement does not prevent ByteDance engineers in China from accessing TikTok’s source code or algorithms.
Critics also point out the agreement does little to address censorship and content moderation issues. There are ongoing accusations that TikTok suppresses content critical of China, though TikTok denies this (TikTok TOS). Questions remain about whether political censorship could increase if tensions escalate between the U.S. and China.
Looking ahead, there are still risks even if user data is stored in the U.S. Experts argue TikTok’s recommendation algorithm itself poses national security concerns by potentially pushing certain content. While the agreement is a step forward, it does not fully eliminate future risks of data misuse or censorship.
Broader Implications
The agreement between TikTok and the U.S. government could set an important precedent for how data and technology are regulated amid ongoing tensions between the U.S. and China. As reported, governments have expressed concerns that TikTok, owned by Chinese company ByteDance, may endanger sensitive user data. This agreement attempts to address those concerns through provisions to isolate U.S. user data. However, some analysts argue broad restrictions on TikTok or other foreign tech companies could have implications for free speech and the global internet.
The TikTok deal emerges from ongoing economic and geopolitical competition between the U.S. and China. How this agreement is implemented could impact future U.S.-China negotiations across trade, security, and technology. It also highlights the growing role of data and advanced technologies as points of leverage and vulnerability between states. As digital connectivity expands globally, data is increasingly recognized as a form of power and sovereignty. This agreement could influence how democratic countries regulate foreign tech firms and cooperate on shared digital challenges.
While this deal addresses specific concerns about TikTok, larger questions remain about data sovereignty, technology policy, and the U.S.-China relationship. How this precedent influences both U.S. and international approaches to emerging technologies and data security will have important implications in the years ahead.
Conclusion
In summary, the new TikTok agreement aims to address longstanding data privacy and security concerns from U.S. regulators related to the video app’s Chinese ownership. Key takeaways include TikTok’s commitments to store American user data within the U.S. using a third-party service, restrictions on employee access to data, and guarantees related to the Chinese government’s ability to access American user information. While critics argue the agreement doesn’t go far enough, it does represent meaningful progress in creating safeguards for TikTok’s millions of American users.
Going forward, it will be critical to monitor how faithfully TikTok abides by the terms of the agreement. Oversight from regulators and third-party auditors will play an important role. There may also be ongoing debate about whether TikTok should be required to separate itself entirely from its Chinese parent company ByteDance to alleviate data privacy concerns. TikTok is also still negotiating a potential deal with a U.S. buyer, so its ownership structure continues to face uncertainty.
Ultimately, the new TikTok agreement symbolizes the tensions between data security and an open internet that have become front and center as Chinese tech platforms expand globally. Whether the agreement becomes a model for how to enable international data flows while respecting national security interests remains to be seen. But it marks an important, if imperfect, effort to bridge some of the divides that currently exist.
