TikTok is a video sharing social networking service owned by ByteDance, a Beijing-based internet technology company founded in 2012 (https://backlinko.com/tiktok-users). The TikTok app allows users to create and share 15 to 60 second videos on any topic. It was launched as Douyin in China in September 2016 and introduced to overseas markets as TikTok in 2017 (https://www.businessofapps.com/data/tik-tok-statistics/). TikTok has exploded in popularity since its launch. According to Sensor Tower, it has been downloaded over 2.7 billion times worldwide (https://wallaroomedia.com/blog/social-media/tiktok-statistics/). It is one of the most downloaded apps in the world and has become massively popular with Gen Z users in particular.
TikTok’s Chinese Ownership
TikTok is owned by the Chinese company ByteDance. According to Who Owns TikTok?, ByteDance is a “Chinese internet technology company owning several content platforms worldwide” including TikTok. ByteDance was founded in 2012 by Chinese entrepreneurs Zhang Yiming and Liang Rubo. While headquartered in Beijing, ByteDance has offices around the world. However, ultimate control and majority ownership lies with its Chinese founders. This Chinese ownership of TikTok has raised concerns, especially in Western countries like the US.
Data Privacy Concerns
One of the main concerns regarding TikTok is that the data collected from its users could potentially be accessed by the Chinese government. TikTok is owned by ByteDance, a Chinese company that moved its headquarters to Singapore in 2020. However, TikTok’s servers are still based in China (Source).
Because TikTok is owned by a Chinese company, there is worry that user data could be handed over to the Chinese government upon request under the country’s national security laws. This data includes things like location information, browsing history, draft videos, and messages (Source). Much of this data is collected from users that are underage.
Privacy experts warn that China could use TikTok user data to blackmail individuals, build intelligence profiles, and conduct corporate or government espionage (Source). These concerns have sparked debates globally about restricting TikTok.
Censorship Allegations
TikTok has faced accusations of censoring content deemed politically sensitive by the Chinese government. Critics argue TikTok suppresses posts related to controversial topics like the Hong Kong protests, Tiananmen Square, Tibetan independence, and the treatment of Uyghurs in Xinjiang.
In September 2019, The Guardian reported that TikTok instructed moderators to censor videos mentioning these topics in order to comply with Chinese laws. Internal documents revealed rules banning political speech and limiting livestreams showing “police, protests, or political slogans.”
TikTok claims it does not remove content based on sensitivities related to China. However, the platform’s opaque censorship policies remain a concern. Without transparency into how moderation decisions are made, some fear the Chinese government could leverage TikTok to advance its political agenda.
National Security Risk
Some US lawmakers and officials have raised concerns that TikTok poses a national security risk. In 2020, the Committee on Foreign Investment in the United States (CFIUS) issued a report finding that TikTok’s ownership by Chinese company ByteDance could enable the Chinese government to access US user data. Recently, congressmen Patrick McHenry and Tim Scott urged President Biden to take action on TikTok, warning that the app’s national security risk has only grown. Some officials believe TikTok’s data collection and algorithmic recommendations may further Chinese propaganda and influence operations.
India Bans TikTok
In June 2020, the Indian government banned TikTok along with 58 other Chinese apps over concerns of national security and data privacy. The bans came after border clashes between Indian and Chinese troops in the Himalayas left 20 Indian soldiers dead. According to India’s Ministry of Information Technology, the apps were “prejudicial to sovereignty and integrity of India, defence of India, security of state and public order.”
The specific concerns raised over TikTok were that the app was secretly accessing user data and sending it back to China. Given the apps Chinese ownership and origins, India feared the data could be used to surveil Indian citizens or influence public opinion. TikTok had over 200 million monthly active users in India at the time, meaning the ban cut off a major market for the platform.
TikTok denied the allegations of data sharing and said it stored Indian user data locally in Singapore. However, the Indian government maintained the ban over security concerns. The ban has remained in place since June 2020, despite TikTok’s pleas to lift restrictions.
US Considers Ban
In July 2020, President Donald Trump threatened to ban TikTok in the United States over concerns that the app’s Chinese ownership posed a national security risk. Trump signed executive orders to prohibit transactions with TikTok’s parent company ByteDance, citing concerns that user data could be passed to the Chinese government.
Trump and some US lawmakers alleged that TikTok censors content deemed politically sensitive by the Chinese Communist Party, such as protests in Hong Kong and China’s treatment of Uyghurs. They argued that the app’s popularity in the US enables the spread of pro-China propaganda and suppresses criticism of China.
On August 6, 2020, Trump issued an executive order banning any US transactions with ByteDance in 45 days if the company did not reach a deal to divest TikTok’s US operations [1]. This prompted Microsoft and later Oracle to make bids for TikTok’s US business.
Microsoft Bid
On August 2nd, 2020 Microsoft confirmed that it was in talks to acquire parts of TikTok, the popular short-form video app owned by Chinese company ByteDance (1). Microsoft was reportedly seeking to buy TikTok operations in the US, Canada, Australia and New Zealand in a deal structured as a purchase of these TikTok business assets. The potential deal was estimated to be worth between $10 billion and $30 billion (1).
Microsoft’s interest in acquiring parts of TikTok came after increased scrutiny of the app’s Chinese ownership. With TikTok owned by Beijing-based ByteDance, there were concerns around data privacy and censorship, as well as worries that TikTok posed a national security risk (2). The Trump administration had threatened to ban TikTok if it was not sold to an American company by September 15th.
Sources:
(1) https://www.businessinsider.com/microsoft-tiktok-bid-oracle-trump-bytedance-2020-9
(2) https://www.reuters.com/article/idUSL4N2FC22S/
Oracle Bid
Another U.S. tech company, Oracle, also emerged as a suitor for TikTok’s U.S. operations in August 2020. Oracle is led by Larry Ellison, a prominent supporter of President Trump. According to Bloomberg, Trump voiced his support for Oracle’s bid, which was seen as a boost for Ellison’s efforts.
However, Oracle’s bid also faced scrutiny over national security issues. According to Business Insider, Oracle’s proposal to be TikTok’s “trusted technology provider” rather than owner raised concerns that it may not fully resolve data security issues. Much like the Microsoft deal, Oracle’s bid would require approval from the Committee on Foreign Investment in the United States (CFIUS).
Conclusion
In summary, TikTok has faced mounting scrutiny over its Chinese ownership and allegations of censorship and data privacy violations. Countries like India and the US are concerned that TikTok poses a national security threat and have taken steps to ban or force a sale of TikTok’s US operations.
Microsoft and Oracle are currently bidding for TikTok’s US business, but it remains unclear if a deal will be reached. The future of TikTok hangs in the balance as governments apply more pressure and competitors circle. If a sale doesn’t happen, TikTok may face bans in major Western markets like the US and India.
However, TikTok is still hugely popular among younger users and influencers. If TikTok can resolve data security concerns and political pressure, it may still have a bright future ahead as a leading social media platform. But the company faces significant hurdles given rising geopolitical tensions between China and the West. How TikTok navigates its way through this crisis will determine if it becomes a truly global social media giant or fades from prominence.
