It has been an eventful few months for TikTok: The social media platform recently won an injunction against a nationwide ban while it negotiates a deal with Oracle and Walmart to satisfy President Trump’s executive orders demanding a sale to a U.S. company. With the November deadline for a deal upcoming, the shifting contours of the transaction and concerns over the app’s security will have important ramifications for future technology policy.
The TikTok app has consistently topped worldwide download charts and recently celebrated the best quarter of downloads in app history. Yet this very popularity fueled concerns about data security and potential foreign espionage from China, where TikTok’s current parent company ByteDance is located. Though some TikTok users have speculated that the executive orders have been in retaliation to the platform’s role in organizing opposition to Trump’s reelection campaign, the app has been under national security review since 2019 due to its rising influence in the U.S., which suggests several overlapping motivations.
Other social media platforms have benefitted from the pandemonium surrounding TikTok’s current legal challenges, lessening the focus on their own products and services and attracting TikTok users. But the perceived political motivation to ban TikTok based on its Chinese origins sets a damaging precedent for other social media platforms balancing global ambitions with the U.S.’s broader handling of foreign relations.
Ties to China
Prior to issuing his executive order, Trump stated that he did not mind if “a very American company buys [TikTok.]” His sentiments were rooted in the administration’s growing distrust of Chinese technology companies. TikTok had previously attempted to allay the president’s concerns by storing Americans’ data on U.S. soil, hiring an American CEO, and employing lobbyists in Washington. Further, TikTok’s founder chose to create separate apps for the Chinese and global markets so that users around the world could avoid censorship requirements from the Chinese Communist Party. Still, efforts to assure the U.S. government that TikTok would not give data to the Chinese government have not been sufficient enough to quell concerns over Chinese influence and interference through the app.
Despite Trump’s initial demand that TikTok be acquired by an American company, the current deal proposal still allows ByteDance an 80% ownership stake in the newly established entity, TikTok Global, with 20% ownership from potential buyers Oracle and Walmart. It also remains unclear if such a proposal will be enough to eliminate other lingering concerns about the social media giant. Several lawmakers, including Senator Josh Hawley (R-MO,) criticized prior deals for not sufficiently severing ties with China. Trump himself has expressed similar sentiment in the past by vowing not to sign off if ByteDance maintains any organizational control. For now, American companies appear likely to acquire a minority of the social media giant with Trump’s “blessing” in spite of the majority control left to a company which has previously censored anti-China content on TikTok.
Reflected in both the president’s executive orders and his business guidance is the absence of coherent policy around Chinese technology, leaving TikTok as a precedent for future actions. Ongoing negotiations between TikTok and other companies signal a need for a comprehensive strategy for dealing with Chinese-based technology firms operating in the U.S. In March, similar scrutiny lead to the sale of the gay dating app Grindr after the Committee on Foreign Investment in the United States (CFIUS) determined that Chinese ownership of the app was a national security risk, though the Committee did not publicly share the evidence underlying that decision. Comparatively, the U.S. government has raised few concerns about data protection on the popular Swedish-based music app Spotify, despite major privacy concerns arising in Sweden. As questions of Chinese-owned tech companies continue to emerge, the U.S. government needs much clearer policies going forward to avoid making decisions an ad hoc manner.
By many accounts, TikTok’s power comes from its algorithm, which tailors an infinite feed of videos to each individual user’s preferences. As a result, the average TikTok user spends more time on the platform than its competitors. Recent trade restrictions by China have highlighted the value that the country places on the development of powerful algorithms.
Artificial intelligence can be a double-edged sword for social media, providing potential for increased engagement while creating echo chambers, bias, and manipulation. In light of these concerns, TikTok pledged to share their algorithm with external experts, a move that came days before the House Antitrust Hearing confronted Big Tech CEOs for their lack of transparency. In a blog post announcing this decision, former CEO Kevin Mayer called on other social media companies to do the same, emphasizing TikTok’s commitment to accountability. Mayer vowed to use TikTok’s time in the spotlight to “drive deeper conversations around algorithms, transparency, and content moderation, and to develop stricter rules of the road.”
TikTok’s openness may set a new benchmark for other social media companies, challenging them to be more transparent about their algorithms or risk losing trust. Though experts have debated the degree to which algorithms should be made transparent, research from the Stanford Department of Communication found that users trust algorithms more when presented with at least some information on how they work. These factors point to a need for algorithmic transparency, and the urgency of policy to enforce it.
When asked about a potential Microsoft acquisition, co-founder Bill Gates described “being big in the social media business” as “a poison chalice” due to questions of encryption and privacy. Similarly, implicit in concerns that China may have access to TikTok users’ data are questions about data security and privacy. TikTok has previously faced criticism—and a lawsuit—for failing to protect the data privacy of minors, resulting in heightened privacy measures that they have only partially implemented.
Though, as a viral TikTok video pointed out, Facebook currently tracks more user data than TikTok, despite the latter engaging in concerning several data acquisition tactics. Since the ban was announced, major employers such as Wells Fargo and the federal government, and the Biden campaign have prohibited their staff from using the app due to security concerns. If ByteDance retains any part of U.S. operations, they could still be required to send data to Chinese companies under the country’s national security law. In the past, critics have also accused Oracle of selling personal user data, which suggests a need for greater privacy regulation for all companies in the United States, regardless of national origin.
Vanessa Pappas, TikTok’s new global head, has said her primary focus will be the app’s creators and users. If that is the case, she must first address the security of their data and institute appropriate privacy mechanisms.
TikTok exemplifies the necessity for comprehensive policies regarding foreign tech companies. While the fate of the imminent deal remains ambiguous, the tech world will be watching to determine if the company’s partnership with Oracle and Walmart can ameliorate the concerns that prompted calls for its removal from app stores. Reflexive condemnation of Chinese-based technology companies without a systematic policy basis is likely to prove ineffective and confusing in the long run. The current policy ambiguity misses an opportunity to pursue greater transparency and accountability from all technology companies.
No matter the ultimate outcome, TikTok has left an indelible mark on the social media industry. The questions raised by recent action are not new and illuminate gaps in policy which concern the future of the entire tech sector.
Facebook is a general, unrestricted donor to the Brookings Institution. The findings, interpretations, and conclusions posted in this piece are solely those of the author and not influenced by any donation.