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After India, TikTok To Face US Fire

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Zhang Yiming, founder of the wildly popular but recently besieged TikTok, has done everything he could to localize the short video app in global markets to ease rising political pressures. 
But he appears to be increasingly boxed in, said a Chinese investor in the app’s parent company ByteDance. TikTok, the world’s fastest-growing social media app with more than 2 billion downloads worldwide, faces bans or threats of bans from countries around the world.
This comes amid allegations of violating user privacy. Its expanding popular influence has made the app a force that cannot be ignored by any government. In the U.S., TikTok has become part of the political debate. The November election will be a challenge for TikTok, the ByteDance investor said. 
“There is not much disagreement between the Democrats and Republicans on current sanctions against Chinese companies,” he said. “After ZTE and Huawei, TikTok will be the next target.”

TikTok has been under fire before. But make no mistake, this time it’s different—this time it’s worse. That has nothing to do with TikTok and everything to do with China, of course. If you want to build a strong technology brand in Western democracies, this is not a great time to be linked to Beijing. For TikTok, the result is the same, though: Headline calls urging users to delete the app immediately.

That was fully in evidence with TikTok’s defense against its ban in India last week. “I can confirm that the Chinese government has never made a request to us for the TikTok data of Indian users,” CEO Kevin Mayer assured the Indian government. “If we do receive such a request in the future,” he added, “we would not comply.” That data, TikTok says, is stored in Singapore anyway, beyond the reach of Beijing.

According to Chinese state-controlled media reports, TikTok owner ByteDance has invested more than $1 billion to build its vast Indian user base, and now faces losses of as much as $6 billion, as hundreds of millions of users are cut off. 

Initially, it seemed that the restrictions would simply halt new installs. TikTok saw more than 100 million downloads in May, double those in the U.S. But then it became clear that access for existing users would be restricted as well, severing the earnings of countless influencers and bitesize video stars across the country.

The ban in India has made headlines—the problems for TikTok, though, are much worse. 

This is likely just the start of a clampdown that has been months if not years in the making and which threatens to undermine the staggering success the platform has enjoyed, becoming one of the soaraway stars of the coronavirus lockdown.

The broader Indian ban was welcomed by U.S. Secretary of State Mike Pompeo, who applauded the country’s “clean app” approach and claimed such apps serve as an extension of China’s “surveillance state.”

 For TikTok, this will raise the spectre of the platform being targeted by the Trump administration in the same way as other Chinese tech giants—with devastating implications for its U.S. user base.

Let’s put this into perspective. India didn’t just ban TikTok, it banned 58 other apps, including major titles from other Chinese tech giants. 

But the commercial impact on TikTok was greater than the rest combined. Similarly, TikTok made headlines when a new Apple iOS 14 beta privacy feature caught the app secretly reading user clipboards. TikTok was not alone—many other well-known apps seemed to do the same. But none made headlines in the way TikTok had done.

To be a viral success story is double-edged—the bigger you are, the harder you fall. Quite literally. There has been a reported national security investigation into TikTok in the U.S., and there are reports that other countries are taking a look. 

The success this bitesize video sharing platform has enjoyed in the west is unique for a Chinese app of its kind. It genuinely competes for youth mindshare with YouTube and Instagram. Its growth has been quite extraordinary.

The serious criticisms of TikTok fall into two broad camps. First, that is has not done enough to protect the privacy and safety of its young audience. 

Reports and fines in the U.S., regulatory warnings in the U.K., have all come down hard on the privacy lapses in how the platform ensures that its viral appeal to kids worldwide doesn’t become an enabler for exploitation and abuse. This is fairly clear cut—and the platform has been working to remedy these issues. A new Transparency Center, as and when it’s available, will be part of this effort.

Second, we have security issues, which are much more complex. Again, though, TikTok is not alone. There has been a long-running clampdown on Chinese tech players with alleged links to Beijing. But it is TikTok that, alongside Huawei, stands out for the sheer attention it receives. The reason is very simple. Those are the two brands that have achieved the gravitational escape velocity to compete head to head with U.S. players for the same user eyeballs and advertising dollars.

( With additional inputs from Caixin and Forbes)

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