Saturday will mark a year since Donald Trump said he would ban the wildly popular and annoyingly addictive short-video app TikTok from millions of US smartphones, citing threats to users’ privacy and security posed by its Chinese ownership.
A week later, Trump signed an executive order directing the app’s Chinese owner, ByteDance, to either sell TikTok to an American business within 45 days or see it forcibly removed from app stores and blocked. The deadline was extended several times, and Oracle and Walmart emerged as the putative saviors for TikTok in a deal that was later shelved. At one point, Trump brazenly suggested any sale should include a cut for the US government itself.
A year on, nothing has changed and everything has changed. ByteDance still owns TikTok, which added 7 million new US users in the first four months of this year. Trump is gone, and the threat from the US government has receded—but the Chinese government now looms over the popular app.
“If I was ByteDance I wouldn’t be breaking out the champagne,” says James Lewis, senior vice president and director of the Strategic Technologies Program at the Center for Strategic and International Studies. “TikTok could be standing perfectly still, but the landscape is moving around them—mainly because of Chinese activity.”
China has taken an increasingly hard-line approach to regulating its tech companies and scrutinizing the data they own. After scuppering the IPO of Ant Financial, a spinoff of ecommerce giant Alibaba, last December, the government introduced new cybersecurity rules in April that put domestic tech companies on a tighter leash.
This month, the Chinese government blocked ride-hailing service Didi from signing up new users and ordered the app removed from Chinese app stores just days after the company’s IPO, which reportedly defied a recommendation that it be delayed for a cybersecurity audit. ByteDance has also reportedly shelved its own IPO due to similar government scrutiny.
In the US, President Biden in June withdrew Trump’s executive order seeking to ban TikTok as well as another Chinese-owned app, WeChat. Last week, TikTok and the administration agreed to drop litigation over Trump’s attempted ban. But Biden ordered the Commerce Department to launch an inquiry into foreign-owned apps, including TikTok.
Lewis believes that the Biden White House is just as uncomfortable about TikTok as its predecessor was. He says the administration may issue its own executive order that leads to a forced sale. “This administration is more hard-line on China than Trump, in part because they're organized,” he says. “It's not chaos.”
Trump’s moves against TikTok came amid mounting skepticism in the West of China’s economic growth and technological reach. Many European countries have sought to limit economic ties to China over the past several years, according to a July 2020 report from the Brookings Institution, a DC-based think tank.
The feeling goes both ways. Rui Ma, an analyst with Tech Buzz China who follows ByteDance closely, says there was considerable public pushback in China to the idea of ByteDance selling off TikTok. Some people feared US ownership would pose security risks to the parent company and to its Chinese customers’ data.
TikTok might seem an unlikely object of superpower competition. The app serves up an endless stream of remixed songs, memes, viral clips, and the odd celebrity cameo, algorithmically selected to appeal to your interests and tastes. Trump’s looming ban was met last year with shock and incredulity from TikTok-addicted teens; others noted the irony of shutting down a platform that prizes freedom of expression in the name of punishing China, where information is tightly controlled.
ByteDance hardly seems to be an agent of the Chinese government. The company has faced pressure from the government in recent years over racy or salacious content served up by its news app Jinri Toutiao (meaning “today’s headlines”). But TikTok’s ties to China remain a concern for the US government, especially as its reach and influence grows. TikTok’s US users increased to 73.7 million in April from 65.9 million at the end of 2020, according to eMarketer, an analyst firm. The app is a striking example of China’s high tech business savvy, outmaneuvering some of the world’s largest social media companies, like Facebook and Twitter, on their Silicon Valley home turf.
TikTok grew from ByteDance’s 2017 acquisition of the US lip-synching app Musical.ly. At Trump’s direction, the Committee on Foreign Investment in the United States conducted a retrospective review of the Musical.ly acquisition, concluding in August 2020 that it posed a threat to national security. CFIUS and the Commerce Department did not respond to requests for comment.
TikTok has rolled out new initiatives aimed at getting users to engage and use the platform in new ways. Last week this included a way for users to apply for jobs by recording “TikTok résumés” to send to select hiring companies. “TikTok has massive data on Americans,” Lewis says. “It has their faces, their voice, their IP. It has become a huge window into American society.”
Some serious questions linger over the app’s ownership and operations, as well as how much personal data it collects on US citizens and how its algorithms could perhaps be used to shape what American’s think.
“I think the Trump administration rightly identified privacy and security concerns,” says Ainikki Riikonen, a research assistant focused on technology at the Center for New American Security. “But then he created this whack-a-mole mess, ruling by executive order."
Under increased scrutiny from the Trump administration, TikTok made efforts last year to distance itself from Beijing. These include hiring the former Disney executive Kevin Mayer as US CEO, as well as COO of the parent company ByteDance, in May 2020. Meyer left the company just three months later, citing “the political environment” and the likelihood of TikTok being sold to a US company. TikTok’s CEO is now Shou Zi Chew, ByteDance’s CFO, who is based in Singapore. Last September, TikTok made a deal to make Oracle its “secure cloud provider,” an arrangement that the US company said would guarantee that no US customer data ended up being sent to China.
TikTok maintains that the US offering is walled off from ByteDance’s Chinese business. A spokeswoman for TikTok says the algorithms used to determine what videos users see, as well as those that automatically help catch prohibited content such as nudity or hate speech, are “developed separately” in the US and that user data is kept within the US.
Former TikTok engineers who spoke to WIRED on condition of anonymity say protections are in place to stop data being shared easily within the company. But they describe a company where management power rests in China and where engineering and product decisions come from the parent company.
An analysis of TikTok and its Chinese counterpart, Douyin, conducted by researchers at the University of Toronto’s Citizen Lab in March, found evidence that the apps share a common codebase. “Even if no non-Chinese user data is transferred to China, the Chinese government might be able to order changes to TikTok's source code to enable such transfer or other features they want,” says Pellaeon Lin, one of the researchers involved.
Kara Frederick, a research fellow in technology policy at the Heritage Foundation, a conservative think tank, says it’s difficult to see how ByteDance could satisfy US concerns over privacy and security. “Something that gets missed is that it’s not just leverage over the data, it’s leverage over people with access to the data,” Frederick says. “So it doesn’t just matter where it’s stored.”
Others believe that TikTok can find a way to reassure the US government and defy the technological decoupling that the US and China seem intent on. “User data flows can be audited,” says Ma of Tech Buzz China. “We're in the same spot as last year, in my opinion, and it's really just the company trying to show they are aboveboard.”