TikTok is one of the most popular video-sharing apps in the U.S. right now, especially amongst teenagers and young adults TikTok is an app which allows users to create and share short, fun video content that generally contains a musical component. Many of these Tiktok trends and videos have gone viral and increased the app’s popularity amongst a variety of users. However, TikTok’s ownership and operation makes things complicated in the U.S. ByteDance, a China-based company, is the parent company of TikTok and in 2017, it acquired Musical.ly, an American social media company, for one billion dollars. It was after this acquisition that TikTok gained popularity in the U.S. but led to complex challenges within China and U.S. laws.

 

TikTok’s Possible National Security Risks

In the past few years, the Committee on Foreign Investment in the United States (CFIUS) has increase its scrutiny of China’s investments to stop any potential risks regarding sensitive U.S. data. CFIUS recently opened an investigation into TikTok regarding possible national security risks. TikTok’s relationship with Chinese investments has even prompted a bi-partisan investigation request from Congress. Since TikTok did not include CFIUS in the Musical.ly deal, the Committee has grounds to investigate the deal, specifically looking for how China’s influence and practices could affect national security. One major aspect of the Committee investigation could include TikTok’s potential failure to protect consumer data by not implementing strong enough collection methods or storage practices that satisfy U.S. standards. TikTok operates in the U.S. and claims that it stores all U.S. data within the country, but ByteDance is subject to China’s laws. Because the parent company resides in a non-U.S. jurisdiction, many security and regulators in the U.S. government are concerned that the data is not as safe as the company claims and instead, could fall victim to China’s laws, procurement, influence, and censorship.

TikTok Around Censorship

In particular, China’s censorship laws concerns many American leaders especially considering the implications on free speech. For example, TikTok coincidentally shares very minimal content about the recent Hong Kong protests supporting democracy. Additionally, TikTok recently suspended a teenager from the app who shared content speaking out negatively about China’s detention and surveillance of Uighur Muslims, a minority ethnic group in mainland China. TikTok apologized to the teenage user, but denied that this was the reason for her suspension. Ongoing examples of suspected censorship increase American legal concerns over the app’s usage.

Status of TikTok’s Data Privacy Investigation

CFIUS investigations are confidential and the Committee has not divulged any specific concerns about the deal. However, we do know that TikTok seems willing to cooperate and is determined to prove the company’s independent operations from ByteDance and remove itself from China’s influence. Several possible outcomes could occur following the investigation including one in which TikTok will reach a mitigation agreement with the U.S. and could protect their investment in Musical.ly while also continuing U.S. operations. A mitigation agreement is already in the talking phase, however, specific details have not be made publically available. Regardless, any agreement would include stronger data handling practices to ensure that the app does not compromise national security.

Another possible outcome is that the CFIUS will force TikTok to sever ties with Musical.ly, which would essentially make the app nonexistent in the U.S. An action like severance would signal to other foreign social media companies that the U.S. government will look into potential national security and censorship risks closely in order to protect U.S. consumer data. The recent action regarding suspending the teenage user that posted negative content about China could push CFIUS to choose this route. However, only time will tell and Americans should stand by to see the status of TikTok’s fate. If you found this blog informative, you may enjoy reading Agency Continues Crack Down on Privacy Violations or the Epiq Angle Blog.