Donald Trump has stated that TikTok will be banned in the United States unless an American firm successfully buys TikTok’s American operations by the 15th of September 2020. The Chinese-owned app (called ByteDance in China) was declared a national security risk by officials in the White House and is suspected of harvesting the data of its users.
ByteDance is under a lot of pressure to sell its American operations after Donald Trump threatened to ban the app. This is the latest story in the crackdown on Chinese tech companies saga. In the past, Donald Trump has cited similar security concerns regarding other Chinese companies like Huawei whose phones aren’t in the US despite being the number one phone maker in the world.
Although this case is attracting all of the headlines, it is not the first time that US restrictions have been imposed on Chinese firms. There are a number of Chinese firms on economic blacklists, which stops these firms from being able to buy US technology without government approval. Some of the firms include:
- Qihoo 360, a cyber-security firm
- NetPosa Technologies, which makes video recording devices
- CloudMinds, a provider of internet-based tools to control robots
- iFlyTek, a provider of voice-recognition services
- Megvii and Sensetime, two facial-recognition tool providers
Experts state that TikToks data collection practices are not rare and when compared to other social media companies they are more restricted. In fact, security research Robert Baptiste analysed the data it collected and sent to its own server and concluded that “TikTok doesn’t have suspicious behaviour and is not exfiltrating unusual data. Getting data about the user device is quite common in the mobile world and we would obtain similar results with Facebook, Snapchat, Instagram and others.”
TikTok has already been banned, not once, but twice, in India which was their biggest market. But what makes this case especially unique is that other rival social media platforms have warned of the potential risks surrounding TikTok. With all of this noise Instagram has secretly released their rival TikTok product “Reel” and Snapchat, Byte, Likee and YouTube have all tried to create a rival to TikTok.
Microsoft has emerged as the front runner to acquire TikTok and this looks like a win-win situation for Microsoft. Firstly, if TikTok wants to operate it means that they will be forced to sell its US operations meaning that Microsoft could acquire TikTok at a discounted price. Additionally, TikTok may be forced to sell its operations in Canada, Australia and New Zealand; allowing Microsoft to set itself up as a competitor to YouTube and Facebook.
If all of the above sounds too good to be true, you’re correct. The China Daily described TikTok’s treatment as “theft” and said China “had plenty of ways to respond if the administration carries out its planned smash-and-grab”. Microsoft is one of the few tech giants to have a major presence in China and if it is seen to be benefitting from this “theft” China may retaliate by hurting Microsoft presence in their market.
We don’t know what to expect over the forty days or so; TikTok could cease to exist, go through an acquisition or operate the way it has done till now. However, it’s clear to see that the Trumps administrations dealing with the Chinese tech firm will lead to an increase in Sino-American tensions.