The Tiktok Ban

Why Tiktok is Banned by Different Countries

Something About the Founder Zhang Yiming

Zhang Yiming was born April 1982 in China’s Fujian province. His mother, a nurse, and father the owner of an electronics factory, were unusual in that they gave their son the freedom to explore his interests - namely, technology. This, little did they know, would put Zhang on the path to become China’s Mark Zuckerberg. In 2001, he left to study engineering near Beijing, which he chose for the “pretty girls and winter snow”. While Zuckerberg, two years younger and six thousand miles away, entered Harvard, met his wife, and started Facebook, Zhang fixed computers, met his wife, and built his startup. After several failed ventures, in 2012 he founded a new company called ByteDance from his small Beijing apartment. And although his path was rockier than Zuckerberg’s, it was no less abrupt or explosive. By the end of its first year, Facebook had registered one million users. ByteDance’s first breakthrough - a Chinese video-sharing app - had 100 million. 

 From China to the  Global World

Then, having conquered the Chinese market, the company turned global, buying its competitor and the spiritual successor to Vine, called in 2017 - later rebranded as ‘TikTok’ outside of China. The app - now ubiquitous among young people everywhere - makes it almost too easy to shoot, edit, and share videos, usually in the form of dancing, comedy skits, and stream-of-consciousness monologues. The real genius of TikTok, however, and what sets it apart from Snapchat, Instagram, and Facebook, is the part you don’t see - the much-alluded-to, guarded-like-a-state-secret algorithm. Rather than by following friends, TikTok learns, on its own, exactly what you like as you mindlessly scroll through its endless feed of videos. You don’t need to follow, like, or search for it to understand your preferences. And the more you scroll, the better it gets at reading your mind. This is also what makes it so addicting - unlike Twitter or Instagram where you can stay up-to-date on your timeline, TikTok will keep you entertained for however many hours you allow it. Knowing this, its 2 billion downloads in its only four years of existence and ByteDance’s position as the most valuable private company in the world are impressive but not altogether surprising. Equally so Zhang’s personal wealth of around $16 billion - making him the tenth richest person in China and 61st in the world. 

Today, at 38 years old, he’s still described as the nerdy, awkward, uncharismatic, but undeniably resourceful mirror-image of Zuckerberg. In his rare public appearances, he often comes across as robotic and overly-rational. There is, however, one obvious major difference between these two internet titans: Zhang built his company in China. While Facebook had to first allow a foreign government to interfere in a presidential election before Congress would even begin considering regulation, TikTok faced legal constraints from the very beginning. What’s remarkable about its success is that it’s neither a clone of a foreign-made app, nor, like Huawei, aided financially by the Chinese government. Just as impressive, it resisted acquisition by Alibaba, Tencent, or any other deep-pocketed tech giant. By not doing so, TikTok arguably became China’s first true consumer technology export success story - and all on its own - overcoming its limitations despite being based in China, not because of it. Prevailing in this challenging environment affords Zhang even greater praise, but also subjects his empire to a potential collapse just as instantaneous as it was built. It took only a few short years for TikTok to surpass, in downloads, some of the biggest companies in the world. But it may take only a few emphatic pen strokes for all that progress to be lost. On June 29th, 2020, the second-most populous country in the world and by far TikTok’s biggest market, the Republic of India, banned it, along with 60 other Chinese mobile apps accused of stealing and sending user data outside of the country. 

Ironically, this came as a surprise to a nation whose Great Firewall has methodically banned, censored, and regulated foreign media for decades. With this one swift move, millions of viewers and creators, some of whom depended on the app for a significant portion of their living, were simply out of luck. Just as significant, was the potential domino effect this decision could have. TikTok’s largest source of downloads this year, in order, are India, Brazil, and the U.S. - the latter of which is a prime contender for the next domino to fall. This, in fact, undersells the significance of the U.S. market. When divided by platform, it’s revealed as a major source of iPhone users - who spend, on average, two and a half times more on apps. What this means is that while Americans account for only 10% of TikTok’s overall user base, they make up an incredible 56% of its revenue. 

The Tiktok Ban

A ban by the U.S. would not simply limit its growth but require a fundamental restructuring of its business - to say nothing of the potential for other countries to follow its lead. What, then, is the likelihood of such a ban? And would it be justified? Even before any real arguments are made, fear of TikTok may, to some, seem reasonable if only because such fear is so widespread, and came about so suddenly. The list of skeptics, even prior to India’s ban, is long. After a regional office was established in Sydney, Australian authorities began investigating the app on suspicion of foreign interference and violations of data privacy. 

Both the U.S. Democratic and Republican national committees have asked staffers not to install the app or to buy a second phone when using it for campaign work. As have the U.S. Department of State, Homeland Security, and military. Even private companies have followed suit - including the bank Wells Fargo and Amazon, although the latter retracted its statement shortly afterward. Tensions reached a new high when the Trump administration strongly alluded to a ban at the same time as the president’s re-election campaign bought Facebook ads saying “TikTok is spying on you” and have been “caught red-handed”. Should this decision be made, several levers are at its disposal. First, The Committee on Foreign Investment, whose job is to monitor national security concerns, could force ByteDance to sell-off its American operations to an approved buyer. Alternatively, the Trump administration could invoke the International Emergency Economic Powers Act, or place TikTok on the Entity List, which would force its removal from the app stores. As in the case of Huawei’s ban almost exactly one year ago, skeptics are quick to point out the preferential treatment it would give to American competitors. As if on cue, Instagram is expected to launch its TikTok competitor, called Reels, in the U.S. this August. Snapchat, Byte, Likee, and YouTube have also tried replicating the concept. Even Netflix listed the app as a competitor in its latest letter to shareholders - a sign of just how time-consuming it’s become. Also like Huawei, the claims made against it are sometimes vague, hard to disprove, and yet also extremely consequential. 

Several independent observers allege the app censors content in accordance with Mainland Chinese guidelines. For example, in the absence of videos covering the pro-democracy protests in Hong Kong. The company has publicly admitted to limiting the reach of disabled, queer, and overweight creators, which it claims was for their own protection against bullying, before changing policies. A ‘bug’, it says, was responsible for showing no views on videos related to Black Lives Matter. On one hand, the nebulousness of the algorithm allows anyone to claim censorship without strong supporting evidence. On the other, this provides cover for TikTok in that it can always remind them that the algorithm is based on their preferences and that any perceived manipulation is only a reflection of their behavior. More concretely, the company has paid $5 million and $150,000, respectively, to U.S. and Korean authorities for collecting the personal information of children without parental consent. However, unlike Huawei, the controversy surrounds not critical communications infrastructure but a lip-syncing, dancing app for teens. A TikTok ban raises far more eyebrows because the idea of such an app presenting a threat to national security is a much less intuitive argument. This, critics would say, is precisely what makes it such an effective tool - nobody suspects it. A preview of what it could become if left unregulated is the version of the app in China, which is home to a much older audience, is used by police to spread information, and has advanced face recognition. Such was the backdrop of skepticism against which more recent discoveries were made. 

When the beta of the next version of iOS was released this summer, a new privacy feature was included which alerts users when an app copies their clipboard. It didn’t take long before videos like this one emerged, showing TikTok almost constantly reading whatever is copied. More careful digging also found the app recording a users’ screen size, as well as other information about their device. These findings are a trap. Well-intentioned as they may be, they only distract from other, far more serious concerns. Experts agree that TikTok’s data collection practices are not only not rare, but actually quite restrained when compared with other ad-based services like Facebook. Reddit and LinkedIn, for instance, were also caught reading the clipboard, which they say is used to prevent spam. ByteDance has explicitly repeated that it does not employ moderators in China and that U.S. data is stored in the U.S., with backups in Singapore. By narrowly focusing on the technical details, the issue is reframed as one of privacy, which could just as easily be applied to any application, including and especially those based in America. It’s no coincidence, rather, that those most familiar with Chinese politics are also the app’s most vocal critics. TikTok is not just another social network because China is not just another country. This is also not to say that the company doesn’t mean what it says. One of the most unfortunate byproducts of its place of birth is that TikTok may be dangerous through no fault of its own. China’s 2017 National Intelligence Law compels all companies with information stored within its borders to hand-over data at its request - without the constraints of courts or warrants. If this sounds only theoretical, ByteDance’s first app was shut down in 2018 by the National Radio and Television Administration, after which Zhang apologized for his poor adherence to socialist core values.In practice, this control extends much further than its borders. 

A company need not be based or even physically present, at all, in China for it to be beholden financially. It does not matter that ByteDance is incorporated in the Cayman Islands, or that Zoom is headquartered in California - or that the NBA is, in every sense of the word, American - for their checks are signed elsewhere. None of this is particularly new. China has effectively operated a separate internet for years, which foreign companies have gained access to by self-censoring. What has changed is that, until recently this has been relatively easy to deny or ignore. Now, at a time of record bipartisanship in favor of a tougher response to China, it is no longer possible to feign ignorance. Whereas before appeasing China was the common-sense profit-maximizing business tactic to gain access to its 1.4 billion users with minimal casualties elsewhere, now there’s a tradeoff. And as companies are forced to confront this reality, they will inevitably decide on one of three general approaches: The first group will rip-off the bandaid as quickly as possible. They’ll cut their losses by leaving the Chinese market entirely and spending massively on PR against their competitors who don’t, while facing backlash from investors. 

A second group will do just the opposite. These, mostly Chinese-based companies will see international expansion as more liability than its worth and leave the non-Chinese market. Notably, this does not constrain them to the mainland, but would likely include developing markets which can’t afford to be scrupulous when offered investment. Finally, some especially international companies will see either option as too high a cost to bear and make the highest-reward, yet highest-risk gamble - to juggle both. These firms will split in two, and each division will try its hardest to distance itself from the other. If they fail, pressure will grow until enough value is lost that a deal will be made - and one or both divisions will be sold to a disinterested investor. TikTok is a prime example of the third strategy. In the last several months alone, it has hired a new American, ex-Disney CEO, announced its plans to add another 10,000 U.S. jobs in the next three years, doubled its lobbying budget, and, after the National Security Law was promulgated in Hong Kong, left the Special Administrative Region entirely. However, with an election less than 100 days away, it seems unlikely these moves will be nearly drastic enough. Even a majority sale to a U.S. investor may not assuage fears during a time of intense scrutiny towards China and a presidency at stake. Such is the predicament: it’s impossible to divorce any action from these political circumstances. And yet, that doesn’t automatically disqualify arguments in favor of a ban. 

The Tiktok Ban

It is rare but not the least bit contradictory to admit that: It is politically popular to attack companies for their ties to the PRC, and would still be whether or not such fears were founded; AND TikTok poses a very real potential threat to the interests of the U.S. and other countries, simply because of its ties to China; AND There is a deeply troubling, growing tendency to associate anything broadly labeled ‘Chinese’ as untrustworthy. To ban TikTok would create a kind of Great American Firewall - against the will of American users, and yet, not doing so would subject the country to greater risk. There is, however, one neutral path forward: To pass regulation governing where data can be stored, requiring disclosure of the algorithm, local ownership, and creating mechanisms for auditing and enforcement. Doing so, although seen as less politically ‘strong’, would subject all companies - foreign and otherwise - to the same fair standards. TikTok would remain, giving American companies greater competition and incentive to innovate, companies like Facebook would be forced to respect their users’ privacy, and all without provoking backlash for targeting a specific group of people. 

This is a long-term solution for a long-term problem. Because although TikTok was one of the first Chinese apps to go global, it certainly won’t be the last. There will be another Huawei, another Zoom, and another TikTok, and how the world responds now will set the tone of what’s to come. TikTok is the product of one man’s intense interest in technology and curiosity to learn more. Its rise proves that the next big idea won’t necessarily come from Facebook, Google, or Apple - it could come from you.

Source: PolyMatter 

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