Time’s up for TikTok

Face­book’s big­gest ir­ri­tant can­not sur­vive in its cur­rent form

The Daily Telegraph - Business - - Front Page - James Tit­comb

Scroll through TikTok for a few min­utes, and the wildly pop­u­lar video app cer­tainly doesn’t feel like a threat to na­tional se­cu­rity. Its lip-synch­ing teenagers, cute pets and dance rou­tines are so out of step with warn­ings about the app be­ing a spy­ing de­vice for the com­mu­nist regime in China as to be al­most com­i­cal. But make no mis­take, time is run­ning out for TikTok. Its Beijing-based owner, the tech firm ByteDance, has done its best to ease con­cerns. It has hired Amer­i­can Kevin Mayer, a former Dis­ney ex­ec­u­tive to run TikTok.

It has started stor­ing user data on servers in the US and Sin­ga­pore, in­sist­ing it is in­ac­ces­si­ble to Beijing. And it has hired a pha­lanx of lob­by­ists to re­but claims it is in the ser­vices of Beijing.

But at best, all this does is de­lay the in­evitable. Huawei tried for years to of­fer com­pro­mises such as se­cu­rity in­spec­tions, li­cens­ing agree­ments and au­dits that would al­low it to op­er­ate in the West. In the end, it did not mat­ter. There was no get­ting around the key prob­lem with Huawei – that Chi­nese na­tional se­cu­rity laws com­pel any com­pany based there to hand over data if asked.

The same sit­u­a­tion, ul­ti­mately, dooms TikTok in its present state. So far, no gap­ing se­cu­rity or pri­vacy flaw has been dis­cov­ered in the app. It col­lects large amounts of user data, but not sub­stan­tially more so than US in­ter­net com­pa­nies like Face­book and YouTube.

This is ir­rel­e­vant. Any re­as­sur­ance or prom­ise TikTok can make is fa­tally un­der­mined by Chi­nese own­er­ship. It could de­nounce com­mu­nism, en­dorse Don­ald Trump, the US pres­i­dent, and change its logo to the Amer­i­can flag for all the good it would do.

Al­ready, many branches of the US gov­ern­ment have banned the app from em­ploy­ees’ phones and cor­po­ra­tions are com­ing un­der pres­sure to fol­low. In­dia has banned TikTok out­right.

The next phase of en­force­ment will be more heavy handed. Trump has al­ready said he is con­sid­er­ing a ban, an ac­tion that would most likely take the form of plac­ing the com­pany on a US black­list.

This would see Ap­ple and Google re­mov­ing TikTok from their re­spec­tive app stores and pre­vent­ing peo­ple from down­load­ing the app onto their phones.

Even this may not be enough to sat­isfy crit­ics. TikTok has al­ready been down­loaded more than 2bn times world­wide, so block­ing it from app stores merely bolts the prover­bial barn door. The more ex­treme so­lu­tion would be to block in­ter­net users from ac­cess­ing TikTok’s ser­vices al­to­gether by forc­ing in­ter­net providers to deny access to its servers. This would ef­fec­tively cre­ate an Amer­i­can ver­sion of China’s “Great Fire­wall”, which the Com­mu­nist Party has used for more than a decade to con­trol the web, ban­ning the likes of Face­book, Google, Wikipedia and any other ser­vice that re­fuses to com­ply with strict cen­sor­ship laws.

Although hawks might ar­gue that China’s ac­tions have set a prece­dent here – as In­dia did when im­ple­ment­ing a sweep­ing ban of Chi­nese apps last month – a Western democ­racy do­ing the same would be seen as over­step­ping the mark.

There are other rea­sons we should not want TikTok banned en­tirely. Right now, it is per­haps the great­est chal­lenge to Face­book’s dom­i­nance of so­cial me­dia. Mark Zucker­berg’s be­he­moth has suc­cess­fully neutered pre­vi­ous chal­lenges to his com­pany. Twit­ter and Snapchat have man­aged to re­main in­de­pen­dent, but do not qual­ify as se­ri­ous rivals.

TikTok ap­pears to be one of the few play­ers that keeps Zucker­berg awake at night, as demon­strated by Face­book’s re­peated at­tempt to launch copy­cat ver­sions of the app.

Af­ter In­dia’s TikTok ban, Face­book’s In­sta­gram sub­sidiary wasted no time in re­leas­ing an app called Reels in the coun­try. It is widely seen as a TikTok clone. If other coun­tries were to fol­low In­dia, it would just cre­ate more of a vac­uum for Zucker­berg’s com­pany to oc­cupy.

While we should want Face­book to have com­pe­ti­tion, this does noth­ing to change the na­tional se­cu­rity is­sues sur­round­ing TikTok. Con­cerns about for­eign spy­ing will al­ways trump those about do­mes­tic choice.

Per­haps both can be re­solved. TikTok is not en­tirely an in­ven­tion of ByteDance, but a de­scen­dant of Mu­si­cal.ly, a short-lived app that the Chi­nese com­pany ac­quired in 2017.

Cru­cially, the takeover did not seek ap­proval from Amer­ica’s com­mit­tee on for­eign in­vest­ment in the US (CFIUS), a gov­ern­ment agency that has the power to un­wind deals if they are deemed to be a threat to na­tional se­cu­rity.

If CFIUS were to force ByteDance to sell TikTok to a US bid­der, it could cre­ate an in­de­pen­dent do­mes­tic chal­lenger to Face­book that is big enough to avoid be­ing crushed by Zucker­berg’s steam­roller.

There are signs that ByteDance is plan­ning to get ahead of this like­li­hood. Re­ports emerged last week that the com­pany is in dis­cus­sions over a sale with its Amer­i­can in­vestors in­clud­ing the ven­ture cap­i­tal firms Se­quoia Cap­i­tal and Gen­eral At­lantic.

That would be a prefer­able so­lu­tion to a forced sale. Bet­ter still would be to float TikTok, which is big enough now not to need the pro­tec­tion of­fered by stay­ing pri­vate and is val­ued at up to $40bn (£31bn).

ByteDance, which is pre­par­ing for its own gi­ant list­ing, will be loath to give up its star as­set. But TikTok will not sur­vive in its cur­rent form.

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