How Much Time Does TikTok Have Left to Win Over Fickle US?

Updated: 8th August 2020

Time is running out for TikTok now as President Trump signed an executive order banning U.S. citizens from doing business with TikTok. The ban will begin 45 days from now and has sparked worries of a potential “New Cold War” as the worlds two largest economies go head to head, although China’s Foreign Minister was quick to reject these claims as tensions rise. Microsoft, who were planning a takeover of TikToks operations in the US, Canada, Australia and New Zealand have yet to make a statement. But the new executive orders appear to make the, previously self imposed, deadline of 15th September now look like an ultimatum issued by the government; Get this deal done by the 15th or there will be no deal. Let us look at how the relationship has deteriorated between a social media platform enjoyed by millions of U.S. citizens in a time of emotional turmoil, and a U.S. government growing increasingly more nervous of Chinese owned companies.

TikTok has been growing at an almost unprecedented rate over the past 3 years. Its revenue increased by 129% between 2018 and 2019, as total downloads of the app increased to 2billion. The app is free to download and to use, and revenue is coming primarily from advertising.

Like any social media giant, there is the potential for data security breaches, like Facebook in 2018. It seems that when a company is US-owned, a slap on the wrist and a promise to not do it again is usually deemed adequate for data breaches, although they seldom learn their lesson.

However, now that we have a huge, Chinese-owned social media platform linked with data breaches, it is “suddenly” more serious, therefore the punishment must be more severe.

Donald Trump announced recently that he plans to ban TikTok in the US. He cites risk to national security from the data collection and potential exploitation of US citizens and security members. This, on a platform primarily focused on 16-24-year-olds, who amount to only 41% of the total membership.

The US government may also be concerned that this Chinese Owned app will try to influence upcoming elections, they have already accused both Twitter and Snapchat of meddling in elections. Just recently one of Donald Trump’s rallies was sabotaged by a syndicate of teenagers and K-Pop fans who claimed they used the app to run interference in the sale of tickets.

A major worry is that the owners of the app, ByteDance, have on previous occasions bent the knee to the government-controlled regime in China. This is a worrying thought as the app could potentially hold the data of 2 billion people worldwide – almost 30% of the global population.

There is a potential danger of government espionage, something that the Chinese government has been implicated with recently with the Huawei scandal.


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So, what can TikTok do in order to waylay any concerns? They have already hired ex Disney Executive, American Kevin Mayer, as the new CEO as well as other Americans as the new Chief Information Security Officer and Head of Security.

On top of this, they are increasing the amount they spend on Federal Lobbying. In the 2nd quarter of this year alone they spent $500,000 an increase on the previous record from Quarter 1 of $300,000.  These are both temporary fixes to buy the company time, they will not be enough as a permanent solution.

There has also been the idea floated of selling a majority stake in the company to American investors, however, this will just bolster the Chinese tech sector even more, by providing extra income to a country already linked with multiple cyber-hacks conducted on US soil, most recently with relation to Covid-19 research.

Microsoft has recently shown interest in buying the Chinese Owned TikTok as a solution to the security worries. In the acquisition, Microsoft would take over the app in the US, Canada, Australia, and New Zealand. Microsoft has set a deadline for discussions on September 15th.

Despite Microsoft intending to repatriate all US citizen data and delete it from Chinese servers, President Trump is still wary of the deal, insisting still, as recently as Friday, that he plans to ban the app. His concerns still lie with the handling of US citizens’ data by the Chinese company and has also stated “We are not an M&A country”.

Banning, Vetoing, Regulating within current policy red tape, are all methods that have been used to control social media companies by different governments all over the world.

Up until now, they have been unsuccessful, citizens all around the world are still having their data breached and the companies leaking it are suffering no serious backlash, neither financial nor regulatory.

What the US government has the rare chance to do here is to shape a new regulatory model through policy, that can later be applied to any US-owned social media giants. TikTok is looking for opportunities to retain the US market so rather than banning them why don’t the US government use them as a guinea pig?

In the picture: How the tech giants make most of their revenues. Photo Credit: Unsplash

If the main concern with this app is data security, why doesn’t the US government require TikTok to place their data handling under constant monitoring, to ensure that all the data handling processes are transparent and there are no grey areas?

TikTok runs an algorithm that links its users with content relevant to the individual so some steps that could be taken to make the app safer could be: requiring the app to make this algorithm open source to eliminate any worry that the data of its members are being maltreated; working with TikTok to develop strict and clear guidelines on what the data provided to the app can be used for and how long it can be retained.

This would increase consumer confidence in TikTok, bolstering their brand, and would lead other social media platforms to address their lack of transparency.

TikTok has already started a shift towards more transparency themselves: they have released transparency reports and have announced they will be inviting independent auditors to investigate its content moderation methods.

So instead of banning an app that has provided free entertainment for billions throughout a period of global struggle, why don’t we instead use this opportunity to increase the safety and trust in a social media sector that is sorely lacking in both at the moment?

In the cover picture: TikTok on a smartphone. Photo Credit: Pexels


Editor’s Note: The opinions expressed here by Impakter.com contributors are their own, not those of  Impakter.com

About the Author /

James Bushell is a Green Finance Intern at Impakter. He has spent the last year working for a MNC and will now return to Newcastle University to finish the final year of his Bachelor Of Science Degree in Economics.

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