Walmart and Oracle's Bid to Acquire TikTok is Dead. Now What?
TikTok, the short-form video service owned by China's ByteDance, continues to face an uncertain future. In mid-2020, the Trump administration cited national security concerns related to data privacy and threatened to ban TikTok, forcing the company to find a buyer. Oracle(NYSE:ORCL) and Walmart(NYSE:WMT) stepped forward with bids to own partial stakes in TikTok Global, which would have housed the company's U.S. operations. The tech titans have now reportedly shelved the deal as the Biden administration conducts its own wide-ranging review of the security risks related to the China-based company's data collection.
On this clip from Motley Fool Liverecorded onFeb. 10, "The Wrap" host Jason Hall, Fool analyst Nick Sciple, and Fool.com contributor Danny Vena discuss the implications and what happens from here.
Jason Hall: So the Biden administration has formally shelved the pending deal for TikTok. First of all, I didn't know the deal was even still pending. I thought everybody just walked away. This is the Oracle/Walmart deal. They were going to acquire a 20% stake in TikTok. Oracle was going to own 12.5% and become TikTok's cloud provider. Walmart was going to take 7.5% stake. Doug McMillon, that's Walmart's CEO, was going to serve on the Board for the new company that was going to be created. There should be five people on the board so Walmart would have one of those seats. Here's my question. What happens next with TikTok as a potential investments for US investors?
Nick Sciple: I don't think it's happening, Jason. I think if it's the hot take section, my hot take is I just don't think it's happening. There was speculation that maybe this was a Trump administration thing. There's been tension between that administration in China. The fact that we have a new administration in place who seems to be committed in a similar way to at least slowing down this deal, if not totally pushing this deal off to where it's not going to take place. If you look at relations between the U.S. and China when it comes to listing standards, accounting, any of those things that I don't think we're headed toward a more conciliatory posture.
If you don't think we're heading to a more friendly relations, I don't think it's more likely this company is going to come public. My hot take would be that U.S. investors aren't going to get a shot at it. Unless of course there is some other already public Chinese company like Tencent(OTC:TCEHY) or Alibaba(NYSE:BABA) or something like that, that acquires TikTok. But I don't think public investors in the U.S. are going to get a good shot at TikTok
Jason Hall: Yeah, there's obviously not any political will for the Chinese government to let this great asset to become just another American social media company. Danny, I know when you shared your link in the chat here in f for folks to check out, you wrote something about this earlier today. What's your take?
Danny Vena: I'm leaning a little bit toward Nick's opinion here. I think a lot of it is going to depend on how U.S. regulators under the Biden administration look at the big picture and that's what they're going for. They're going to take a more holistic approach to this, and once they look at it, make a decision, I think that if the Biden administration is more easy-going on this and maybe less of like a bulldog with it between their teeth, like the Trump administration was, yeah, I think there's a possibility.
But generally speaking, even if that were to come to fruition on the U.S. side of the house, Chinese regulators threw out a rule, not too long after the deal was initially announced that said that they were not going to allow artificial intelligence (AI) algorithms that were used in Chinese companies outside of the country. Which means that's what TikTok uses to recommend the videos to users. So I think there's still going to be stumbling blocks, even if the Biden administration is a little bit more easygoing on China than the Trump administration was. So it's looking doubtful.
Jason Hall: Yeah, my take on this whole thing is I think the Biden administration, if you want to think about this from a broader investing implications perspective, which is what we want to try to do is I think they're taking a more of a macro approach and less of a micro approach. I don't think this is what they're doing, is just about TikTok. I think it's about data sharing broadly, American citizen's data, that potentially getting into the Chinese government's hands in a very broad way and TikTok is just the poster child of this right now. Because it is so hugely popular and because it's a Chinese-based company.
Even though the company says American user data has never lived inside of China, it doesn't mean that a Chinese official can't walk into TikTok's office and say, "Get the data and give it to us" and TikTok and ByteDance not be legally required to in China because they are, that's Chinese law.
So I think the Biden administration is just being a little more methodical, and the implications could be greater. It could have a bigger impact on Chinese companies that do business with Americans in a broader way. So I don't know. I think the upshot here is and I don't know if you guys want to any take here but I think so far it's whatever for Walmart. They've just grown their partnership. They have a website right now [laughs] you could go to that talks about what they're doing and they're trying to leverage TikTok as a platform for their brands. I mean these kids might have been greased a little more to do more like product placement and that kind of stuff. But I think if there's a loser here, it's probably Oracle, right?
Nick Sciple: Right. I mean, what's Oracle going to do to change the narrative with their cloud, offering you've seen. I guess [Alphabet's] Google has been in third place for the longest time, behind Amazon and Microsoft. Google has got some really hot deals coming in. After they sign there deal with Ford last week. They're signing some really a big deals. You're not really hearing any news around Oracle other than this TikTok deal, I'm not familiar with others and maybe it could just be lack of knowledge, but they just don't seem to have a ton of positive news around them and this isn't good news either.
Jason Hall: Yeah, I think so. Danny, anything to add?
Danny Vena: No. I never thought that Oracle-TikTok would make a good match anyway.
Jason Hall: Yeah, apparently nobody on the Earth does except for the [laughs] people at Oracle.
Danny Vena: The stodgy old man and the hot young thing.
Jason Hall: There you go.
Trump agrees to TikTok deal with Oracle and Walmart, allowing app’s U.S. operations to continue
President Donald Trump said Saturday he has approved a deal in principle in which Oracle and Walmart will partner with the viral video-sharing app TikTok in the U.S., allowing the popular app to avoid a shutdown.
"I have given the deal my blessing — if they get it done that's great, if they don't that's okay too," Trump told reporters on the White House South Lawn before departing for North Carolina. "I approved the deal in concept."
The U.S. Department of Commerce announced it would delay the prohibition of U.S. transactions with TikTok until next Sunday.
Shortly after Trump's comments, Oracle announced it was chosen as TikTok's secure cloud provider and will become a minority investor with a 12.5% stake. TikTok confirmed Oracle's role and said it was working with Walmart on a commercial partnership.
Walmart said it has tentatively agreed to a purchase 7.5% stake, and CEO Doug McMillon would serve as one of the five board members of the newly created company.
"In addition, we would work toward an initial public offering of the company in the United States within the next year to bring even more ownership to American citizens," a Walmart spokesperson said in a statement.
TikTok's Chinese parent company ByteDance will own the remaining 80% of TikTok, according to a person familiar with the matter. However, because 40% of ByteDance is owned by U.S. venture capital firms, the Trump administration can technically claim TikTok Global is now majority owned by U.S. money.
TikTok said it will maintain and expand its headquarters in the U.S., while bringing 25,000 jobs across the country. Trump had said a new company will likely be incorporated in Texas.
Trump said the companies would also make a $5 billion contribution toward an education fund. Oracle and Walmart said in a joint statement that the global TikTok business will pay over $5 billion in new taxes to the U.S. Treasury Department, and that the companies and TikTok investors would build and provide online videos to teach kids about history, science and other subjects.
"We're going to be setting up a very large fund for the education of American youth and that'll be great," the president said. "That's the contribution I've been asking for."
The outcome could boost Oracle's position as a company that can handle challenging computing workloads and help to resolve a geopolitical dispute between the U.S. and China.
TikTok and Oracle both said Monday that ByteDance, the Chinese owner of TikTok, had sent a proposal to the U.S. Treasury Department over the previous weekend. Reports throughout the week said that negotiations were bogged down on the precise details of the deal, including the ownership stakes of Oracle and ByteDance, and control of the recommendation algorithms TikTok uses to promote particular material.
Oracle CEO Safra Catz was a member of President Trump's transition team, and Oracle Chairman Larry Ellison threw a fundraising event for Trump earlier this year.
"We are a hundred percent confident in our ability to deliver a highly secure environment to TikTok and ensure data privacy to TikTok's American users, and users throughout the world," Catz said in a statement Saturday after Oracle's role was announced. "This greatly improved security and guaranteed privacy will enable the continued rapid growth of the TikTok user community to benefit all stakeholders."
Oracle already provides cloud infrastructure to online video services 8x8 and Zoom, among other clients, although Amazon, Microsoft and other companies picked up more cloud revenue than Oracle in 2019, according to estimates from industry research company Gartner.
Microsoft had sought to acquire TikTok's operations in the U.S. Canada, Australia and New Zealand, with Walmart as a partner, but said ByteDance had decided not to do that deal.
Oracle and Walmart said U.S. TikTok user data would be moved to Oracle's cloud infrastructure. The companies did not provide a timeline.
China and the Trump administration have used tariffs in their trade war in recent years, and their disagreements have spilled over into the technology industry. The Treasury Department's Committee on Foreign Investment in the United States pushed for a sale of dating app Grindr by the Chinese company that bought it in 2016, and the committee later looked into ByteDance's 2017 acquisition of Musical.ly, a video sharing app that ByteDance merged with TikTok in 2018, because of national security concerns. A Trump executive order in August in August sought to block U.S. transactions with ByteDance, as well as Tencent, which owns messaging app WeChat.
President Trump had taken steps to ban TikTok in the U.S. or make ByteDance sell the app's U.S. assets. The Chinese government subsequently revised export restrictions so that they now cover "recommendation of personalized information services based on data analysis," among other things. TikTok's app draws on recommendation systems to select videos to show each user.
Saturday will mark a year since Donald Trump said he would ban the wildly popular and annoyingly addictive short-video app TikTok from millions of US smartphones, citing threats to users’ privacy and security posed by its Chinese ownership.
A week later, Trump signed an executive order directing the app’s Chinese owner, ByteDance, to either sell TikTok to an American business within 45 days or see it forcibly removed from app stores and blocked. The deadline was extended several times, and Oracle and Walmart emerged as the putative saviors for TikTok in a deal that was later shelved. At one point, Trump brazenly suggested any sale should include a cut for the US government itself.
A year on, nothing has changed and everything has changed. ByteDance still owns TikTok, which added 7 million new US users in the first four months of this year. Trump is gone, and the threat from the US government has receded—but the Chinese government now looms over the popular app.
“If I was ByteDance I wouldn’t be breaking out the champagne,” says James Lewis, senior vice president and director of the Strategic Technologies Program at the Center for Strategic and International Studies. “TikTok could be standing perfectly still, but the landscape is moving around them—mainly because of Chinese activity.”
China has taken an increasingly hard-line approach to regulating its tech companies and scrutinizing the data they own. After scuppering the IPO of Ant Financial, a spinoff of ecommerce giant Alibaba, last December, the government introduced new cybersecurity rules in April that put domestic tech companies on a tighter leash.
“If I was ByteDance I wouldn’t be breaking out the champagne.”
James Lewis, Center for Strategic and International Studies
This month, the Chinese government blocked ride-hailing service Didi from signing up new users and ordered the app removed from Chinese app stores just days after the company’s IPO, which reportedly defied a recommendation that it be delayed for a cybersecurity audit. ByteDance has also reportedly shelved its own IPO due to similar government scrutiny.
In the US, President Biden in June withdrew Trump’s executive order seeking to ban TikTok as well as another Chinese-owned app, WeChat. Last week, TikTok and the administration agreed to drop litigation over Trump’s attempted ban. But Biden ordered the Commerce Department to launch an inquiry into foreign-owned apps, including TikTok.
Lewis believes that the Biden White House is just as uncomfortable about TikTok as its predecessor was. He says the administration may issue its own executive order that leads to a forced sale. “This administration is more hard-line on China than Trump, in part because they're organized,” he says. “It's not chaos.”
Trump’s moves against TikTok came amid mounting skepticism in the West of China’s economic growth and technological reach. Many European countries have sought to limit economic ties to China over the past several years, according to a July 2020 report from the Brookings Institution, a DC-based think tank.
The feeling goes both ways. Rui Ma, an analyst with Tech Buzz China who follows ByteDance closely, says there was considerable public pushback in China to the idea of ByteDance selling off TikTok. Some people feared US ownership would pose security risks to the parent company and to its Chinese customers’ data.
TikTok might seem an unlikely object of superpower competition. The app serves up an endless stream of remixed songs, memes, viral clips, and the odd celebrity cameo, algorithmically selected to appeal to your interests and tastes. Trump’s looming ban was met last year with shock and incredulity from TikTok-addicted teens; others noted the irony of shutting down a platform that prizes freedom of expression in the name of punishing China, where information is tightly controlled.
ByteDance hardly seems to be an agent of the Chinese government. The company has faced pressure from the government in recent years over racy or salacious content served up by its news app Jinri Toutiao (meaning “today’s headlines”). But TikTok’s ties to China remain a concern for the US government, especially as its reach and influence grows. TikTok’s US users increased to 73.7 million in April from 65.9 million at the end of 2020, according to eMarketer, an analyst firm. The app is a striking example of China’s high tech business savvy, outmaneuvering some of the world’s largest social media companies, like Facebook and Twitter, on their Silicon Valley home turf.
“It’s not just leverage over the data, it’s leverage over people with access to the data.”
Kara Frederick, research fellow, Heritage Foundation
TikTok grew from ByteDance’s 2017 acquisition of the US lip-synching app Musical.ly. At Trump’s direction, the Committee on Foreign Investment in the United States conducted a retrospective review of the Musical.ly acquisition, concluding in August 2020 that it posed a threat to national security. CFIUS and the Commerce Department did not respond to requests for comment.
TikTok has rolled out new initiatives aimed at getting users to engage and use the platform in new ways. Last week this included a way for users to apply for jobs by recording “TikTok résumés” to send to select hiring companies. “TikTok has massive data on Americans,” Lewis says. “It has their faces, their voice, their IP. It has become a huge window into American society.”
Some serious questions linger over the app’s ownership and operations, as well as how much personal data it collects on US citizens and how its algorithms could perhaps be used to shape what American’s think.
“I think the Trump administration rightly identified privacy and security concerns,” says Ainikki Riikonen, a research assistant focused on technology at the Center for New American Security. “But then he created this whack-a-mole mess, ruling by executive order."
Under increased scrutiny from the Trump administration, TikTok made efforts last year to distance itself from Beijing. These include hiring the former Disney executive Kevin Mayer as US CEO, as well as COO of the parent company ByteDance, in May 2020. Meyer left the company just three months later, citing “the political environment” and the likelihood of TikTok being sold to a US company. TikTok’s CEO is now Shou Zi Chew, ByteDance’s CFO, who is based in Singapore. Last September, TikTok made a deal to make Oracle its “secure cloud provider,” an arrangement that the US company said would guarantee that no US customer data ended up being sent to China.
TikTok maintains that the US offering is walled off from ByteDance’s Chinese business. A spokeswoman for TikTok says the algorithms used to determine what videos users see, as well as those that automatically help catch prohibited content such as nudity or hate speech, are “developed separately” in the US and that user data is kept within the US.
Former TikTok engineers who spoke to WIRED on condition of anonymity say protections are in place to stop data being shared easily within the company. But they describe a company where management power rests in China and where engineering and product decisions come from the parent company.
An analysis of TikTok and its Chinese counterpart, Douyin, conducted by researchers at the University of Toronto’s Citizen Lab in March, found evidence that the apps share a common codebase. “Even if no non-Chinese user data is transferred to China, the Chinese government might be able to order changes to TikTok's source code to enable such transfer or other features they want,” says Pellaeon Lin, one of the researchers involved.
Kara Frederick, a research fellow in technology policy at the Heritage Foundation, a conservative think tank, says it’s difficult to see how ByteDance could satisfy US concerns over privacy and security. “Something that gets missed is that it’s not just leverage over the data, it’s leverage over people with access to the data,” Frederick says. “So it doesn’t just matter where it’s stored.”
Others believe that TikTok can find a way to reassure the US government and defy the technological decoupling that the US and China seem intent on. “User data flows can be audited,” says Ma of Tech Buzz China. “We're in the same spot as last year, in my opinion, and it's really just the company trying to show they are aboveboard.”
More Great WIRED Stories
TikTok sale to Oracle, Walmart reportedly on hold as Biden administration reviews
Oracle and Walmart's plan to buy TikTok's U.S. operations has been pushed back indefinitely, as President Joe Biden reviews former president Donald Trump's efforts to address potential security risks from Chinese tech companies, The Wall Street Journal reported on Wednesday, citing people familiar with the matter.
Oracle's stock was slightly positive in premarket trading Wednesday and Walmart's was slightly negative.
Trump pushed TikTok to find an American buyer by threatening to ban the popular video app due to concerns that its Chinese parent company ByteDance could hand over U.S. users' data to the Chinese government. TikTok has denied that this is the case or that it would it hand over U.S. data if asked by Chinese officials. Servers for the app are not based in China and so far, many of the concerns still appear to be hypothetical.
TikTok ultimately struck a partnership deal with Oracle and Walmart that would include the U.S. businesses buying a stake in the app and providing secure technology. Under the terms of the deal, ByteDance would still own 80% of the business, a person familiar with the matter told CNBC last year. Still, Trump said in September that he had approved the deal in principle.
But the arrangement has stalled as TikTok fought with the Trump administration in court over the attempted ban. Federal judges repeatedly pushed back the ban, with one saying in a December ruling that the Commerce Department under Trump "likely overstepped" its legal authority in issuing it.
At a White House press briefing Wednesday, Press Secretary Jen Psaki told reporters the administration hasn't taken any new actions on the TikTok deal.
"It's not accurate to suggest that there is a new proactive step by the Biden White House," Psaki said. "There is a rigorous CFIUS process that is ongoing."
She added that the administration continues to broadly evaluate the risks to U.S. data from apps including TikTok.
Sources told the Journal that TikTok has continued talks with the Committee on Foreign Investment in the U.S. (CFIUS) but that the ultimate deal would likely be different than the one originally struck. Chinese regulators would also have to approve the deal.
Walmart declined to comment. Representatives for the TikTok, Oracle and the Commerce and Treasury Departments did not immediately respond to CNBC's requests for comment.
Read the full Journal story here.
-Reuters and CNBC's Melissa Repko contributed to this report.
Tiktok who bought
A deal to sell the US operations of TikTok is on hold.
On Wednesday, The Wall Street Journal reported that a complex deal involving Oracle and Walmart had been shelved as the Biden administration reviews the security risks posed by TikTok and other Chinese-owned apps. The Journal cited people familiar with the situation.
TikTok has been a political football since last summer, when then-President Donald Trump issued a pair of executive orders that cited the app's data collection practices as national security concerns. One of the executive orders barred transactions with TikTok, while the other required the sale of the US business. The orders, which would've effectively banned TikTok, prompted a scramble to find a buyer for the popular app. Oracle and Walmart struck a complex deal that appeared to have Trump's blessing but wasn't completed before he left office.
TikTok, Oracle and Walmart didn't immediately respond to requests for comment.
The new and indefinite pause on the sale comes after a series of court cases brought by TikTok and content creators to block Trump's proposed ban. In December, a federal judge said the government had "likely overstepped" its authority in pushing to ban the app. The judge's order prevented the government from blocking internet hosting companies, content delivery networks and other services from working with TikTok.
Here's what you need to know about the complex drama:
Alright, so if a deal happened, what would it look like?
That's a big "if" given all that's happened in this saga. If a deal were to happen, it would likely look different than the deal struck last year, the Journal reported, citing unnamed people. That said, some details were discussed last year when the proposed deal looked like it would happen. Oracle and Walmart would get a combined 20% stake in a new company called TikTok Global, which would later go public. Four of the five members on TikTok Global's board of directors would be American.
Entertain your brain with the coolest news from streaming to superheroes, memes to video games.
Oracle would host all US user data on its cloud platform and be tasked with "securing associated computer systems," TikTok said in a statement at the time.
"We are a hundred percent confident in our ability to deliver a highly secure environment to TikTok and ensure data privacy to TikTok's American users, and users throughout the world," Oracle CEO Safra Catz said in a statement.
Now playing:Watch this: TikTok-Oracle deal approved, temporary block on WeChat...
TikTok Global would likely create 25,000 US jobs as part of an expansion of its global headquarters, which would remain in the US. TikTok Global would pay more than $5 billion in new tax dollars to the US Treasury, according to Walmart. It would also create an educational program to "develop and deliver an AI-driven online video curriculum" that includes courses in math, reading, science, history and computer engineering for children.
Does that mean ByteDance owns 80% of TikTok Global?
There's confusion over how big a role ByteDance would play in TikTok Global. ByteDance says it would have an 80% stake in TikTok Global before the new company goes public.
But Ken Glueck, Oracle executive vice president, said in a statement that "upon creation of TikTok Global, Oracle/Walmart will make their investment and the TikTok Global shares will be distributed to their owners, Americans will be the majority and ByteDance will have no ownership in TikTok Global."
A person familiar with the deal told The Wall Street Journal that ByteDance wouldn't technically be an owner of TikTok Global because shares in the entity would be given to ByteDance investors. About 40% of ByteDance is owned by US venture capital firms.
Why would Walmart want a stake in TikTok?
TikTok has been experimenting with e-commerce features. Last year, the company started letting some users add links to e-commerce sites so people can buy products shown in videos.
Walmart said it would "bring its omnichannel retail capabilities including its Walmart.com assortment, eCommerce marketplace, fulfillment, payment and measurement-as-a-service advertising service" to TikTok.
Would the Chinese government approve of the TikTok-Oracle deal?
China reportedly objected to a forced sale of TikTok's US operations, but the current deal structure isn't a full divestment. Still, there are signs Beijing isn't fully comfortable with the proposal.
"Based on what I know, Beijing won't approve current agreement between ByteDance, TikTok's parent company, and Oracle, Walmart, because the agreement would endanger China's national security, interests and dignity," tweeted Hu Xijin, editor-in-chief of the Global Times. The tabloid is backed by China's Communist Party.
In August, China issued new restrictions on exports of artificial intelligence technology, a move that delayed the TikTok deal. Under the current proposal, ByteDance won't be transferring its algorithm and technology to Oracle, which might satisfy Chinese regulators.
CNET's Steven Musil contributed to this report.
TikTok: why it is being sold and who will own it
Why is TikTok for sale?
Donald Trump has accused the video-sharing social networking service, which is wildly popular in the US, of being a threat to national security. He claims its Chinese parent company, ByteDance, would give the Chinese government access to user data upon request. TikTok denies the accusation.
The US president has demanded a full sale of TikTok to an American owner. In August, he gave ByteDance 90 days to sell up or face a shutdown. He later issued twin executive orders banning US transactions with ByteDance and also the owner of the Chinese messaging and payments app WeChat.
But later that month China complicated a potential sale, with an amendment to its export restrictions requiring companies to seek government approval before exporting Chinese tech. It was widely believed to be aimed at the technology driving TikTok’s algorithm – AI interfaces, voice recognition, and content recommendation analysis.
Last week, the US department of commerce said if an acceptable deal was not reached it would ban new downloads and updates of TikTok from 20 September before banning the app completely on 12 November.
The new deal. What is it?
In an attempt to get Trump to cool his jets, ByteDance made a tentative deal over the weekend to create a US subsidiary called TikTok Global, part-owned by the US entities Oracle and Walmart. Four of the company’s five board members would be American, and the fifth likely to be the ByteDance founder, Zhang Yiming. Trump delayed Sunday’s ban by a week.
The proposed ownership structure is murky, with conflicting statements from the different companies involved. Oracle and Walmart say they will own 20%, ByteDance says it will own 80% and will float the rest, bringing increased scrutiny in a move likely aiming to allay privacy concerns. Then there’s a statement attributed to Oracle’s vice president: “Upon creation of TikTok Global, Oracle/Walmart will make their investment and the TikTok Global shares will be distributed to their owners, Americans will be the majority and ByteDance will have no ownership in TikTok Global.”
“There are competing claims [about ownership] because no one is really telling the full story,” said Prof Paul Haskell-Dowland, associate dean (Computing and Security), at Edith Cowan University in Perth, Australia.
“The best information I can gather is that the Trump administration is supportive of the Oracle Walmart combined bid while at the same time saying the whole ownership must be in the US. But at the same time you’ve got the Chinese owners saying they are retaining the majority share [of 80%]. Then you’ve got news releases from Oracle and Walmart about their respective proposed percentages which amount to 20% with a 12.5% to 7.5% split.”
If ByteDance retains 80%, and Haskell-Dowland said they’ve made it clear they don’t intend to completely divest, then the deal won’t meet Trump’s expectations of US ownership.
“They actually have no authority to reject the bid, but they can put hurdles in place and they can reinstate the ban,” Haskell-Dowland said.
Is the TikTok algorithm still an issue?
Absolutely, said Haskell-Dowland. TikTok is still indicating it is not seeking to provide the algorithms driving the apps’ recommendations to the new buyer.
“So either it would have to be redeveloped, and that could be part of Oracle’s contribution, or there would have to be some compromise by the parties,” he said.
“The platform is valuable because of the algorithm. Oracle and Walmart can still make money out of the platform … but without the key features a lot of the user base will move on.”
TikTok’s recommendation algorithm relies on domestic technology. Last month Bloomberg likened a sale of TikTok without the algorithm to a sale of KFC without the 11 secret herbs and spices.
The deal seems to be “changing by the hour”, said Haskell-Dowland. China and the US will likely engage in a bit more back and forth over the structure of the deal. Haskell-Dowland says in the end, it’s a political fight between two sparring nations, and not really to do with national security or intellectual property. At the moment, it looks like China is winning since they hold the ace card: the technology. But if Trump rejects the deal and bans the app, he might chalk it up as a win, albeit one that makes a lot of young Americans unhappy.
Then there’s WeChat, which is also in Trump’s sights but has been running along a slightly different track. A US court overturned a ban on the messaging app, finding that WeChat users who filed a lawsuit “have shown serious questions going to the merits of the first amendment claim, the balance of hardships tips in the plaintiffs’ favour”.
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Chinese video-sharing/social networking service, owned by ByteDance
For the film, see Tiktok (film). For other uses, see Tick tock.
TikTok, known in China as Douyin (Chinese: 抖音; pinyin: Dǒuyīn), is a video-sharing focused social networking service owned by Chinese company ByteDance. It hosts a variety of short-form user videos, from genres like dance, comedy, and education, with durations from 15 seconds to three minutes. It is an international version of Douyin, originally released in the Chinese market in September 2016. TikTok was launched in 2017 for iOS and Android in most markets outside of mainland China; however, it became available worldwide only after merging with another Chinese social media service, Musical.ly, on 2 August 2018.
TikTok and Douyin have almost the same user interface but no access to each other's content. Their servers are each based in the market where the respective app is available. The two products are similar, but features are not identical. Douyin includes an in-video search feature that can search by people's faces for more videos of them and other features such as buying, booking hotels and making geo-tagged reviews. Since its launch in 2016, TikTok/Douyin rapidly gained popularity in East Asia, South Asia, Southeast Asia, the USA, Turkey, Russia, and other parts of the world. As of October 2020, TikTok surpassed over 2 billion mobile downloads worldwide.
In May 2021, TikTok appointed Shou Zi Chew as their new CEO who assumed the position from interim CEO Vanessa Pappas, following the resignation of Kevin A. Mayer on 27 August 2020. On 3 August 2020, U.S. President Donald Trump threatened to ban TikTok in the United States on 15 September if negotiations for the company to be bought by Microsoft or a different "very American" company failed. On 6 August, Trump signed two executive orders banning U.S. "transactions" with TikTok and WeChat to its respective parent companies ByteDance and Tencent, set to take effect 45 days after the signing. A planned ban of the app on 20 September 2020 was postponed by a week and then blocked by a federal judge. President Biden revoked the ban in a new executive order in June 2021. The app has been banned by the government of India since June 2020 along with 223 other Chinese apps in view of privacy concerns. Pakistan banned TikTok citing "immoral" and "indecent" videos on 9 October 2020 but reversed its ban ten days later. In March 2021, a Pakistani court ordered a new TikTok ban due to complaints over "indecent" content.
Morning Consult ranked TikTok as the third fastest growing brand of 2020, after only Zoom and Peacock.
Douyin was launched by ByteDance in Beijing, China in September 2016, originally under the name A.me, before rebranding to Douyin (抖音) in December 2016. ByteDance planned on Douyin expanding overseas. The founder of ByteDance, Zhang Yiming, stated that "China is home to only one-fifth of Internet users globally. If we don’t expand on a global scale, we are bound to lose to peers eyeing the four-fifths. So, going global is a must." Douyin was developed in 200 days and within a year had 100 million users, with more than one billion videos viewed every day.
The app was launched as TikTok in the international market in September 2017. On 23 January 2018, the TikTok app ranked No. 1 among free app downloads on app stores in Thailand and other countries.
TikTok has been downloaded more than 130 million times in the United States, and has reached 2 billion downloads worldwide, according to data from mobile research firm Sensor Tower that excludes Android users in China.
In the United States, many celebrities including Jimmy Fallon and Tony Hawk began using the app in 2018. Other celebrities, including Jennifer Lopez, Jessica Alba, Will Smith, and Justin Bieber joined TikTok as well and many other celebrities have followed.
On 3 September 2019, TikTok and the U.S. National Football League (NFL) announced a multi-year partnership. The agreement occurred just two days before the NFL's 100th season kick-off at the Soldier Field, where TikTok hosted activities for fans in honor of the deal. The partnership entails the launch of an official NFL TikTok account, which is to bring about new marketing opportunities such as sponsored videos and hashtag challenges. In July 2020, TikTok, excluding Douyin, reported close to 800 million monthly active users worldwide after less than four years of existence.
Further information: Musical.ly
On 9 November 2017, TikTok's parent company, ByteDance, spent up to U.S.$1 billion to purchase musical.ly, a startup headquartered in Shanghai with an overseas office in Santa Monica, California, U.S. Musical.ly was a social media video platform that allowed users to create short lip-sync and comedy videos, initially released in August 2014. It was well known, especially to the younger audience. Looking forward to leveraging the U.S. digital platform's young user base, TikTok merged with musical.ly on 2 August 2018 to create a larger video community, with existing accounts and data consolidated into one app, keeping the title TikTok. This ended musical.ly and made TikTok a worldwide app, excluding China, since China already has Douyin.
Expansion in other markets
As of 2018, TikTok was available in more than 150 markets, and in 75 languages. TikTok was downloaded more than 104 million times on Apple's App store during the full first half of 2018, according to data provided to CNBC by Sensor Tower.
After merging with musical.ly in August, downloads increased and TikTok became the most downloaded app in the U.S. in October 2018, which musical.ly had done once before. In February 2019, TikTok, together with Douyin, hit one billion downloads globally, excluding Android installs in China. In 2019, media outlets cited TikTok as the 7th-most-downloaded mobile app of the decade, from 2010 to 2019. It was also the most-downloaded app on Apple's App Store in 2018 and 2019, surpassing Facebook, YouTube and Instagram. In September 2020, a deal was confirmed between ByteDance and Oracle in which the latter will serve as a partner to provide cloud hosting.Walmart intends to invest in TikTok. This deal would stall in 2021 as newly elected President Biden's Justice Department put a hold on the previous U.S. ban under President Trump. In November 2020, TikTok signed a licensing deal with Sony Music. In December 2020, Warner Music Group signed a licensing deal with TikTok.
In September 2021, TikTok reached 1 billion users.
Features and trends
The TikTok mobile app allows users to create short videos, which often feature music in the background and can be sped up, slowed down, or edited with a filter. They can also add their own sound on top of the background music. To create a music video with the app, users can choose background music from a wide variety of music genres, edit with a filter and record a 15-second video with speed adjustments before uploading it to share with others on TikTok or other social platforms. They can also film short lip-sync videos to popular songs.
The "For You" page on TikTok is a feed of videos that are recommended to users based on their activity on the app. Content is generated by TikTok's artificial intelligence (AI) depending on the content a user liked, interacted with, or searched. Users can also choose to add to favorites or select "not interested" on videos for their page. TikTok combines the user's enjoyed content to provide videos that they would also enjoy. Users and their content can only be featured on the "for you" page if they are 16 or over as per TikTok policy. Users under 16 will not show up under the "for you" page, the sounds page, or under any hashtags.
The app's "react" feature allows users to film their reaction to a specific video, over which it is placed in a small window that is movable around the screen. Its "duet" feature allows users to film a video aside another video. The "duet" feature was another trademark of musical.ly. The duet feature is also only able to be used if both parties adjust the privacy settings.
Videos that users do not want to post yet can be stored in their "drafts". The user is allowed to see their "drafts" and post when they find it fitting. The app allows users to set their accounts as "private." When first downloading the app, the user's account is public by default. The user can change to private in their settings. Private content remains visible to TikTok, but is blocked from TikTok users who the account holder has not authorized to view their content. Users can choose whether any other user, or only their "friends", may interact with them through the app via comments, messages, or "react" or "duet" videos. Users also can set specific videos to either "public", "friends only", or "private" regardless if the account is private or not.
Users are also allowed to report accounts depending on the account's content, either being spam or inappropriate. In TikTok's support center under "For Parents," they reassure the parents that inappropriate content for their children can be blocked and reported.
When users follow other users, a "following" page is located on the left of the "for you" page. This is a page only to see the videos from the accounts a user follows. Users can also add videos, hashtags, filters, and sounds to their "saved" section. When creating a video, they can refer to their saved section, or create a video straight from it. This section is visible only to the user on their profile allowing them to refer to any video, hashtag, filter, or sound they've previously saved.
Users can also send their friends videos, emojis, and messages with direct messaging. TikTok has also included a feature to create a video based on the user's comments. Influencers often use the "live" feature. This feature is only available for those who have at least 1,000 followers and are over 16 years old. If over 18, the user's followers can send virtual "gifts" that can be later exchanged for money.
One of the newest features as of 2020 is the "Virtual Items" of "Small Gestures" feature. This is based on China's big practice of social gifting. Since this feature was added, many beauty companies and brands created a TikTok account to participate and advertise this feature. With quarantine in the United States, social gifting has grown in popularity. According to a TikTok representative, the campaign was launched as a result of the lockdown, "to build a sense of support and encouragement with the TikTok community during these tough times."
TikTok announced a "family safety mode" in February 2020 for parents to be able to control their children's digital well-being. There is a screen time management option, restricted mode, and can put a limit on direct messages.
The app expanded its parental controls feature called "Family Pairing" in September 2020 to provide parents and guardians with educational resources to understand what children on TikTok are exposed to. Content for the feature was created in partnership with online safety nonprofit, Internet Matters.
Further information: TikTok food trends
A variety of trends have risen within TikTok, including memes, lip-synced songs, and comedy videos. Duets, a feature that allows users to add their own video to an existing video with the original content's audio, have sparked many of these trends.
Trends are shown on TikTok's explore page or the page with the search logo. The page enlists the trending hashtags and challenges among the app. Some include #posechallenge, #filterswitch, #dontjudgemechallenge, #homedecor, #hitormiss, #bottlecapchallenge and more. In June 2019, the company introduced the hashtag #EduTok which received 37 billion views. Following this development, the company initiated partnerships with edtech startups to create educational content on the platform.
The app has spawned numerous viral trends, Internet celebrities, and music trends around the world. Many stars got their start on musical.ly, which merged with TikTok on 2 August 2018. These users include Loren Gray, Baby Ariel, Kristen Hancher, Zach King, Lisa and Lena, Jacob Sartorius, and many others. Loren Gray remained the most-followed individual on TikTok until Charli D’Amelio surpassed her on 25 March 2020. Gray's was the first TikTok account to reach 40 million followers on the platform. She was surpassed with 41.3 million followers. D'Amelio was the first to ever reach 50, 60, and 70 million followers. Until now Charli D’Amelio remains the most-followed individual on the platform. Other creators rose to fame after the platform merged with musical.ly on 2 August 2018.
One notable TikTok trend is the "hit or miss" meme, which begain from a snippet of iLOVEFRiDAY's song "Mia Khalifa." The song has been used in over four million TikTok videos and helped introduce the app to a larger Western audience. TikTok also played a major part in making "Old Town Road" by Lil Nas X one of the biggest songs of 2019 and the longest running number-one song in the history of the Billboard Hot 100.
TikTok has allowed many other bands to gain a wider audience, often including foreign fans. For example, despite never having toured in Asia, the band Fitz and the Tantrums developed a large following in South Korea following the widespread popularity of their song "HandClap" on the platform. "Any Song" by R&B and rap artist Zico became number one on the Korean music charts due to the popularity of the #anysongchallenge, where users dance the choreography of "Any Song". The platform has received some criticism for not paying royalties to artists whose music is used on their platform. In 2020, more than 176 different songs surpassed 1 billion video views on TikTok.
In June 2020, TikTok users and K-pop fans "claimed to have registered potentially hundreds of thousands of tickets" for President Trump's campaign rally in Tulsa through communication on TikTok, contributing to "rows of empty seats" at the event.
TikTok has banned Holocaust denial, but other conspiracy theories have become popular on the platform, such as Pizzagate and QAnon (two conspiracy theories popular among the U.S. alt-right) whose hashtags reached almost 80 million views and 50 million views respectively by June 2020. The platform has also been used to spread misinformation about the COVID-19 pandemic, such as clips from Plandemic. TikTok removed some of these videos, and has generally added links to accurate COVID-19 information on videos with tags related to the pandemic.
On 10 August 2020, Emily Jacobssen wrote and sang "Ode To Remy," a song praising the protagonist from Pixar's 2007 computer-animated film named Ratatouille. The song rose to popularity when musician Daniel Mertzlufft composed a backing track to the song. In response, began creating a "crowdsourced" project called Ratatouille The Musical. Since Mertzlufft's video, many new elements including costume design, additional songs, and a playbill have been created. The trend has been even been noticed by Lou Romano, who voiced Alfredo Linguini in the original film; Broadway performer Kevin Chamberlin; and Disney Channel actor Milo Manheim. On 1 January 2021, a full one-hour virtual presentation of Ratatouille the Musical premiered on the TodayTix. The production featured elements created via TikTok. It starred Titus Burgess as Remy, Wayne Brady as Django, Adam Lambert as Emile, Chamberlin as Gusteau, Andrew Barth Feldman as Linguini, Ashley Park as Colette, Priscilla Lopez as Mabel, Mary Testa as Skinner, and André De Shields as Ego.
Several food trends have emerged on the platform, such as Dalgona coffee.
Another TikTok usage that corresponds with engagement and bonds people in society is the use of "challenges." These could be on any related topic such as dances or cooking certain meals. People see other people doing something that is trending and then it continues to spread until it is a viral trend which connects people from all over.
While TikTok has primarily been used for entertainment purposes, TikTok may soon have another use, that of a job resource with the idea that prospective employment seekers would send in videos rather than traditional resumes. The form would most likely be a job search add-on. TikTok has had favorable results in the past with people using the site to find jobs and may be expanding that need especially in the newer generations. However, employers need to take care when viewing TikTok resumes that they are not being influenced by bias. Employers can see people's faces and physical traits which could potentially create diversity, equity and inclusion issues.
TikTok has provided a platform for users to create content not only for fun, but also for money. As the platform has grown significantly over the past few years, it has allowed companies to advertise and rapidly reach their intended demographic through influencer marketing. The platform's AI algorithm also contributes to the influencer marketing potential, as it picks out content according to the user's preference. Sponsored content is not as prevalent on the platform as it is on other social media apps, but brands and influencers still can make as much as they would if not more in comparison to other platforms. Influencers on the platform who earn money through engagement, such as likes and comments, are referred to as "meme machines".
In 2021, The New York Times reported that viral TikTok videos by young people relating the emotional impact of books on them, tagged with the label "BookTok", significantly drove sales of literature. Publishers were increasingly using the platform as a venue for influencer marketing.
User characteristics and behavior
See also: List of most-followed TikTok accounts
Globally, 44% of TikTok users are female while 56% are male. TikTok's geographical use has shown that 43% of new users are from India. TikTok tends to appeal to younger users, as 41% of its users are between the ages of 16 and 24. Among these TikTok users, 90% say they use the app daily. As of July 2020, there were over 90 million monthly active users in the United States alone.
Use by businesses
In October 2020, the ecommerce platform Shopify added TikTok to its portfolio of social media platforms, allowing online merchants to sell their products directly to consumers on TikTok.
Some small businesses have used TikTok to advertise and to reach an audience wider than the geographical region they would normally serve. The viral response to many small business TikTok videos has been attributed to TikTok's algorithm, which shows content that viewers at large are drawn to, but which they are unlikely to actively search for (such as videos on unconventional types of businesses, like beekeeping and logging).
In 2020, digital media companies such as Group Nine Media and Global used TikTok increasingly, focusing on tactics such as brokering partnerships with TikTok influencers and developing branded content campaigns. Notable collaborations between larger brands and top TikTok influencers have included Chipotle's partnership with David Dobrik in May 2019 and Dunkin' Donuts' partnership with Charli D'Amelio in September 2020.
Popular TikTok users have lived collectively in collab houses, predominately in the Los Angeles area.
Country bans and attempted bans
Main article: Censorship of TikTok
In April 2020, TikTok officially cooperated with mainland China's Internet censorship mechanism and began to prohibit the use of overseas versions of Douyin in mainland China. Different from general blockade, TikTok adopted an IP lock zone, mainly for mainland China; Hong Kong and Macau were not affected. The direct consequence of the lock zone is that Chinese users cannot log in to TikTok using a VPN. Officials have also restricted the numbers of China Mobile, China Telecom and China Unicom. The phone numbers of the above three cannot log in to TikTok. Even so, there are a large number of cracked versions of TikTok on the Chinese Internet. The cracked version of TikTok can watch videos normally, but the phone number restriction has not been cracked and users cannot log in.
In January 2021, the Great Firewall of China's blocking measures on TikTok were further upgraded, and the monitoring of the cracked version of TikTok was increased, and measures such as node blocking and IP blocking were adopted to interfere with the normal watching of videos by mainland users: that is, users watch normally, but after a few videos, the video cannot be refreshed, and you need to re-enter the software before you can continue watching.
The official website www.tiktok.com of the overseas version of TikTok is currently blocked by the Great Firewall, and the Chinese language of the official website of the overseas version only provides Traditional Chinese, as officially used in Taiwan, Hong Kong and Macau, instead of Simplified Chinese.
TikTok was banned completely in India by the Ministry of Electronics and Information Technology on 29 June 2020, along with 223 other Chinese apps, with a statement saying they were "prejudicial to sovereignty and integrity of India, defense of India, security of state and public order". The ban was made permanent in January 2021. In February 2021, TikTok announced that due to the ban it will cut more than 2,000 jobs in India.
Main article: Donald Trump–TikTok controversy
On 6 August 2020, then U.S. President Donald Trump signed an order which would ban TikTok transactions in 45 days if it was not sold by ByteDance. Trump also signed a similar order against the WeChat application owned by the Chinese multinational company Tencent.
On 14 August 2020, Trump issued another order giving ByteDance 90 days to sell or spin off its U.S. TikTok business. In the order, Trump said that there is "credible evidence" that leads him to believe that ByteDance "might take action that threatens to impair the national security of the United States." Donald Trump was concerned about TikTok being a threat because TikTok's parent company was rumored to be taking United States user data and reporting it back to Chinese operations through the company ByteDance. As of 2021, there is still the fear that TikTok is not protecting the privacy of its users and may be giving their data away.
TikTok considered selling the American portion of its business, and held talks with companies including Microsoft, Walmart, and Oracle.
On September 18, TikTok filed a lawsuit, TikTok v. Trump. On 23 September 2020, TikTok filed a request for a preliminary injunction to prevent the app from being banned by the Trump administration. U.S. judge Carl J. Nichols temporarily blocked the Trump administration order that would effectively ban TikTok from being downloaded in U.S. app stores starting midnight on 27 September 2020. Nichols allowed the app to remain available in the U.S. app stores, but declined to block the additional Commerce Department restrictions that could have a larger impact on TikTok's operations in the U.S. These restrictions were set to take place 12 November 2020.
Three TikTok influencers filed a lawsuit, Marland v. Trump. On October 30, Pennsylvania judge Wendy Beetlestone ruled against the Commerce Department, blocking them from restricting TikTok. On November 12, the Commerce Department stated that it would obey the Pennsylvania ruling and that it would not try to enforce the restrictions against TikTok that had been scheduled for November 12.
The Commerce Department appealed the original ruling in TikTok v. Trump. On December 7, Washington D.C. district court judge Carl J. Nichols issued a preliminary injunction against the Commerce Department, preventing them from imposing restrictions on TikTok.
In June 2021, President Biden signed an executive order revoking the Trump administration ban on TikTok, and instead ordered the Secretary of Commerce to investigate the app to determine if it poses a threat to U.S. national security.
Indonesia and Bangladesh
TikTok has been intermittently blocked in Indonesia and Bangladesh on different bases.
On 11 October 2020, Pakistan became the next country to ban the social media platform after not complying with issues regarding the content on the platform brought up by their government. TikTok representatives are currently speaking with Pakistani officials in hopes of building better relations and allowing the people of Pakistan to create on the platform.
Some users may find it hard to stop using TikTok. In April 2018, an addiction-reduction feature was added to Douyin. This encouraged users to take a break every 90 minutes. Later in 2018, the feature was rolled out to the TikTok app. TikTok uses some top influencers such as Gabe Erwin, Alan Chikin Chow, James Henry, and Cosette Rinab to encourage viewers to stop using the app and take a break.
Many were also concerned with users' attention spans with these videos. Users watch short 15-second clips repeatedly and studies say that this could result in a decreased attention span. This is a concern as many of TikTok's audience are younger children, whose brains are still developing.
Many countries showed concerns regarding the content of TikTok which is thought to be obscene, immoral, vulgar and encouraging of pornography. There have been temporary blocks and warnings issued by countries including Indonesia,Bangladesh,India, and Pakistan over the content concerns. In 2018, Douyin was reprimanded by Chinese media watchdogs for showing "unacceptable" content, such as videos depicting adolescent pregnancies.
On 27 July 2020, Egypt sentenced five women to two years in prison over TikTok videos on charges of violating public morals. The court also imposed a fine of 300,000 Egyptian pounds (UK£14,600) on each defendant.
Concerns have been voiced regarding content relating to, and the promotion of spreading hateful words and far-right extremism, such as anti-semitism, racism and xenophobia. Some videos were shown to expressly deny the existence of the Holocaust and for its viewers to take up arms and fight in the name of white supremacy and the swastika. As TikTok has gained popularity among young children and the popularity of extremist and hateful content is growing, calls for tighter restrictions on their flexible boundaries have been made. TikTok have since released tougher parental controls to filter out inappropriate content and to ensure they can provide sufficient protection and security.
Slowly turning into a hub of influencer marketing, Abu Dhabi (UAE) partnered with TikTok to promote its tourism, in April 2021. Under the channel name “Visit Abu Dhabi”, the Emirate aimed to engage with influencers who would showcase only the best of it to a worldwide audience. It came following the January 2021 winter campaign, initiated through a partnership between the UAE Government Media Office partnered and TikTok to promote the country's tourism. However, on the other side, the content creators in the country remained restricted. Under article 28 of Cyber-Crime Law, the UAE prohibits every person from publishing media content that violates its public image or poses a threat to its state security and to its highest interests. Many are often arrested or face charges for posting any photos or videos that are not in accordance with the country's image-building strategy.
A viral TikTok trend known as "devious licks" involves students vandalizing or stealing school property and posting the videos of the action on the platform. The trend has led to increasing school vandalism and subsequent measures taken by some schools to prevent damage. Some students have been arrested for participating in the trend. TikTok has taken measures to remove and prevent access to content displaying the trend.
In January 2020, Media Matters for America said that TikTok hosted misinformation related to the COVID-19 pandemic despite a recent policy against misinformation. In April 2020, the government of India asked TikTok to remove users posting misinformation related to the COVID-19 pandemic. There were also multiple conspiracy theories that the government is involved with the spread of the pandemic. As a response to this, TikTok launched a feature to report content for misinformation.
Content censorship and moderation by the platform
Main article: Censorship on TikTok
According to Mar Hicks, creators on TikTok feel that they have to be overly cautious about what they post, “because the rules change at any given moment, there’s no transparency,” Hicks says. The sudden disappearance of tags, intentional or not, has “incredibly problematic effects and negative effects on communities that are already marginalized and erased.”
The muddiness around content removal and moderation on TikTok is an ongoing frustration for the app's users. TikTok has community guidelines, but there's no public list of specific words and phrases that are banned, and it's not clear how much moderation is done algorithmically versus by actual people.
For example, in instances of protesting against acts of racism and racism as a whole, users have felt that there was a change in the popularity of their content, even so much as their content not showing up as frequently or even at all.
In March 2020, internal documents leaked to The Intercept revealed that moderators had been instructed to suppress posts created by users deemed "too ugly, poor, or disabled" for the platform, and to censor political speech in livestreams, punishing those who harmed "national honor" or broadcast streams about "state organs such as police" with bans from the platform.
In response to censorship concerns, TikTok's parent company hired K&L Gates, including former U.S. Congressmen Bart Gordon and Jeff Denham, to advise it on its content moderation policies. TikTok also hired lobbying firm Monument Advocacy.
In January 2021, TikTok banned Trump content deemed to be inciting violence.
Human rights in China
Main article: Human rights in China
In January 2019, the Chinese government said that it would start to hold app developers like ByteDance responsible for user content shared via apps such as Douyin, and listed 100 types of content that the Chinese government would censor. It was reported that certain content unfavorable to the Chinese Communist Party has already been limited for users outside of China such as content related to the 2019–20 Hong Kong protests or Tibetan independence. TikTok has blocked videos about human rights in China, particularly those that reference Xinjiang internment camps and abuses of ethnic and religious minorities such as the Uyghurs, and disabled the accounts of users who post them. TikTok's policies also ban content related to a specific list of foreign leaders such as Vladimir Putin, Donald Trump, Barack Obama, and Mahatma Gandhi because it can stir controversy and attacks on political views. Its policies also ban content critical of Recep Tayyip Erdoğan and content considered pro-Kurdish. TikTok was reported to have censored users supportive of the Citizenship Amendment Act protests in India and those who promote Hindu-Muslim unity. On 27 November 2019, TikTok temporarily suspended the account of 17-year-old Afghan-American user Feroza Aziz after she posted a video, disguised as a makeup tutorial, drawing attention to the internment camps of Muslim Uyghurs in Xinjiang, China. TikTok later apologized and explained that her account was suspended as a result of human error, and her account has since been reinstated. In July 2020, TikTok suspended the account of another user whose viral video called attention to human rights of the Uyghurs.
In June 2020, The Wall Street Journal reported that some previously non-political TikTok users were airing pro-Beijing views for the explicit purpose of boosting subscribers and avoiding "shadow" bans. In July 2020, the company announced it was pulling out of Hong Kong responding to the Hong Kong national security law.
In June 2020, The Times of India reported that TikTok was "shadow banning" videos related to the Sino-Indian border dispute and the 2020 China–India skirmishes.
In November 2020, a former TikTok executive stated to a UK parliamentary committee that TikTok censored content critical of China and particularly content related to the Uyghur genocide.
Main article: Use of social media by the Islamic State of Iraq and the Levant
In October 2019, TikTok removed about two dozen accounts that were responsible for posting ISIS propaganda on the app.
In countries where LGBT discrimination is the socio-political norm, TikTok moderators have blocked content that could be perceived as being positive towards LGBT people or LGBT rights, including same-sex couples holding hands, including in countries where homosexuality has never been illegal. Former U.S. employees of TikTok reported to The Washington Post that final decisions to remove content were made by parent company employees in Beijing.
In May 2021, Pidgeon Pagonis, an American intersex activist, reported that for the second time the intersex hashtag wasn't working on TikTok. They couldn't click the tag on one of their own posts and trying to search for "intersex" pulled up a "null" page. TikTok told The Verge that in both of the instances Pagonis noticed, the tag had been removed by mistake and was subsequently restored. However, because there was no public statement about the accidental removal, Pagonis and others were left to speculate about whether it was being intentionally censored.
People use different tactics to skirt TikTok's moderation. Some lesbian women on the app jokingly refer to themselves as "le dolla bean" based on the "le$bian" spelling that's used to avoid their videos being removed. “It became this whole joke,” says Mar Hicks, a historian of technology, “because things that have the word lesbian in them were either getting flagged for deletion or causing the users’ accounts to get in trouble.”
According to Mar Hicks, LGBTI people and people of color have found the guidelines are enforced “wildly differently” says Hicks, meaning their content will be suppressed or removed for supposed violations, but they get no response when they report abuse from other users. “Not only is it hurting their ability to speak and be seen on the app, but it’s also allowing them to get attacked and have hate speech thrown their way.”
Human rights in Russia
Main article: Human rights in Russia
On 3 February 2021, TikTok received a praise from Russian officials because social app's cooperation with them in deletion of "forbidden" content, mostly related to protest activity in Russia. In particular, as media censorship agency Roskomnadzor official Evgeniy Zaitsev stated that, "we need to highlight TikTok among other social media platforms because it has office in Russia and actively cooperated with us, which cannot be said about others". Also, the State Duma deputy Alexander Khinshtein said that TikTok new anti-fake news policies go well with the ideology of Russian content censorship law and edition of those "should be considered a very positive signal".
User privacy concerns
In January 2020, Check Point Research discovered a security flaw in TikTok which could have allowed hackers access to user accounts using SMS. In February, Reddit CEO Steve Huffman criticised the app, calling it "spyware," and stating "I look at that app as so fundamentally parasitic, that it's always listening, the fingerprinting technology they use is truly terrifying, and I could not bring myself to install an app like that on my phone." Responding to Huffman's comments, TikTok stated "These are baseless accusations made without a shred of evidence."Wells Fargo banned the app from its devices due to privacy and security concerns.
In May 2020, the Dutch Data Protection Authority announced an investigation into TikTok in relation to privacy protections for children. In June 2020, the European Data Protection Board announced that it would assemble a task force to examine TikTok's user privacy and security practices.
In August 2020, The Wall Street Journal reported that TikTok tracked Android user data, including MAC addresses and IMEIs, with a tactic in violation of Google's policies. The report sparked calls in the U.S. Senate for the Federal Trade Commission (FTC) to launch an investigation.
U.S. COPPA fines
See also: Children's Online Privacy Protection Act
On 27 February 2019, the United States Federal Trade Commission (FTC) fined ByteDance U.S.$5.7 million for collecting information from minors under the age of 13 in violation of the Children's Online Privacy Protection Act. ByteDance responded by adding a kids-only mode to TikTok which blocks the upload of videos, the building of user profiles, direct messaging, and commenting on others' videos, while still allowing the viewing and recording of content. In May 2020, an advocacy group filed a complaint with the FTC saying that TikTok had violated the terms of the February 2019 consent decree, which sparked subsequent Congressional calls for a renewed FTC investigation. In July 2020, it was reported that the FTC and the United States Department of Justice had initiated investigations.
UK Information Commissioner's Office investigation
In February 2019, the United Kingdom's Information Commissioner's Office launched an investigation of TikTok following the fine ByteDance received from the United States Federal Trade Commission (FTC). Speaking to a parliamentary committee, Information Commissioner Elizabeth Denham said that the investigation focuses on the issues of private data collection, the kind of videos collected and shared by children online, as well as the platform's open messaging system which allows any adult to message any child. She noted that the company was potentially violating the General Data Protection Regulation (GDPR) which requires the company to provide different services and different protections for children.
Italian Data Protection Authority
On 22 January 2021, the Italian Data Protection Authority ordered the blocking of the use of the data of users whose age has not been established on the social network. The order was issued after the death of a 10-year-old Sicilian girl, which occurred after the execution of a challenge shared by users of the platform that involved attempting to choke the user with a belt around the neck. The block is set to remain in place until 15 February, when it will be re-evaluated.
Ireland Data Protection Commission
In September 2021, the Ireland Data Protection Commissioner opened investigations into TikTok concerning protection of minors' data and transfers of personal data to China.
As with other platforms, journalists in several countries have raised privacy concerns about the app, because it is popular with children and has the potential to be used by sexual predators.
Several users have reported endemic cyberbullying on TikTok, including racism and ableism. In December 2019, following a report by German digital rights group Netzpolitik.org, TikTok admitted that it had suppressed videos by disabled users as well as LGBTQ+ users in a purported effort to limit cyberbullying. TikTok's moderators were also told to suppress users with "abnormal body shape", "ugly facial looks", "too many wrinkles", or in "slums, rural fields" and "dilapidated housing" to prevent bullying.
In 2021 the platform revealed that it will be introducing a feature that will prevent teenagers from receiving notifications past their bedtime. The company will no longer send push notifications after 9pm to users aged between 13 and 15. For 16-year-olds and those aged 17 notifications will not be sent after 10pm.
TikTok has received criticism for enabling children to spend large sums of money purchasing coins to send to other users.
Tencent's WeChat platform has been accused of blocking Douyin's videos. In April 2018, Douyin sued Tencent and accused it of spreading false and damaging information on its WeChat platform, demanding CN¥1 million in compensation and an apology. In June 2018, Tencent filed a lawsuit against Toutiao and Douyin in a Beijing court, alleging they had repeatedly defamed Tencent with negative news and damaged its reputation, seeking a nominal sum of CN¥1 in compensation and a public apology. In response, Toutiao filed a complaint the following day against Tencent for allegedly unfair competition and asking for CN¥90 million in economic losses.
Data transfer class action lawsuit
In November 2019, a class action lawsuit was filed in California that alleged that TikTok transferred personally identifiable information of U.S. persons to servers located in China owned by Tencent and Alibaba. The lawsuit also accused ByteDance, TikTok's parent company, of taking user content without their permission. The plaintiff of the lawsuit, college student Misty Hong, downloaded the app but said she never created an account. She realized a few months later that TikTok has created an account for her using her information (such as biometric) and made a summary of her information. The lawsuit also alleged that information was sent to Chinese tech giant Baidu. In July 2020, twenty lawsuits against TikTok were merged into a single class action lawsuit in the United States District Court for the Northern District of Illinois. In February 2021, TikTok agreed to pay $92 million to settle the class action lawsuit.
Voice actor lawsuit
In May 2021, Canadian voice actor Bev Standing filed a lawsuit against TikTok overuse of her voice in a filter without permission. The lawsuit was filed in the Southern District of New York. TikTok declined to comment. She believes the company used recordings made for the Chinese government-run Institute of Acoustics.
Market Information Research Foundation lawsuit
In June 2021, the Netherlands-based Market Information Research Foundation (SOMI) filed a €1.4 billion lawsuit on behalf of Dutch parents against TikTok, alleging that the app gathers data on children without adequate permission.
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