With 1bn downloads, ByteDance’s TikTok has become China’s first major social media hit abroad. In 2018, about 1.5 times more users downloaded it than its rival, Instagram. The rise of a Chinese-owned app with tens of millions of users in the US and elsewhere highlights that regulating social media and other technology platform companies is not just about taming the Silicon Valley giants. The challenge is all the greater in a global environment where tech regulation is highly fragmented.
ByteDance, which recently became the world’s most valuable privately held company at $75bn, acquired a Shanghai-based app already popular in the US called Musical.ly in 2017. It folded it into TikTok last year. A competitor to Instagram, YouTube and Snapchat, TikTok enables its often teenage users to upload short videos of themselves dancing or lip-syncing to songs. TechCrunch has called it “the Instagram for the mobile video age”. Its success is noteworthy. Chinese apps have largely failed to make inroads outside the Middle Kingdom. Tencent’s WeChat platform struggled to make headway overseas amid privacy and censorship fears.
But the US Federal Trade Commission last week fined TikTok $5.7m for alleged pre-merger violations by Musical.ly of the Children’s Online Privacy Protection Act (COPPA). The FTC said the app was collecting personal information, including email addresses from children under 13, without parental consent. The issue is sensitive at a time when YouTube is facing concerns that has been facilitating paedophile networks on its comment sections.
TikTok said last week it would require new and existing US users to verify their age and create a separate more limited app for under-13s. Campaigners warn those measures could be circumvented. They also suggest the fine — though the biggest ever levied under COPPA — was inadequate, small enough for tech companies simply to write off as a business expense.
The issue could be a test case for the FTC. Signalling an intention to step up scrutiny of online platforms, the commission also announced last week it was creating a task force to probe competition in the tech sector, including previous mergers. Unless it can prove its rules and enforcement have teeth, its legitimacy could be questioned.
The US, however, is not the only country with concerns about TikTok. Another is India, which accounted for a quarter of the app’s total downloads, and is wary of Chinese apps dominating its tech market. It has proposed laws that would require ByteDance to scour TikTok for harmful content — a broad category ranging from terrorist-related videos to pornography. While some of India’s worries reflect particular cultural issues, it shares concerns raised elsewhere about data privacy.
Chinese firms, after all, must deal with their government as well as comply with western regulations. In its terms and conditions, TikTok states it may share data with government bodies, as Chinese laws require. Rival Tencent’s WeChat messaging service was last year forced to deny claims that it stored users’ conversations, despite the legal requirements. TikTok’s refusal to acknowledge where its data is stored is a concern. If the servers are in China, the government could potentially access international data.
TikTok is unlikely to be the last Chinese-owned social media app to make it big outside China, making it a test of the regulatory framework. Whether in the US, China, India or elsewhere, safeguarding social media users and their data is paramount. The current patchwork quilt of national regulators has yet to prove it is up to the task.