Why the future of TikTok has never been more cloudy

Open the most downloaded charts for free apps on iOS and Google at the start of 2023 and you’ll find TikTok where it usually is: at the top. The video-focused social app currently ranks #3 on both stores, with only a shopping app and mood diary (on Android) and a to-do app and video editor (on iOS). That video editing app, by the way, is CapCut and is also developed by ByteDance; CapCut is a TikTok video making app.

Downloads are a rough measure of capturing an app’s cultural impact, but there’s no question that TikTok has maintained its dominant position among social apps at the start of the year. It’s the place where new trends are born, pop stars are smashed and young people spend a dizzying amount of their time.

But while US teens spent their holidays installing TikTok on their brand new iPhones, US government officials were much more skeptical of the app and its Chinese parent company ByteDance. A movement to ban the app that started with Republican governors quickly spread to Congress, and now it’s banned from installing TikTok on devices owned by the federal government.

According to Reuters, 19 of the 50 states are now restricting access to TikTok on government computers, with most bans lifted over a two-week period last month. That’s in addition to school districts and other parts of the public sector, which have introduced their own restrictions.

Here is Paresh Dave at Reuters:

Jamf Holding Corp., which sells software to organizations to enable filtering and security measures on iPhones and other Apple devices, said its government customers have increasingly blocked access to TikTok since the middle of this year.

About 65% of attempted connections to TikTok have been blocked this month on devices controlled by Jamf’s public sector customers around the world, including school districts and various other agencies, up from 10% of connections blocked in June, according to Company.

In some cases, these are largely symbolic protests: relatively few government agencies had a significant presence on TikTok, and motivated hackers would likely have easier and more useful ways to monitor government targets than by accessing their TikTok data.

But amid an ongoing trade war with China, distrust of ByteDance is the rare technical issue on which Republicans and Democrats have reached a bipartisan agreement. The $1.7 trillion spending bill that President Biden signed Thursday contained a provision banning TikTok from devices under federal control; it is also banned in the House of Representatives and the Senate.

All of this raises a question that has seemed largely resolved since Trump left office: Could TikTok be banned in the United States, period?

Biden appears to be quite aggressive about Chinese technology

Trump tried, but failed, to forcibly divest ByteDance from TikTok and hand it over to one of his top fundraisers, Oracle CEO Larry Ellison. Biden has taken a less violent approach to his dealings with China, but ultimately proves it to be quite aggressive about Chinese technology: He has worked to prevent China from developing advanced chips, plans to limit US investment in Chinese technology, and will limit the ability of Chinese apps to collect data on Americans. (Guess who that last one is for.)

Since Biden took office, TikTok has been working toward a deal with the Council on Foreign Investment in the United States that would see ByteDance retain ownership of the company and put TikTok’s user data, recommendation algorithms, and corporate governance in a quarantine of sorts.

The company shared more details about its plans with Reuters just before Christmas. Here’s Echo Wang and David Shephardson:

To overcome these hurdles, TikTok has sought to provide the US government with new layers of oversight. It has expanded Oracle’s role to ensure TikTok’s technology infrastructure is separate from ByteDance, the sources said.

According to the sources, Oracle will review both app codes, which determine the look and feel of TikTok, and server codes, which provide functions such as search and recommendations. The reviews will take place in special “transparency centers” frequented by Oracle engineers, the first of which is scheduled to open in Maryland in January, one of the sources added.

TikTok has also proposed forming a “proxy” board that will allow the [US Data Security] division independent of ByteDance, the sources said. This division is led on an interim basis by Andrew Bonillo, a former US Secret Service agent, and until a security agreement is reached with the US, it reports to TikTok Chief Executive Shou Zi Chew.

A basic template for the deal was ready in August, a TikTok spokeswoman told me today. But the Biden administration has been slow to make a decision as several government departments and agencies disagree on how to proceed, Reuters reported.

In that regard, the story of TikTok’s future is familiar to anyone who’s followed the past half-decade of US tech regulation. Lawmakers hold hearings and legislate, but ultimately succumb to infighting and paralysis. Ultimately, the only changes we see will either come from regulation in Europe or competitive pressure from rivals.

ByteDance cannot afford a high-profile mistake

But while that has been the story for Facebook, YouTube, Twitter and others so far, TikTok’s position appears to be much more serious. Despite all the criticism Facebook in particular received during that period, it was never banned from federal government devices. And while banning TikTok for consumers would certainly cause a stir, Biden’s attitude in China so far suggests he may be willing to do it after all.

In such a difficult time, ByteDance cannot afford a high-profile mistake. And yet, in the days after more states began banning TikTok, an internal investigation found that ByteDance employees had used TikTok to record journalists’ physical locations using their IP addresses. It was apparently part of a leak investigation in which ByteDance was trying to get reporters’ sources — particularly sources for ForbesEmily Baker-White, who has broken a string of major stories over the past year about connections between TikTok and ByteDance.

According to material reviewed by Forbes, ByteDance tracked multiple Forbes journalists as part of this covert surveillance campaign, which was designed to track down the source of leaks within the company after a drumbeat from stories expose the companies running links to China. Following the investigation of the surveillance tactics, ByteDance fired Chris Lepitak, the chief internal auditor who led the team responsible for them. China-based executive Song Ye, who Lepitak reported to and who reports directly to ByteDance CEO Rubo Liang, resigned.

“I was deeply disappointed when I was made aware of the situation… and I am sure you feel the same way,” Liang wrote in an internal email shared with Forbes. “The public trust that we have built up enormously will be significantly undermined by the misconduct of a few individuals. … I believe this situation will be a lesson for all of us.”

As Baker-White noted, this represented a sharp turnaround from October, when ByteDance tweeted that “TikTok has never been used to ‘target’ members of the US government, activists, public figures or journalists.” Analyzing the physical locations of TikTok reporters in an effort to trace their sources certainly qualifies mine definition of targeting – and it met the definitions of many legislatorsat.

It’s hard to overstate the extent to which the TikTok espionage scandal has undermined the goodwill the company has built over the years through its transparency centers, public research APIs and similar leading measures. Drivers have been doing that for years openly mocked to the idea that their app could be used to monitor Americans. But in the end it was used for exactly that purpose. And even worse, it was used against the Americans trying to understand the relationship between ByteDance and TikTok.

“The misconduct of certain individuals, who are no longer employed by ByteDance, was a flagrant abuse of their authority to access user data,” the company told me via email. “This misconduct is unacceptable and inconsistent with our efforts on TikTok to gain the trust of our users. We take data security incredibly seriously and will continue to improve our access protocols, which have already been significantly improved and hardened since this incident happened.”

I hope that’s true. But as the movement to ban TikTok accelerates, the company can no longer plead innocence to charges of targeted surveillance. For a handful of reporters, “TikTok is spying on you” was the rare conspiracy theory that turned out to be true. And as 2023 progresses, that could give President Biden all the reason he needs to finish what Trump started.

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