Chinese-Owned TikTok has been in the news quite a bit the last two months and most of has not been good; from India to South Korea to Western Europe, and frequently the “unstable” Trump Administration.
TikTok’s dilemma is unlike any other Chinese app or social media company, in that nearly all its users are either – teens or pre-teens – and it is a Chinese tech company that is pretending to be an “international”, and more specifically a Silicon Valley “American” company.
By Ryan Carroll, Managing Editor
Analysis.
July, 2020.
TikTok vs the World: Beginnings: 2020 Sino-Indo Skirmishes / India App Bans
On June 15th what has been referred to as a “melee” broke out between Indian soldiers and soldiers of the Chinese People’s Liberation Army at the mountainous region of the Galwan Valley, at elevations up-to 14,000 feet, on the disputed Sino-Indian Border.
But, in reality, it was a battle of nearly 600 soldiers from both sides fighting in the dark for six-hours, using barbarous makeshift weapons (in 1996 saw an agreement banning the use guns and explosive at the disputed border), where 20 India soldiers where killed according to the Indian government.
The Indian government also claimed that 43 Chinese soldiers were also killed, and while China finally admitted to their commanding officer dying in the “melee”, according to a U.S. Intelligence Report 35 Chinese may have died in the incident.
These are the first deaths since the Sino-India War of 1962, but this incident had been building since May 5th of 2020 with:
As for the catalyst of the 2020 Sino-India Skirmishes there is probably a multitude of reason; from responses to India’s road and infrastructure building near the border, to the more overall consensuses that it is a “show of strength” during the COVID-19 Outbreak. Especially, with China’s first four months of poor handling of the outbreak in Wuhan, in an effort to to regain “face”.
Multiple skirmishes happened along the Sino-Indian border, not just the “melee” at the Galwan Valley. Near the disputed Pangong Lake in Ladakh and the Tibet Autonomous Region, and near the border between Sikkim and the Tibet Autonomous Region. Additional clashes also took place at locations in eastern Ladakh along the Line of Actual Control (LAC).
It also appears that China may have been using the situation of the COVID-19 outbreak gain territorial ground in the (LAC) disputed Sino-Indian Border. Though arguments can be made that both sides are at fault in the conflict, one side stands out at being more so that the other; China.
With one company, ByteDance, and its American subsidiary TikTok, taking the heat in the aftermath. Leading it into the spotlight that it may be a security threat to your teens and pre-teens data information, but not TODAY – as China plays the long game.
Data Collection on teens and pre-teens, not only in the United States but the Western World as a whole, along with our other allies in South Korea and Japan, that is being harvested by TikTok. Data that may not be shared directly to China and stored on servers in the Mainland, but is shared with Third Party sources that have all legal rights to share with China, and its government entities – according to TikTok and ByteDance’s own attorneys in U.S Federal Court documents.
Financial Loss for ByteDance – Loss of Face for Kevin Mayer
On June 29th India banned 59 Chinese apps but only two had any significance in the country TikTok and UC Browser (owned by Alibaba, and the second most used search browser behind Google and a small employer in India – but in the short, and long, term UC Browser is inconsequential in India), and it only took one day for TikTok to shut down in India. Followed by on August 7th India banned 47 more apps, while it is reviewing an additional 275 apps from China.
30% of TikTok’s users come from India accounting for 660M users in the Sub Continent, that were lost on June 30th, and it was projected that TikTok was going to gain another 150M users in India by the end of 2020. India itself was potentially the most fruitful future market for ByteDance, not just its subsidiary TikTok, as only 50% of the country is currently online.
UPDATE: TechCrunch reported on Aug 12th that Reliance and ByteDance began talking in June of Reliance taking over ByteDance’s operations in India, as their operations were said to be worth over $3BnUSD and have 2,000 employees in the Sub Continent. Reliance’s Jio Platforms have over 400M subscribers in India.
With the loss of Indian users, TikTok is looking to lose $6BnUSD for the remainder of 2020 from that market alone. The day after the app went down and Indian telecom companies no longer allowed the 660M users in India access to the app who already had the app on their devices, according to the Global Times of China:
[the] Chinese state-controlled media reports, TikTok owner ByteDance has invested more than $1 billion to build its vast Indian user base.
Forbes
Whether this $1BnUSD was spent in India or in China to build up the Indian user base is unclear, but the more important news that comes from the Forbes article is the statement from the newly minted CEO of TikTok, and COO of ByteDance LTD. (the Chinese company in Beijing) itself, Kevin Mayer. Who was the former Chairman of Direct-to-Consumer & International division at Disney, meaning he created and was the head of Disney+ and was thought to replace of Bob Iger as CEO of all of Disney, but was passed over (read our article here on Kevin Mayer joining TikTok).
“I can confirm that the Chinese government has never made a request to us for the TikTok data of Indian users,” CEO Kevin Mayer assured the Indian government. “If we do receive such a request in the future,” he added, “we would not comply.” That data, TikTok says, is stored in Singapore anyway, beyond the reach of Beijing.
Forbes
South Korean Seven-Month Long Investigation – TikTok Found Guilty & Fined Pre-Teen Data Collection / Data Sent to Two Foreign Countries
Kevin Mayer open letter to the Indian government on June 28th is a questionable deniability and culpability on the part of TikTok, as just two weeks after the Indian ban South Korea fined TikTok $155,000USD for collecting data on pre-teen children under the age of 14 without parental consent.
Over 6,000 pieces of data was illegally collected of South Korean children, and was not only sent to one foreign country but two: the United States and Singapore. All 6,000 pieces of child data collected by Chinese-owned TikTok, which is incorporated in the Cayman Islands as a VIE (Variable Interest Entity), are stored on data-servers not on Korea soil.
South Korea’s investigation began in October of 2019 and ended in July of 2020 with a fine of $155,000 dollars, and investigation that lasted 7 months and collected 6,000 pieces of data from underage users in South Korea.
The number of South Korean pre-teens and teens using TikTok pale in comparison compared to their United States and Indian counterparts, as South Korea only has 3.5M users in total compared to:
Children ages 4 to 15 in the U.S. UK and Spain spend an average of 80 mins watching videos on TikTok compared to 85 minutes per day on YouTube.
TechCrunch via data in the annual report by digital safety app maker Qustodio.
South Korea is not the only country to discover a violation of pre-teen data collection by TikTok and take action against the giant Chinese-own social media company. In 2019 the United States also found TikTok collecting data from children under the age of 13, to which:
TikTok agreed in February [2019] to pay a $5.7 million fine to the Federal Trade Commission over allegations the app illegally collected personal information from children under age 13 without parental consent, in violation of the Children’s Online Privacy Protection Act, Business Insider previously reported.
Business Insider
On July 7th the FTC stated that they are, again, looking into TikTok for not living up to the February 2019 agreement of protecting children under the age of 13 data and privacy rights.
TikTok’s abuse of collecting data from pre-teens from all around the world appears to be continuing, with even concerns that the data is going back to China. Though, CEO Kevin Mayer has publicly stated that all data is stored in servers here in the United States with back-ups in Singapore, but later in the article we will dive into official statements in court from TikTok attorneys in the U.S. that contradict what Mr. Mayer states. Though, it has nothing to do with Chinese servers.
But, first, a little more about China’s backdoor technology policies for American firms doing business in China (yes, this is a real thing! And, a law.), and on why TikTok is an actual threat compared to any other Chinese tech company such as Alibaba or Tencent. Which operates the social media app WeChat (called Weixin), that I will say is “not-a-threat” simply because no one uses it here, and the scope of the Trump Administration’s Clean Network initiative is beyond this article.
This did not stop Trump on August 6th from issuing an Executive Order by invoking the International Emergency Economic Powers Act (IEEPA), stating that TikTok and WeChat has 45 days before a ban on any transactions with the two apps.
Now this is technically not a “ban” of either app in the United States but a way to undermine their abilities to make money money here, though for WeChat this is really not an issue as it only has 19M daily active users in the U.S. according to data firm Apptopia, and their advertisement revenue comes from China. (UPDATE: I wrongly put 1.5M Americans use WeChat, I pulled that figure from a wrong source)
I am skeptical about the 19M DAU as even though I am on WeChat I am not on it every day. This figure is more likely ‘registered users’ as there is only 6M Chinese diaspora in the United States, plus 370,000 students, who would be on it daily users, as WeChat is their primarily way of communicate back home to China. Among, a whole host of other uses, as a super-app.
But, for TikTok, it effectively will cut off all forms of revenue streams, ie. advertising, unless they make a sale to an American company within the 45 day window. Which will most likely to be Microsoft, now at a favorable price to the tech giant, or possibly Twitter who has joined the ring. Or, a combination of the two?
The problem with all of this is that Musical.ly (a Shanghai company, but the app was focused essentially on American teen users) has been in the U.S. with tens of millions of users since 2016. With its merger and creation of TikTok, under the Chinese tech giant ByteDance in 2018, the app been collecting data on 100M Americans – mostly teens and pre-teens.
Billions, if not trillions, of data points have stored on servers not just in the United States, but abroad in Asia, and have legally shared with third party sources. Who have no obligation in not sharing the data with Chinese entities or its government – to which we will dive into later.
UPDATE: Trump on Aug 14th signed a new Executive Order stating that CFIUS in 90 days would remove TikTok’s stake in Musicial.ly how this will effect Microsoft or Twitter’s takeover is unknown.
China’s Backdoor Into TikTok
I posted an article on LinkedIn Publishing (when that was still a thing) tilted Tim Cooks’ Focus on “Apple China” Supersedes User’s Data Risk on Feb. 21st 2018, that unlike all my other articles at that point, it never took off….. When some new “Apple China” news broke, I re-edited and polished off the article and re-published it here as There is No Apple, Only Apple China.
Highlighting the progress that Tim Cooks’ Apple has turned into a China backdoor spy surveillance tool, that he was fully aware of for profit and global (ie. I mean China market) expansion.
But, no one really, truly, took me seriously.
In this coming month’s issue of The Atlantic they have written an article on China’s Artificial Intelligence, surveillance, the One Belt, One Road Initiative, and using cheap dept and cheap tech to sell backdoor access to countries of influence; like never before.
In the early aughts, the Chinese telecom titan ZTE sold Ethiopia a wireless network with built-in backdoor access for the government. In a later crackdown, dissidents were rounded up for brutal interrogations, during which they were played audio from recent phone calls they’d made. Today, Kenya, Uganda, and Mauritius are outfitting major cities with Chinese-made surveillance networks.
The Atlantic
This example was years ago and in a third world country targeting Chinese dissidents, but looking at the two post from the China Law Blog here and here they highlight the fact that Chinese companies must adhere to one simple rule: allow a backdoor access for the Beijing Central Regulators at all time, or else. There are no borders to this rule, and this is why when Tencent has bought up foreign companies, mainly gaming, they have remained autonomous and allowed them to continue their business as if they are ran as a foreign entity. This is also why Alibaba has not expanded into many territories beyond Southeast Asia.
But, ByteDance and Zhang Yiming is the exception. His drive to create an “international” company supersedes that of the Two Mas, Pony Ma and Jack Ma of Tencent and Alibaba, and why he poses the greatest threat to Western National Security than ever before.
American Teens Making “I Love China” Videos and How China May Take Advantage of It & #IAtePasta and #ShampooAndConditioner
Why we should be concerned about TikTok as a “Future” National Security treat, and how it has nothing to do with the recent security findings in June that TikTok utilizing clipboard on iOS can access all of your connected Apple devices to grab all your data, after 1-3 keystrokes; from passwords, cryptocurrency wallet addresses, account-reset links, and personal messages.
In true TikTok form this problem occurred earlier in the year, also on Android devices, that TikTok blamed as a glitch and said that they had fixed, but both Apple and a independent security firm confirmed that this issue was deliberately still going on. With the problem still operational.
But, this is not the Future National Security treat that TikTok poses to the United States or other Western countries, in how it may disseminate data back to China. As Joe Bob’s cryptocurrency wallet information being known to the Chinese, holds little value to their Soft Power.
What TikTok has to offer is the wealth of teen and pre-teen data, especially psychological data. TikTok is even providing research for papers at the university level, and future books, on the psychology of teens and pre-teens in the United States, granting professionals access to them in masses that they have never had before. Meaning that via third party sources TikTok grants access to their data, allowing China and its vast entities access to this data as well (more on this later), and not a single data point is ever stored on servers in Mainland China. Just as TikTok, ByteDance, and CEO Kevin Mayer have stated – because there is no reason that it needs to be.
There are two concerning factors that have come to my attention over the course of the COVID-19 lockdown here in the United States, that has taken place specifically on TikTok by young Americans. Something that China could utilize as a potential Soft Power tool in the coming decades as these Americans come of age.
Firstly, is the “I Love China” satirical videos that many American Gen Z’ers have been making in recent months, in the hopes that it will either; boost their visibility on the app and get them featured in the app’s “For You” feed, or that they believe they have been shadow banned, and it will get them out of the “shadow ban” in a favorable position with the Chinese algorithm.
The #ILoveChina along with #ChinaIsAwesome really took off in April with hundreds of videos going up on TikTok. Many with American teens standing in front of images of the Chinese flag, the Chinese national anthem playing in the background, and some even kissing images of President of Xi Jianping. With the hope of playing towards the Chinese created algorithm, which TikTok shares lines of code with its sister app Douyin in Mainland China.
“My views were going down so I wanted to see if a video that praises China would do well in the algorithm and oddly enough it did,” Matt Norris, a 19-year-old TikTok user in the US, told Quartz. Norris, who has about 9,000 followers on the app, saw his China video—in which he says things like, “I love China… Xi Jinping is my bff” in fluent Mandarin—become one of his most popular clips….Some users have added the #ilovechina hashtag to videos that have nothing to do with China, perhaps because it has garnered nearly 50 million views as of Thursday (May 28).
QZ.com
This is not a one-off instance where a user has created a meme video that the platform turned viral, but a trend by a Chinese app, impersonating an American one, potentially pushing videos that reflect China’s Soft Power image.
The 13-second video, posted in April, shows Mr. Asaday in front of the Chinese flag while the country’s national anthem blares. Pointing to a photo of Xi Jinping, the 23-year-old calls the Chinese leader “my president.” By mid-May, his account skyrocketed from 2,000 fans to over 90,000. “I’d never seen any type of growth on my page until I made that joking video,” he said.
WSJ
This is the type of growth and influence China has been seeking since it entered the world stage at the turn of the 21st Century, something that it hoped its box-office would achieve but as it puts so much bureaucratic control over the content that reaches cinemas, that will never be the case.
Tech companies with little to no regulations in the U.S. (just look at Facebook with their allowance of Russian election interference and White Supremacist propaganda) have become the gateway for China’s Soft Power grab, but with only TikTok so-far penetrating the American zeitgeist.
One that they are willing to sit on data for decades before taking advantage of, as this is what China is good at. Creating 5, 10, even 15 year plans, something that the CCP can do being led by a centralized Politburo.
What concerns me the most about the #ILoveChina videos in the short-term is not China, but the psychological impact that they may impart on the already vulnerable teens and Gen Z generation. In terms if they, see a drop in their views / followers after they stop making “I Love China” videos.
The long-term effects would be, China utilizing the knowledge that they have; placing bots to follow them or actual agents to co-opt them into being more favorable towards the CCP.
The psychological impact, plus the vulnerable state heightened by the pandemic, and the fact that TikTok is a platform used by teens as a platform format to reach out to highlight their growing state of depression and anxiety is very well known in the professional community.
It has grown so much that there are even professional therapist and counselors who have Influencer status on platforms such as TikTok, creating mental health videos aimed at teens who are also reaching out to them for advice.
Licensed counselor Lindsay Fleming, L.P.C., who has nearly 150,000 followers on the app, says that most of her messages come from teenagers who are struggling with their mental health and feel uncomfortable seeking help elsewhere…..Therapist Micheline Maalouf, L.M.H.C., has over 160,000 followers on TikTok. “Some people said that my videos were the reason they decided to seek help from a therapist,” she tells Bustle.
Bustle
While licensed professionals providing sound advice on TikTok is one thing, American teens posting highly private and sensitive information about their lives, is prized data for a Chinese company to collect for future use.
Recently, Gen Z-ers have been opening up about depression with seemingly innocuous phrases like “I finished my shampoo and conditioner at the same time” or “I ate pasta tonight.” The phrases come from a poem by Hannah Dains, titled “Don’t Kill Yourself Today.” Gen Z-ers have co-opted these lines to express feelings of depression, anxiety, or suicidality in videos that have garnered millions of views.
Bustle
In the pre-coronavirus pandemic lockdown:
A 2019 study published by the American Psychological Association, 91% of Gen Z-ers report having experienced one physical or emotional symptom of stress or depression, and are more likely to say their mental health is fair or poor.
Bustle
This study and the extensive use of TikTok for mental health outreach by the use of teens highlights the fact that those Gen Z’ers who have made the “I Love China” videos are potentially in a vulnerable state of being preyed upon by the Soft Power of the CCP. If they decided to use it.
Which is why I propose a government funded research grant is needed to study the long-term effect of the “I Love China” videos created on TikTok, for both National Security and teen psychological health, as even with the sale to a company such as Microsoft Corp. or Twitter this would not be the end of this story.
Now some may argue that I am being either; a little paranoid or overly Hawkish, to which I would say, neither. I may be a China Watcher and sometimes a China Hawk on certain issues, but I did work for the Chinese government on two occasions during my seven years of working there. First, as a Warner Brothers’ employee in their joint venture with the state-own China Film Group, where I worked only with the China Film Group employees – who I trained. Then I was a direct employee of the National Bureau of Statistics of China in Beijing, where I walked directly into one of their state-owned buildings several days a week. And, I have still passed two FBI background checks to work for our own Federal government here in the U.S. along with working with the State of Arkansas and the University of Arkansas – to which they know I was in China.
To those who have written on “There is Still No Proof TikTok is Spying On Us” articles your own tech advisers and arguments both fall flat, and your own argument that TikTok uses antiquated code in its security (unsecured HTTP), while uses sophisticated code to track data and AI facial recognition. Highlights that something is going on behind the scenes.
Federal Class-Action Lawsuit / AI / Data Tracking of Minors
NPR reported on August 4th that several families representing dozens of minors (meaning children) are:
alleging that the video-sharing app collects information about their facial characteristics, locations and close contacts, and quietly sends that data to servers in China. Twenty separate but similar federal lawsuits were filed over the past year on behalf of TikTok users in California, where the company has offices, and Illinois, which requires that technology companies receive written consent before collecting data on a person’s identity. The suits now have been merged into one [sic] and U.S. District Court for the Northern District of Illinois [sic] by Judge John Z. Lee
NPR
If it proceed this could be incredibly detrimental to TikTok and its parent company ByteDance, but most likely will not halt the sale to Microsoft, Twitter, or whoever. Though, like Trump’s recent Executive Order this will probably provide leverage for the American tech companies in the negotiations, even though its foreign VC investors (Sequoia, General Atlantic, and Softbank, among others) who have invested around 70% of ByteDance’s equity valued TikTok at a ridiculous $50BnUSD when they were seeking a takeover bid.
[As] a lawsuit filed under the same Illinois law against Facebook over its use of facial recognition technology recently prompted the social network to agree to a record data-privacy settlement of $650 million. Legal experts said, if the court approves the TikTok lawsuit as a national case, the settlement sum could exceed the Facebook payout. [Under] the Illinois law, known as the Biometric Information Privacy Act.
NPR
Earlier in the article I talked about “Billions, if not trillions, of data points that they currently have stored in servers not just in the United States, but abroad, and have legally shared with third party sources (who have no obligation to not share with Chinese entities or the Chinese government – to which we will dive into later).” Well, this is that point, and it comes down the TikTok / ByteDance’s attorney’s to U.S. Federal Court on the record stating:
TikTok’s legal team also argues that the company can transfer data to Beijing, if it so chooses, without breaking any laws…..”The App’s privacy policy also fully discloses that user data will be shared with TikTok’s corporate affiliates and third-party business partners and service providers, as is standard with free social networking apps that have a business model based on advertising,” TikTok lawyer Tony Weibell wrote in a submission to the court.
NPR
TikTok’s CEO Kevin Mayer is correct when he stated that China never asks for data directly from TikTok, as it does not need to. TikTok provides all its data to third parties, which then turns around and hands it back over to the CCP and other entities of the Chinese State.
It also states that TikTok may share any and all data with “corporate affiliates” meaning other companies owned by ByteDance around the world, that are not named ByteDance, who may then share all data with ByteDance itself. So, third-part party partners and service providers are not even needed to hand the sensitive teen and pre-teen data back to China and its entities.
Findings of technology experts hired by the plaintiffs’ attorneys. Those experts, who studied the collection and journey of TikTok data, claim troves of information are being sent to servers in China “under the control of third-parties who cooperate with the Chinese government,” according to the lawsuit…..”Such information reveals TikTok users’ precise physical location, including possibly indoor locations within buildings, and TikTok users’ apps that possibly reveal mental or physical health, religious views, political views, and sexual orientation,” attorneys for users wrote in legal filings.
NPR
Why is China collecting data on American teens? Their psychological health, physical health, religious views, sexual orientation, and political views? As power tools to be used in future Soft Power events when they deem necessary. Russia’s 2016, and current, election meddling is nothing compared to what the Chinese spy agencies are doing with teen social media data gathering for future use, and it is beyond scary.
Even with a sale of TikTok, the damage is already done.
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Nota Bene: “Non-American TikTok” vs the World (Primarily Europe)
I began writing this article at the end of July and as I was set to finish the last section of it before publishing, was when Donald Trump began railing on about potentially banning TikTok over the weekend. The news kept coming, but the core thesis, outline, and argument for this article remained the same; something I have been developing since I read the article in Quartz of American teens making “I Love China” videos on TikTok, and how this could not only be detrimental to their mental health if their video views / likes went up or down.
But, more importantly, how China may use this type of influence as a form of Soft Power later on down the line. By manipulating these very teens, via algorithm of how this videos and TikTok feeds overall perform, placing a positive light on a Chinese major tech company and in return the CCP themselves.
One thing that should be noted about the Microsoft, or should I say potential Microsoft purchase of TikTok is that it is only for the U.S., Canadian, Australian, and New Zealand markets, and nowhere else. It would not be for TikTok internationally for for even TikTok in Western Europe.
Just as Microsoft was in talks acquire TikTok is the aforementioned regions, rumors that TikTok was also moving ahead with talks to move their international headquarters office to London.
If TikTok is found guilty in American Federal Court under the Biometric Information Privacy Act, wait until they have to face Europe’s much more stringent GDPR! Don’t expect me to write about that.
Even the Former Intelligence and Operations Director at the British Secret Intelligence Service, MI6, and leading expert on China’s cyber threat at the International Institute for Strategic Studies, warns not to use TikTok for security reasons.
With data from Ofcom figures showing almost half of eight to 12-year-olds are using it.
The story has yet to end as the “international” version of TikTok will continue on.
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CORRECTION: In an earlier post we stated that India had 660M TikTok users, that was incorrect. India has 660M internet users as of 2020.
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Stay Tuned China Watchers!
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About the Author
Born and raised in the Missouri-Ozarks Ryan studied Film Production, and East Asian Culture, at the University of Kansas where he was a UGRA recipient that led him on a seven-year long, Journey From the West, to China. Where he worked with Warner Brothers, the China Film Group Corp. and the National Bureau of Statistics of China. Before returning to the States, where he specializes in Chinese Anime & Comics, China’s Box-Office, and Chinese entertainment-tech industries. He has a dog in China, Abigail, and a dog in the Arkansas-Ozarks, King Blue, who help ease his anxiety of suffering from the “Two-Dimensional Complex” that is trying to understand the Culture Industry landscapes of the Middle Kingdom.
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