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TikTok faces possible ban or sale as concerns about data privacy mount



Crossroads for TikTok

The future for TikTok is uncertain, amid concerns over data privacy and the possibility of a US ban. CFRA analyst Angelo Zino said that the prospect of an “outright sale or ban is looking increasingly likely in the next 12-18 months”.

Segregation plans fail to reassure

Previously, TikTok’s owners ByteDance had intended to remain one company, but segregate data for US users. This was to be held in a separate US-based facility run by Oracle, with requests for the data processed via a security board. This project, known as “Project Texas”, failed to reassure lawmakers as to its adequacy.

Pressure for sale or spin-off

US security body, the Committee on Foreign Investment, was concerned about the possible impact on national security of ByteDance retaining its US subsidiary. It has therefore pressured the company to spin off or sell it to an American business. The Chinese government, meanwhile, has said it opposes any sale of the app.

A ban may face challenges

A ban on TikTok faces challenges, as the platform and users may challenge it in court. Apple and Google, which run smartphone infrastructure in the US, would need to remove TikTok from their stores — with the latter also needing to stop updating the app. Users could still access TikTok content, but this could be technically challenging.

Short list of suitors

American software company Oracle is the favourite to purchase TikTok, given its role in the “Project Texas” segregation project. However, it may be difficult for other companies to amass the funding required to purchase TikTok, estimated to be worth between $40bn and $100bn.

Antitrust scrutiny likely

Any deal to purchase TikTok would also face scrutiny from antitrust regulators, further complicating the bidding process. Industry insiders have suggested that Microsoft could also be interested in acquiring TikTok.

Ban would be unprecedented

A move to ban the app would be without precedent, according to law and technology experts such as CFRA’s Angelo Zino. He commented that this would “absolutely draw the ire of the Chinese government”.

Ban would be unconstitutional, warn activist groups

Activist groups including the American Civil Liberties Union and the Electronic Frontier Foundation have warned that a ban on TikTok would be unconstitutional, denying Americans the freedom to access information in a format that they enjoy. They add that other platforms with connections to foreign governments, such as Facebook, have been implicated in data-sharing scandals, and so are equal candidates for a ban.

Concerns about Chinese links

Politicians have cited concerns that Chinese control of TikTok could lead to the platform being used as a way of stealing sensitive information from Americans, or spreading propaganda. TikTok tracking technology has also been found embedded on state websites, with experts warning that this technology could relay spyware and other malicious software to American citizens. Executives at TikTok have previously accessed personal information about journalists to locate a data leak, prompting privacy concerns.

Time for stricter data regulation

Experts have suggested that the TikTok debate has highlighted the need for stronger privacy regulations. There are currently no laws within the US preventing apps from sharing user data with third parties. The Institute of Assured Autonomy has called for a review of data sharing across all industries to ensure user privacy.




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