Quick Bites | Dancing around with TikTok

The other week, TikTok’s chief executive Shou Zi Chew was called before a US congressional committee to defend the popular social video app in yet another example of growing China US tensions. Chew tried to convince hostile US legislators that the app will be kept “free from any manipulation by any government”, as he struggled to head off a potential US ban. But he didn’t have much success.

TikTok has become a flashpoint in rising antagonism between the US and China, uniting Republicans and Democrats in Washington concerned that it could be used to steal sensitive US data. Before the hearing, China’s commerce ministry hit out at a US demand that the US arm of TikTok should be separated from its Chinese owners.

And the US is not alone in its concerns. The Albanese government is considering recommendations from the Department of Home Affairs’ review into security risks posed by social media use. It is expected to ban TikTok across all government devices, according to the Sydney Morning Herald.

Source: Business of Apps


TikTok Australia is owned by TikTok Ltd, which is registered in the Cayman Islands. TikTok Ltd is owned by ByteDance, the Beijing-based entity that is domiciled in the Cayman Islands. Some commentators claim ByteDance has strong links with the Chinese Communist Party (CCP).

TikTok is under scrutiny in many jurisdictions over concerns that the CCP could have access to data generated by the app’s 1 billion worldwide users and will use it to compromise national security. The Biden administration last week told TikTok it would ban the app unless its foreign shareholders sold the company. A ban on TikTok for Australian government-issued phones would follow similar moves in New Zealand, the US, and European Commission.

TikTok has taken measures to respond to the US concerns, spending about $2 billion on a partnership with Oracle designed to safeguard data and content from its 150 million American users from Chinese influence.

Chew, a former Goldman Sachs banker, emphasised that he was from Singapore and had a US-born wife. He conceded that in the past, employees at Beijing-based ByteDance were subject to Chinese law that would have compelled them to cooperate with state intelligence work. However, he added that its partnership with Oracle, known as Project Texas, would create a firewall, meaning that was no longer the case for TikTok staff.

None of this political dancing around is positive for global business and trade, which requires a degree of trust. And as we’ve seen with the recent banking crisis, once trust disappears, it is very hard to get back.


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