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06/29/2022

TikTok comes under new U.S. scrutiny

Dan Berthiaume
Senior Editor, Technology
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The FCC wants the TikTok app removed from major app stores.

A change in U.S. presidential administrations has not ended serious governmental concerns over TikTok.

A letter to Tim Cook, CEO of Apple, and Sundat Pichai, CEO of Google parent Alphabet, posted on the official Twitter account of Federal Communications Commission (FCC) commissioner Brendan Carr, publicly calls on the two companies to remove the China-based TikTok app from their app stores by July 8 or provide the FCC a statement explaining why they want to continue offering it to U.S. consumers.

“TikTok is not just another video app,” Carr said in the tweet. “That’s the sheep’s clothing. It harvests swaths of sensitive data that new reports show are being accessed in Beijing. I’ve asked Apple and Google to remove TikTok from their app stores for its pattern of surreptitious data practices.”

In his letter, Carr referred to a recent BuzzFeed article which cites leaked audio from internal TikTok meetings in Beijing that indicates China-based employees of TikTok’s Chinese parent company ByteDance have had at least some access to private data of American TikTok users.

The audio also reportedly indicates that despite contrary assurances to the U.S. Senate from TikTok executives, a U.S. security team does not have control of U.S. user data and that U.S.-based employees cannot independently obtain access to or track data from U.S. users.

In an official press release dated June 17, 2022 (the same date the BuzzFeed report was initially released), TikTok said 100% of its U.S. user traffic is now being routed to U.S.-based Oracle Cloud infrastructure as a default storage location. The company said it will still use its own U.S. and Singapore data centers for backup, but expects to delete U.S. users' private data from its own data centers and fully pivot to Oracle cloud servers located in the US. The company said it is also working with Oracle to develop data management protocols for U.S. users that Oracle will audit and manage.

TikTok attracted Trump attention

U.S. governmental concerns regarding TikTok re nothing new. Citing possible ByteDance connections to the Chinese Communist Party, the Trump administration had been actively attempting to ban TikTok from operating in the U.S. unless it established a separate business with at least partial U.S. ownership.

In September 2020, Oracle and Walmart received tentative U.S. approval for a joint 20% acquisition of a new business that would be called TikTok Global. However, with the change in presidential administrations in January 2021, ByteDance lost interest in the Trump-sanctioned Oracle/Walmart deal, and began seeking to develop an alternative structure to its U.S. operations.

The nixed deal, which followed reports that the Biden administration was pausing an effort to force TikTok to sell its U.S. business, would have seen Walmart enter into commercial agreements to provide e-commerce, fulfillment, payments, measurement-as-a-service advertising, and other omnichannel services to TikTok Global.

Security concerns have not so far stopped U.S. consumers or retailers from actively pursuing shopping-related activities on the platform, which focuses on user-generated short-form videos. Retailers including Walmart, Saks and Instacart have partnered with TikTok, and Bazaarvoice data indicates TikTok shopping levels grew 567% in 2021.