School by Zambezi: The State of TikTok

Background

TikTok is under a lot of scrutiny right now, making headlines and stirring up controversy amidst privacy concerns. TikTok commands the attention of 150 million American users, which is 45% of the U.S. population, making its safety measures highly important and crucial to national security. On March 23, TikTok’s CEO, Shou Zi Chew, testified in front of Congress in favor of maintaining his ownership of the app and denying claims to leaking user privacy data.  Below we have included details about and implications of this ongoing legal battle, to ban or keep TikTok available in the U.S.

The Key Takeaway:  National Security Concerns Could Lead to Ban

TikTok User Security has the U.S. President’s attention. Looking back, Former President Donald Trump's administration issued executive orders designed to force ByteDance into divesting its TikTok U.S. operations, though nothing ever happened; President Joe Biden signed an executive order in June 2021 that threw out Trump's proposed bans on the app. Fast forward to this month, and the Biden administration is demanding TikTok divest its American business from its Chinese parent company, or else risk being banned in the U.S. In response, Chew said such a divestment wouldn't solve officials' security concerns surrounding TikTok.

TikTok’s Future Remains Unclear After CEO’s Appearance Before Congress. Chew was pressed on various aspects, relating to TikTok’s past actions on censorship (i.e. whether it censors content critical of the Chinese Communist Party), its accessing of U.S. user data to track journalists, its algorithm, youth safety aspects, and more. For the most part, Chew was able to navigate the various questions without making any definitive commitments. But at the same time, his appearance wasn't overly assuring, or convincing, in regards to winning over U.S. senators with his claim that banning TikTok is a first amendment violation. Chew characterized TikTok as a platform that encouraged creativity and free expression. After the hearing Chew stated, “TikTok will remain a place for free expression and will not be manipulated by any government.”

Is The Possibility Of Project Texas Enough to Save TikTok in the U.S.? Lawmakers at a House hearing that ran for more than five hours pummeled TikTok CEO Shou Zi Chew over the popular app’s ties to China and Beijing’s potential influence. The bipartisan skepticism further clouded the future of the platform and shed little light on how Congress might address the numerous problems that lawmakers highlighted. TikTok's plans to work with Austin-based Oracle, through a partnership known as "Project Texas" isn’t swaying politicians. To avoid a ban, TikTok has been trying to sell officials on a $1.5 billion plan that routes all U.S. user data to Oracle. Under the project, access to U.S. data is managed by U.S. employees through a separate entity called TikTok U.S. Data Security, which is run independently of TikTok's Chinese parent company, ByteDance, and monitored by outside observers.  During the hearing, lawmakers were largely skeptical, and even pushed back on the plan. Before the hearing, China said it would strongly oppose any attempt to force TikTok’s Chinese owners to sell their stakes in the video-sharing app. U.S. lawmakers pointed to that statement as evidence that TikTok was beholden to Beijing.

U.S. Citizens Are Split On Banning Tiktok. The biggest decider of who backs a TikTok ban? If they use TikTok. More Americans back a TikTok ban than oppose one, with a majority expressing concerns over the company’s links to China, underscoring that distrust of the foreign-owned app has spread beyond Washington, even as its domestic user base soars. A Washington Post poll finds that 41 percent of Americans support a federal ban of the popular short-video app, while 25 percent say they oppose it. And 71 percent are concerned that TikTok’s parent company is based in China, including 36 percent who say they are “very concerned.”

75% Of Marketers Expect To Spend More On Tiktok Even As The Ban Looms. Despite security concerns and the possibility of a ban by the U.S. government, three in four marketers expect to increase spending on TikTok in the next 12 months, according to a Capterra survey of 300 marketers at businesses in the U.S. A TikTok ban would have a moderate to significant impact on achieving social media marketing or advertising objectives, according to 82% of respondents, with 70% expecting to expand in other digital channels outside of social media in the event of a ban.

Our Suggestion: Proceed with Caution

TikTok  shutting down in the U.S. seems unlikely and would be an unprecedented act by the U.S. government. However, heightened national security concerns along with increased platform popularity equal a new political playing field. However, the jury is still out on if Chew’s arguments that banning TikTok is a first amendment violation will be enough to keep Congress from banning the app in the U.S. which would affect 45% of the population. Brands should continue to use the app with caution, understanding that the U.S. government could ban the app, which would leave allocated dollars, resources, and future content/activation plans on the app in limbo, leaving room for marketers to invest in other channels. 

Research and Write Up by Jasmine Green

Source: Insider | Social Media Today | Insider | Insider | Insider | Marketing Dive | Reuters | AP News | The Washington Post | Statesman | CNN

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