The use of the Chinese own app known as Tik Tok in the United States continues to be controversial.

The app has been popular among American teens as a means to create homemade karaoke and other short-form videos. Originally developed by an American company named Musical.ly, the technology was acquired by ByteDance, a Chinese company that was about seven years old when it purchased it in November 2017.

The U.S. government had voiced its objection to the sale and asked the Committee on Foreign Investment in the United States to review the purchase. The committee is a federal panel that reviews acquisitions of products from American companies on national-security grounds. Ever since the purchase was being considered, many people involved in the security wing of America’s defense program believe that the sale of Tik Tok to a Chinese company represents a possible threat to the country. Although the investigation is confidential, there are people who say that the American government has evidence that the app is sending data to China.

The issue surrounding the sale is just part of a plethora of other issues involving the U.S. relationship with China. For example, both nations are major competitors in the creation of popular technologies used by teenagers around the world. Both countries would like to dominate this aspect of the world’s economy. In addition, the relationship between the two countries has been adversely affected by the trade policies of the United States toward China. The Trump Administration has been working to develop a trade deal with China, but the sides are in an impasse that has been elevated by the slapping on of tariffs by both countries. Add to that the Coronavirus that originated from China and the Trump Administration is skeptical of anything in which the Chinese government may be involved.

Nearly 60 million people in the United States and Europe were using the app at the time when ByteDance merged with the U.S. Company Musical.ly. To try to placate the objections of the Trump Administration, ByteDance has promised to keep the app separate from its inventory of apps.

About a year has passed since the initial dust storm began swirling around Tik Tok. In the meantime, the app has been downloaded more than 750 million times. That’s more than Facebook, Instagram, YouTube, and Snapchat has been downloaded during the same period of time. So says the research firm Sensor Tower, which monitors things like this.

Traditionally, China has prevented foreign companies from introducing apps to their country. However, Chinese companies have been able to introduce their own cutting edge technologies to the United States and other countries worldwide. These products continue to rise in popularity.

This is not the first attempt by the Trump Administration to block a sale. For example, the U.S. blocked Broadcom; a company based in Singapore, from acquiring Qualcomm, an American company that manufactures computer chips. Ant Financial’s attempt to purchase Moneygram was also crushed.

Moreover, the Trump Administration has placed Huawei and other Chinese tech companies on a blacklist to prevent them from acquiring American products because of national security and human rights issues.

In the background to all of this, U.S. government officials have been extremely concerned over a Chinese national intelligence law passed in China that required Chinese companies to comply with intelligence gathering operations, if asked by the government to do so. China has countered that it expects its companies to comply with local laws when involved overseas.
Users do the vast majority of the videos created on Tik Tok in western nations. Tik Tok is not available on Mainland China, although ByteDance does offer a similar app known as Douyin there.

New concerns in the United States have increased because there has been very little if any reports on the protests in Hong Kong on the app. In addition, it has been reported that Tik Tok moderators have been ordered to censor videos that have political themes. ByteDance countered that the Chinese government is not involved with the app and did not require the censorship of content. The company in China said that its policies concerning the United States are formed by Americans and is not influenced by any government.

A former moderator for Tik Tok was interviewed and said that U.S. managers instruct them to hide political messages or themes, not just those concerning China. The moderator added that political posts are stored on users’ profile pages, but are not shared widely in the Tik Tok main video feed. He concluded that he had never been told to censor content concerning China.

ByteDance said that it hired a consulting firm called Special Counsel, based in Colorado, to determine if the app sent out user data. Their study concluded that there was no way that user data could be sent to China.

Data on Tik Tok users, including videos, names, dates of birth and other data was stored exclusively on computer servers in Virginia and Singapore.

To improve its reputation in the United States, Tik Tok has joined NetChoice, a trade association, and has hired Covington & Burling, a corporate law firm that also represents Facebook as well as other tech firms. The firm advocates for Tik Tok. The company has also hired K&L Gates, a law firm to assist in drafting its restraint policies.

There has been some corporate blowback. For example, Wells Fargo has banned its employees from using Tik Tok on company devices,

Despite talk that Tik Tok is a Trojan horse offering cover for the Chinese Communist Party to spy in the U.S., U.S. government officials have offered no proof for the claims. Their only argument to have any traction is that a Chinese company owns the app.

President Trump has said that he wants to ban Tik Tok and prevent an American company from buying it beginning September 20th. In recent weeks Microsoft has shown interest in purchasing the app and operating it in the U.S., Canada, Australia, and New Zealand. Microsoft has said that it promises to conclude discussions concerning a purchase by September 15th.

India has said that it will ban Tik Tok. It’s announcement came soon after a border skirmish between India and China.

Benefits to Microsoft for buying Tik Tok include:

• A gain for its ad revenues.
• An opportunity to enhance its cloud capability.

Tik Tok’s ad revenue for 2019 was $20 billion. It projected ad revenue from India to be $1 billion in 2020.

Besides Google and Amazon, Microsoft is one of the biggest players in the cloud. It has the infrastructure to operate Tik Tok and is already running LinkedIn, GitHub, and Minecraft. LinkedIn’s ad revenue grew 10 percent in the second quarter of 2020.

So the big question is: Will Microsoft purchase Tik Tok before the Trump Administration deadline of September 20? Stay tuned!