April 06, 2023

Written by Kurt Anagnostopoulos

The TikTok Controversy: Advertiser Q&A

By Kurt Anagnostopoulos and Mark Smith

Will TikTok get banned in the United States? And why is TikTok even running afoul of the U.S. government? Those questions and many others continue to arise as TikTok faces closer scrutiny by U.S. lawmakers – mostly recently when the company’s CEO recently faced a tough grilling by members of Congress. Following are answers to some questions you might have.

What is going on with TikTok and the United States government?

TikTok has faced several controversies and concerns regarding its ownership, data privacy, and potential national security threats in the United States.

TikTok is owned by ByteDance, a Chinese company, which has raised concerns about Chinese government access to user data and censorship. There have been concerns that TikTok is collecting user data and sharing it with the Chinese government. TikTok has denied these allegations and has stated that its data is stored outside of China.

In 2020, former U.S. President Donald Trump signed an executive order that would have banned TikTok from the United States over national security concerns. The order cited TikTok’s ownership by ByteDance and its potential to collect data on U.S. citizens and share it with the Chinese government. In June 2021, new president Joe Biden signed an executive order revoking the Trump administration ban on TikTok, and instead ordered the Secretary of Commerce to investigate the app to determine if it poses a threat to U.S. national security.

In 2022 and 2023, the issue of national security arose once again. In June 2022, reports emerged that ByteDance employees in China could access U.S. data and repeatedly accessed the private information of TikTok users. Following the reports, TikTok announced that 100% of its U.S. user traffic is now being routed to Oracle Cloud, along with their intention to delete all U.S. user data from their own data centers. This deal stems from the talks with Oracle instigated in September 2020 in the midst of Trump’s threat to ban TikTok in the United States.

In June 2022, FCC Commissioner Brendan Carr called for Google and Apple to remove TikTok from their app stores, citing national security concerns, saying TikTok “harvests swaths of sensitive data that new reports show are being accessed in Beijing.” In November 2022, Christopher A. Wray, director of the Federal Bureau of Investigation, told U.S. lawmakers that “the Chinese government could use [TikTok] to control data collection on millions of users or control the recommendation algorithm, which could be used for influence operations.”

As of February 2023, at least 32 states have announced or enacted bans on state government agencies, employees, and contractors using TikTok on government-issued devices. State bans only affect government employees and do not prohibit civilians from having or using the app on their personal devices.

In March 2023, TikTok’s CEO, Shou Zi Chew, appeared before Congress to address the concerns surrounding the app. He stated that TikTok’s data collection practices did not differ from those of U.S. social media platforms.

Is True Interactive concerned that TikTok poses a national security threat?

There has been no “smoking gun” evidence that TikTok poses a national security threat. There is no public evidence the Chinese government has actually spied on people through TikTok.

TikTok doesn’t operate in China. But since the Chinese government enjoys significant leverage over businesses under its jurisdiction, the theory goes that ByteDance, and thus indirectly, TikTok, could be forced to cooperate with a broad range of security activities, including possibly the transfer of TikTok data.

“It’s not that we know TikTok has done something, it’s that distrust of China and awareness of Chinese espionage has increased,” according to James Lewis, an information security expert at the Center for Strategic and International Studies. “The context for TikTok is much worse as trust in China vanishes.”

TikTok has been erecting technical and organizational barriers that it says will keep U.S. user data safe from unauthorized access. Under the plan, known as Project Texas, the U.S. government and third-party companies such as Oracle would also have some degree of oversight of TikTok’s data practices. TikTok is working on a similar plan for the European Union known as Project Clover.

In 2022, a report found TikTok was spying on journalists, snooping on their user data and IP addresses to find out when or if certain reporters were sharing the same location as company employees. TikTok later confirmed the incident and ByteDance fired several employees who had improperly accessed the TikTok data of two journalists.

The circumstances surrounding the incident suggest it was not the type of wide-scale, government-directed intelligence effort that US national security officials primarily fear. Instead, it appeared to be part of a specific internal effort by some ByteDance employees to hunt down leaks to the press – which may be deplorable but hardly uncommon for an organization under public scrutiny.

Do you believe TikTok will get banned?

Only the U.S. government can answer that question with certainty. But TikTok says 150 million Americans use the app, it is increasingly popular with advertisers, and many smaller businesses say it is essential to their livelihood. It’s more likely that TikTok will face closer regulation and possibly be sold.

Should I be concerned about advertising on TikTok?

TikTok poses no more of a risk than any other social app. Every major app, including Facebook, Instagram, Snapchat, Twitter, and YouTube – has faced public scrutiny and controversy over issues ranging from privacy breaches to content moderation lapses. As we’ve blogged, social media is a messy place for any brand to be. But social media also holds many advantages, as our work with advertisers has demonstrated.

How can TikTok help my brand?

We recommend that brands Consider TikTok for brand awareness, but the jury is still out when it comes to conversions. Our campaigns have performed especially well when our objectives have been to achieve reach and brand lift. In our experience, TikTok CPMs are typically less expensive than CPMs for Facebook, Snap, or Pinterest. Read our blog post about TikTok’s performance for more insight.

Contact True Interactive

At True Interactive, we work with our clients to maximize the value of all their online advertising, including social media spend. We strongly advocate for our clients as we work with apps such as TikTok. Contact us to learn how we can help you.