It’s all change at TikTok, as the Chinese social media company finds itself as the latest battleground in the US-China trade war – and now the UK and Microsoft are involved.
Just weeks ago, the company found itself at the heart of a privacy debate when revelations about the high levels of data it collected from users sparked concerns. Never mind that many other social media apps collect similar data – for many in the West, and particularly the US, the fact that TikTok is a Chinese company was enough for this collection to be far more sinister than its counterparts.
India – itself in deep political manoeuvrings with China – took the decision to ban TikTok, alongside a host of other Chinese apps, at the end of June, and last week US President Donald Trump indicated that he may do the same.
US TikTokers expressed outrage at the proposal, particularly those who had been using the platform to organise against Trump.
But behind the scenes, TikTok creator ByteDance was scrambling for a solution, which is now emerging in two parts.
TikTok: Selling to Microsoft?
The first is to sell its division covering the US – as well as Canada, Australia and New Zealand – to Microsoft.
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This would keep the user experience the same, but keep user data within the US, and according to Microsoft, would add “world-class security, privacy and digital safety protections”.
It’s an unusual step, but one that many are seeing as a canny solution to the problem.
“Microsoft’s proposed acquisition of TikTok’s operations in some countries may provide a neat solution to the trade war issues that TikTok is facing, as well as a sizeable advertising platform to rival YouTube, and it would bring a large new cloud user for Microsoft,” said Martin Garner, COO at market intelligence firm CCS.
“But it’s hard to see other synergies of any size, so it’s likely that TikTok would continue to operate at arm’s length, similar to LinkedIn.”
For Microsoft, it also gives it a key presence in the social media space, augmenting its ownership of LinkedIn with a younger-targeted brand. And for Trump, it is likely to be an appealing idea for one of the country’s largest tech companies to take over from a Chinese operator.
However, this may not be enough to fully extinguish his aggression against the company, particularly given part two.
TikTok eyes move to the UK, but will it enrage Trump?
The second manoeuvring by TikTok is reportedly to relocate its headquarters to the UK, effectively repositioning the company as an international brand, not a Chinese one.
This could make GDPR the main privacy law under which TikTok user data was handled, and (at least in theory) lessen the association with China and therefore the related concerns about the Chinese government’s ability to access data collected by the company.
While there have been no comments on record as yet, UK ministers have allegedly given the green light to the deal, which has been proposed on the day TikTok celebrates its second birthday in the country. And given the UK is desperately trying to enrich its tech industry as a no-deal Brexit looms, this is perhaps not surprising.
Making the UK home to TikTok would bring benefits – including jobs – to the sector, but it could also strengthen ties to China at a time when they have been increasingly strained.
The reason for this strain is Huawei, the former US-China trade war battleground, and in particular its role in 5G infrastructure.
Seeing the company as a national security threat because of its close ties to the Chinese state – something Huawei has always denied – Trump banned Huawei from its telecoms infrastructure in the US, and put pressure on its intelligence sharing partners, including the UK, to do the same.
The UK resisted for some time over practicality reasons, but ultimately caved to Trump’s request in July.
Now TikTok has taken over as the focus of Trump’s China ire, the UK looks to be taking a different approach, albeit one that is unlikely to be welcomed by the US president.
“With TikTok thought to pose severe surveillance risks of its own – due to its ability to harvest consumer data for the Chinese government – it is interesting that the UK is not, once more, aligning itself with the US,” said Ray Walsh, digital privacy expert at ProPrivacy.
“Ultimately, this seems likely to be a move designed to allow the UK to regain some of the favour it has lost with China due to the Huawei ban. With Brexit looming and a lack of trade deals in place, the UK appears to be scrambling to repair relations with the Chinese, wherever possible.”
This may help UK-China relations, but Trump may well view it as a slight, running contrary to his efforts against TikTok. However, as – assuming the Microsoft deal goes ahead – it will have little impact on US citizens, so it is not clear what argument the US could make against it.
If Tiktok does relocate to the UK, how Trump responds remains to be seen. But it is clear that for TikTok, its place at the political battleground du jour is far from over.