Resolving TikTok’s Data Issues Country by Country
Thursday, August 13, 2020
India’s Reliance Industries is considering acquiring TikTok’s business in India from ByteDance. We recently discussed the growing distrust by companies and countries of TikTok because of the perceived vulnerability of user data to Chinese government access. India has already banned use of the mobile application, with the United States threatening to follow suit if ByteDance, a Beijing headquartered company, does not divest from TikTok’s American operations. Since these calls for divestment got louder, Microsoft has emerged as a potential solution for the American issue. Microsoft has openly stated that they are in discussions with ByteDance. As noted, this remains a regional solution and would not acquiesce the Indian government.
The Indian government in June banned 59 Chinese apps, including TikTok. China has extended an anti-dumping tariff on a single mode optical fibre. Tensions between the countries continue to escalate. Enter Indian conglomerate Reliance Industries for a possible solution. Recent reports indicate that Reliance could be preparing to invest in TikTok. Reporting indicates that the discussions between ByteDance and Reliance Industries began in July. TikTok’s business in India has a valuation of $3 billion.
This potential proposal is significant for ByteDance and for the growth of TikTok because prior to the government ban, the mobile application had acquired more users in India than in any other country. Other social media companies have seen the market need for Indian investment. India is Facebook’s WhatsApp messenger’s biggest market with about 400 million users. Facebook has been trying to expand in India otherwise, as well. In April, Reliance Industries and Facebook were in talks to develop a multipurpose application that would be similar to WeChat. The mobile platform would combine social media, digital payments, gaming, lodging reservations, and other services onto the application. Ultimately, Facebook and Reliance came to an agreement in which Reliance Industries digital arm, Jio Platforms would be able to leverage WhatsApp messenger for Jio’s retail venture, JioMart.
The agreement Reliance Industries and Facebook entered into is an indication that TikTok’s operations in India may make sense as part of Reliance’s arsenal. Unlike with Microsoft, where there was acknowledgement of ongoing discussions with ByteDance in a blog post, there has not been any official word on the collaboration from either ByteDance or Reliance yet.
Meanwhile, TikTok is being looked at by the Commission nationale de l’informatique et des libertés (NCIL), an independent French administrative regulatory body, for a number of issues, including how the company communicates with users and the protection of children. As problems begin to mount, and regional solutions roll in, it will be worth monitoring if the European Union will require concessions from TikTok. The Netherlands and a set of EU data protection regulators have each expressed concern about TikTok data treatment. Canadian lawmakers have said that they would ban the service if they found evidence of misuse of data.
Copyright © 2020 Womble Bond Dickinson (US) LLP All Rights Reserved.National Law Review, Volume X, Number 226