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Is Tiktok Shutting Down or Getting Banned in 2020 | Tiktok-Microsoft-Oracle Deal

Updated: Nov 26, 2020



Throughout history, we’ve seen the proverbial ‘Holy Grail’ emerging in different formats in different ages. Drinkable water, fertile lands, expensive metals, mineral oil, and money have all been Holy Grails that have caused and decided wars. However, the Holy Grail in the 21st Century has changed once again.


In the 21st Century, Data is the Holy Grail. People’s data, collected over multiple platforms, most frequently over online platforms is quite literally, everything. This data includes everything there is to know about every single man on this planet. Be it basic details about your name, your birthdate, and other credentials or something as complexly personal as where you go, what is the most preferred color, what is the name of your daughter’s dog, and much more. Whoever owns this data is the ultimate King just like Big Brother was in the dystopian world of George Orwell’s 1984. Major Tech Companies all around the world, from Google and Facebook in the United States to Tencent and Baidu in China have data mining deeply ingrained in their commercial operations. Every second, millions and millions of gigabytes of data are mined by companies, which is then further sold for targeted marketing purposes, intelligence purposes, and so on.


However, just like every Holy Grail has been the reason for countless wars, so has data-mining. And in recent times, one of the world’s most prominently extensively used video-sharing app, TikTok has found itself at the center of the latest data privacy war. Here’s a bit about TikTok for everyone who lives under the rock or in a heavily censored state who doesn’t understand what TikTok is.


What is TikTok?


TikTok is one of the biggest players in the video-sharing industry and a market leader in the short-video segment of the industry. It is a mobile application that allows its users to share particularly trendy 15 seconds videos with additional features like adding music, tools for editing, and so on.


Quite interestingly, this concept of 15-second videos has been a rage amongst teenagers looking for entertainment since the days of the American app Musical.ly. Musical.ly was later bought by Chinese company ByteDance and integrated into its platform TikTok and the rest is history.


On the face, TikTok appears to be just one of those ‘millennial trends’ with their Instagram selfies and whatnot. Then how exactly did it find itself embroiled in a global data privacy war? Here’s the tea.


Photo by Hello I'm Nik on Unsplash


Why TikTok?


TikTok wasn’t always known as TikTok. It was launched in China in 2016 under the name of Douyin by its parent company, ByteDance, and its founder and CEO, Zhang Yiming. On the backs of TikTok and other ventures, Yiming built a fortune worth 16 Billion Dollars and ByteDance became the world’s most valuable privately held company at a valuation of 75 billion dollars. The rate at which TikTok has been growing is phenomenal, cementing itself as one of the leaders of the social media generation. So far, so good.


Here’s where the Holy Grail clause clicks in. Tiktok is owned by an extravagantly rich company and a highly secretive CEO and is headquartered in a communist country that has often been called out for using technology to snoop on people across the world amongst other alleged human rights violations. China or the People’s Republic of China as they like to call themselves is infamous for allegedly threatening the sovereignty and security of countries around the world. It is often painted as the villain and the big bully in the big global canvass by countries that like to call themselves the leaders of the free world.


The ‘minor’ inconveniences


The biggest pain point for the few users who care about their privacy is that TikTok asks for more permissions to access data points about its users legally than it’ll ever require. It’s like your local restaurant wanting to install a CCTV camera in your living room under the pretext of better service. Doesn’t make sense, right? TikTok has also often been found guilty of illegally collecting data without asking permission and has had to pay fines and damages in many courts of law. It has also been found guilty by a United States Court of collecting data about users who are minors.


Propaganda alert


One more key point to note which complicates things for TikTok is the data censoring, propaganda, and laws of the Chinese government. Throughout the short but vividly intense history of Tiktok and its controversies, TikTok has often been used as a channel of propaganda to promote the interests of China and the communist ideology. Multiple investigations have been launched, the results of which have shown that TikTok deletes or ‘shadow-bans’ anti-China content citing some of the other technical reasons and promotes and promulgates pro-China content. That is just one concerning fact.


The Dragon’s Byte


However, the biggest apolitical and logical reason that a lot of countries might find alarming is the China Internet Security Law a.k.a the Dragon’s Byte. The China Internet Security Law legally compels any internet-based or technology-based company to share any and every piece of data that the government might demand, under the Internet Security Law. This means that even though multiple investigations have concluded that TikTok hasn’t ever shared data with any outside entity, the truth is that the Chinese already have an all-access pass to these supposedly secure safety vaults. The valuables in that vault include every user’s phone number, e-mail address, biometric data, and possible financial credentials.


So, this was the crux of the issues raised and arguments advanced against TikTok, let’s take a look at the punitive measures and repercussions that TikTok has faced in the two countries where it has its largest user bases.


TikTok in India- The Collateral Damage


For a long period, TikTok in India was treated like the messiah for the underprivileged as a means to express themselves and as a proverbial representative of the Chinese ideology by the Indian bureaucracy.


In the summer of 2019, a state High Court of India directed the national government to provisionally ban TikTok as they found the video-sharing app to promote pornographic and immoral content. IT think tanks and firms had also long been shouting for a ban vis-à-vis the data privacy concerns.


However, the ban of 2019 was reversed as TikTok promised rectification measures, the foremost being about building data centers in India to save Indian data within India. Such a move would ensure that no piece of data would cross borders and thereby prevent any sort of data encroachment or trespassing.


Another key event that put the final nail in the coffin of TikTok was the recent incursions by the Chinese Army into the Galway River Valley along the India-China border. The Chinese were objecting to road-construction activities by the Indian authorities and this resulted in a melee conflict that led to casualties. Around 40 Chinese soldiers and 20 Indian soldiers were killed as a direct result of this melee conflict in late May. This led to intense furor and rage amongst the Indian public and media. Throughout India, various calls were made for boycotting Chinese products and services. These anti-China sentiments were already prevalent in India instead of the fact that the novel Coronavirus and the resultant pandemic had originated from Wuhan, China. The border skirmishes added gasoline to what was already raging fire.


As a result, the Indian Government had to make a statement to show to their people and the world that they were in control and they wouldn’t give in to Chinese pressure tactics. Amongst this Indo-China conflict, one of the many losers was TikTok. On 29th June 2020, along with 57 other China-based apps, TikTok was banned by the Indian Ministry of Electronics and Information Technology. This indefinite ban was placed under the pretext of data privacy concerns but had a largely political motive behind it. TikTok was the collateral damage here and it faced damages of up to 6 billion dollars from this move alone.


TikTok on a clock


The Donald Trump-led administration of the United States of America probably decided to take a leaf out of the book of the Indian Government. Come early July when the US secretary of state, Mike Pompeo announced that the US government was contemplating banning TikTok in the US. The pretext here was data privacy as well, but like the Indian Government, the US counterparts needed to state the Covid-19 pandemic and TikTok became the perfect scapegoat.


However, the Trump admin didn’t exactly follow through as it realized that banning TikTok would harm their chances in the forthcoming November 2020 elections as such a move would disavow young voters. As a result, President Trump issued an executive order which compelled ByteDance to divest its ownership to a US company within 90 days from 14th August or it would be completely banned. As of now, Microsoft and Oracle are frontrunners for the purchase of the TikTok business in the US and many other countries where TikTok is faced with a ban because of its present ownership. It also held talks with Indian Conglomerate Reliance for the sale of its Indian Business.


The way forward for TikTokn is considering the stance of countries around the world, anything ranging from spinning off TikTok as an individual company to divesting a stake to complete the sale of TikTok seems to be the only way forward for ByteDance or it could risk going out of business. The reason why tech giants are looking to buy TikTok is because of the Holy Grail that TikTok brings with itself- the data of users.


So what is there to be seen is in any deal that ByteDance signs now is which company gets controlling interests of the data. The data play is what has incentivized established tech giants like Microsoft and Oracle. Both the companies are American giants who have done well in their line of B2B Corporate business but haven’t gotten a foothold in the consumer-based social media business where Facebook and affiliates have already established themselves.


For Microsoft in particular, this deal allows them to take on a well established social media company. Buying an already globally established company mitigates the chances of another social media fail like Skype. For Oracle, which has never really been a part of the social media trend, TikTok has become a doorway into this world.


Conclusion


For TikTok, it’s now about damage control. For a company that would have sold for billions of dollars or could have been traded publicly, ByteDance will now have to sell TikTok for pennies on dollars to any company that is ready to buy it in this limited timespan. ByteDance might have given up on the data treasure trove but being in business is better than no business. For companies like Microsoft and Oracle and Reliance, which are looking to buy it, it’s a win-win in all directions. They get to buy a company that has been driven down and battered at a very convenient time by two major governments. This brings the price of the company drastically down and now they get to keep all data as well. Guess, this one did ‘byte’ hard.


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