U.S. Regulatory Threat Will Test TikTok’s Resilience

As its influence continues to grow, the target on TikTok’s back is getting much, much bigger in the U.S. 

TikTok CEO Shou Zi Chew is being summoned to Capitol Hill by the House Energy and Commerce Committee to testify on March 23 on the company’s consumer privacy and data security practices, the platform’s impact on kids and its relationship with the Chinese Communist Party.

The hearing was announced in a very short but strongly worded press release. The committee claimed, “ByteDance-owned TikTok has knowingly allowed the ability for the Chinese Communist Party to access American user data. Americans deserve to know how these actions impact their privacy and data security, as well as what actions TikTok is taking to keep our kids safe from online and offline harms. We’ve made our concerns clear with TikTok.” 

A spokesperson for TikTok issued a statement to various news outlets saying the committee’s claims are baseles and the company has not provided the Chinese government with U.S. user data. This comes after the app faces an official ban on U.S. government-issued devices on Feb. 27.

There are a few things the U.S. government is attempting to accomplish with this high-profile and very public summon. First, it is a message to China that the U.S. will not sit back and willingly allow its national security to be compromised by the Communist Party. Second, it adds to the messaging that lawmakers are not slowing down its pace of regulatory crackdowns on Big Tech giants with outsize influence. 

And just like we thought a few years back when President Donald Trump attempted to outright ban the China-based social media app in the country, this new wave of government regulation is very serious.

According to findings from the most recent Harvard Caps/Harris Poll conducted in mid-January, it appeared the government’s actions to regulate TikTok aligns with American voter sentiment. The survey found 55% of U.S. voters said they think we need more regulation on consumer privacy and security on the internet, and 49% thought the government needed to regulate social media more than it does now. 

There’s a lot at stake for TikTok, and that’s because there is potentially a lot at stake for TikTok users and their private information. Though there have been quite a few questionable situations, the most recent incident regarding Forbes journalists was particularly shocking and showed just how easily user information could be compromised if the company was determined to do so. 

Even as public trust in TikTok and parent company ByteDance continues to be called into question; the real question is whether anything will ultimately be done to better regulate the app in the U.S. despite all these efforts from lawmakers.  

The TikTok debacle is reminiscent of two quite different scenarios we’ve seen in the past. First is the U.S. government’s battle with Chinese tech giant Huawei. It was a long process that really kicked into high gear in 2018, but ultimately the U.S. was successful in banning Huawei from U.S. communication networks. Much like TikTok, there were extreme concerns of friendliness with the Chinese government. In November, the Biden administration banned the sale of new Huawei and ZTE telecom equipment.

On the flipside, if previous Big Tech regulation is any sort of indication, TikTok could get away with prolonging meaningful regulation for many years. Just look at the current fight between the Department of Justice and Google. After lawmakers approved various acquisitions in the past, the DOJ is now looking to break up Google’s online ad business, calling it an antitrust violation.

One challenge with years-long regulatory battles is the price tag. TikTok and parent ByteDance have already been aggressively lobbying in DC. In 2022, the company spent $5.4 million in federal lobbying, which was a 4% increase year-over-year. That number is only expected to grow as ByteDance looks to push back on further bans in the U.S.  

Despite the gravity of the regulation situation, there really is no telling what will ultimately happen with TikTok in the U.S. on the consumer front. TikTok was the most downloaded app globally and in the U.S. for the third year in a row. ByteDance’s video editing app CapCut also moved to the fourth spot in 2022, up from nine in 2021.

From a consumer standpoint, TikTok is often viewed as a fun place to connect with others, but it has a lot of influence as well. According to a Pew Research Center survey, about a quarter of U.S. adults under the age of 30 said they regularly get their news from TikTok. It has yet to be proven, but there are many questions about pro-China content being pumped to American audiences.

As we learned through the Facebook-2020 election drama, there is a dangerous amount of risk with the spread of possible misinformation across social media platforms.

An outright TikTok ban in the U.S., like the one President Donald Trump attempted, and the ban in India might be a possibility down the line. But the road will be both time and energy consuming for everyone involved. The U.S. would need definitive proof that TikTok was violating U.S. user information and colluding with the Chinese Community Party.

In the meantime, TikTok’s popularity and influence in the U.S. will continue to grow, making it even harder to impose serious crackdowns if the time were eventually to come. But both sides of the aisle in Washington are on board with intense regulatory crackdown on TikTok, and that alone can prove to be a real headache for the company for a long time ahead.