TikTok Chief Executive Shou Zi Chew is pictured on the day he’ll testify earlier than a House Energy and Commerce Committee listening to entitled “TikTok: How Congress can Safeguard American Data Privacy and Protect Children from Online Harms,” as lawmakers scrutinize the Chinese-owned video-sharing app, on Capitol Hill in Washington, U.S., March 23, 2023.
Evelyn Hockstein | Reuters
For a number of years now, ByteDance’s TikTok has been the main focus of lawmakers and intelligence officers who concern it could possibly be used to spy on Americans. Those issues took middle stage throughout a five-hour grilling of TikTok’s CEO again in March.
But whereas TikTok has been the one within the highlight, different Chinese apps that current comparable points are additionally experiencing large reputation within the U.S.
Concerns about ByteDance stem largely from a nationwide safety legislation that provides the Chinese authorities energy to entry broad swaths of enterprise data if it claims to be for a nationwide safety objective. U.S. intelligence officers and lawmakers concern that the Chinese authorities might successfully entry any data that China-based app corporations have collected from American customers, from electronic mail addresses to consumer pursuits to driver’s licenses.
But that does not appear to have swayed many customers, as a number of China-based apps are nonetheless booming within the U.S.
For instance, the purchasing app Temu, owned by China-based PDD Holdings, has the quantity two spot on the Apple App Store amongst free apps as of late May. It additionally held the quantity 12 spot amongst digital retailers within the 2022 vacation season for distinctive guests to its web site, topping shops like Kohl’s, Wayfair and Nordstrom, based on Insider Intelligence, which additionally credit visibility on TikTok for its rise.
Meanwhile, ByteDance-owned apps CapCut and TikTok maintain the fourth and fifth spots on the App Store rankings. Chinese quick style model Shein holds fourteenth.
And between late March and early April, after the TikTok CEO listening to earlier than Congress, ByteDance’s Lemon8, noticed almost 1 million downloads within the U.S., Insider Intelligence reported based mostly on knowledge from Apptopia. It’s an app with similarities to Pinterest and Meta’s Instagram.
These apps share a number of the options which have apprehensive the U.S. authorities about TikTok, together with about whether or not a few of these companies adequately shield U.S. consumer knowledge when working out of China (TikTok has careworn that U.S. consumer data is simply saved on servers exterior of China). Like TikTok, these apps acquire consumer data, can analyze tendencies of their pursuits and use algorithms to focus on customers with merchandise or data that’s more likely to preserve them engaged with the service.
But specialists on China and social media say there are vital variations between these apps and TikTok which could clarify the relative lack of consideration on them. Among an important of these options is the size of their presence within the U.S.
TikTok vs. different Chinese apps
In simply 17 days after launch, Temu surpassed Instagram, WhatsApp, Snapchat and Shein on the Apple App Store within the U.S., based on Apptopia knowledge shared with CNBC.
Stefani Reynolds | Afp | Getty Images
Even as they develop, the U.S. userbase of many common Chinese apps remains to be dwarfed by TikTok’s large U.S. viewers of 150 million month-to-month energetic customers.
TikTok sister app Lemon8, for example, has an estimated 1.8 million month-to-month energetic customers within the U.S., based on Apptopia.
While TikTok has had 415 million downloads within the U.S. since its launch right here, CapCut has had 99 million, Temu 67 million and Lemon8 1.2 million, based on Apptopia.
Only Shein surpasses TikTok in downloads amongst this group of apps, although it launched far earlier within the U.S. in 2014. Shein’s app has 855 million downloads within the U.S. since its debut, although Apptopia estimates it has about 22 million month-to-month energetic customers.
“An app with a thousand, or even a million users in the U.S. does not present the same widespread cybersecurity threat that an app with 100 million users has,” mentioned Lindsay Gorman, senior fellow for rising applied sciences on the German Marshall Fund’s Alliance for Securing Democracy.
Gorman mentioned because the U.S. considers the menace posed by TikTok, it’ll additionally have to develop a framework for find out how to consider the relative threat of Chinese apps. The scale needs to be one issue, she mentioned, and the kind of app, together with its means to unfold propaganda, needs to be one other.
“The ability for a Chinese technology platform to represent critical information infrastructure in a democracy has to be part of that calculus when assessing risk,” Gorman mentioned. “That’s where I think the analogies with power grids or energy infrastructure are applicable. We we would not allow the authoritarian regime to build significant components of our energy infrastructure and rely on an authoritarian regime for that.”
That implies that an app like ByteDance’s CapCut might current a decrease threat, each due to its smaller consumer base and since it is meant to edit movies, reasonably than distribute them.
“We’re really at the beginning stages of even recognizing that a broader characterization and categorization is actually needed,” Gorman mentioned, including that reasonably than taking part in whack-a-mole with Chinese expertise that poses a menace to U.S. nationwide safety, the nation ought to develop a extra systematic framework.
But within the meantime, U.S. customers proceed to show to Chinese apps.
“Among the most downloaded apps consistently are Chinese-based ones like Temu and CapCut,” mentioned Jasmine Enberg, principal analyst masking social media at Insider Intelligence. “And then of course, there’s the early growth of Lemon8, which suggests that the appetite for Chinese apps in the U.S. is still growing.”
For e-commerce apps, the danger of spreading dangerous misinformation might not be as excessive as on a social media service. An e-commerce platform like Temu or Shein is probably going a much less viable platform to unfold propaganda than a video app like TikTok.
“People just aren’t really spending the same amount of time on commerce apps and they’re not exposed necessarily to the same kind of content that could potentially have a negative impact on young people,” Enberg mentioned. “I also don’t necessarily think that the connection to China for some of these apps is as clear to the average consumer and I also don’t think that consumers are really going around thinking about where the apps that they’re using originate from.”
Still, the U.S. might discover a cause for concern. A latest CNN report that discovered Temu sister firm Pinduoduo, a purchasing app common in China, contained malware. The mother or father firm of each apps, PDD Holdings, didn’t reply to a request for remark. Research employees on the U.S.-China Economic and Security Review Commission pointed to that report in assessing Temu’s knowledge dangers, although an analyst not too long ago advised CNBC that Temu has not been as “aggressive” in requesting entry to customers’ knowledge as Pinduoduo.
At least one group has considered the strain on TikTok as an optimum time to boost issues with one other Chinese firm common within the U.S.: Shein. The group Shut Down Shein, which is a “coalition of individuals, American brands and human rights organizations,” based on govt director Chapin Fay, launched the day that TikTok’s CEO was hauled earlier than Congress.
Customers maintain purchasing luggage exterior the Shein Tokyo showroom in Tokyo on Nov. 13, 2022. Reuters experiences the quick style retailer is focusing on a U.S. IPO within the second half of 2023.
Noriko Hayashi | Bloomberg | Getty Images
“We were sort of agnostic on the timing, but we wanted to make sure that while people are talking about TikTok, there’s this other nefarious actor, Shein, who’s also collecting data and doing it all under the radar and also doing these other even worse things like slave labor,” mentioned Fay, managing director of Actum consulting agency.
The group particularly takes challenge with Shein’s alleged use of compelled labor, as Bloomberg reported final yr that checks revealed that cotton in garments shipped to the U.S. have been linked to a area in China the place the U.S. authorities has mentioned compelled labor is deployed. China has denied using compelled labor.
Shut Down Shein additionally rails towards the corporate’s alleged use of an import loophole to keep away from tariffs. Through the de minimis commerce tax exemption, the group says, particular person prospects change into the importer of their quick style items, a observe that got here up at a latest listening to by the House Select Committee on Strategic Competition between the United States and the Chinese Communist Party.
A Shein spokesperson mentioned in a press release that it “complies with the domestic tax legislations of the countries in which it operates.” The spokesperson additionally mentioned that Shein has “zero tolerance for forced labor,” takes critically visibility throughout its provide chain and requires suppliers to observe a “strict code of conduct.”
Fay mentioned it is vital to acknowledge that the best way Shein has been in a position to develop its model and acquire new prospects, largely through so-called influencer hauls, is thru TikTok.
Fear of a ‘slippery slope’ ban
Faced with nationwide safety worries over TikTok, lawmakers have thought-about a number of proposals that might result in a ban. But critics concern some proposed options might create a slippery slope of unintended penalties. And some say the simplest long-term resolution for curbing using Chinese apps could also be fostering an surroundings for strong alternate options to develop.
Perhaps probably the most distinguished of the payments that might result in TikTok’s ban within the U.S., the RESTRICT Act, would give the Commerce Secretary the ability to advocate barring expertise that comes from a choose group of overseas adversary international locations in the event that they decide the dangers can’t be sufficiently mitigated in any other case.
Though the proposal shortly garnered critical consideration for its heavy-hitting group of sponsors, together with Senate Intelligence Committee Chair Mark Warner, D-Va., and Commerce subcommittee on communications rating member John Thune, R-S.D., it is since appeared to lose the early momentum. That’s due partially to issues raised by the tech business and others that the invoice might give the manager department broad energy to hunt a ban on sure expertise.
Sen. Mark Warner (D-VA)
Drew Angerer | Getty Images
“While I understand that Americans enjoy the convenience of Chinese e-commerce and the creative tools of many Chinese communications apps, we have to reckon with the fact that these companies ultimately are beholden to the demands of the Chinese government,” Warner mentioned in a press release. “We’ve had an important and overdue conversation about the predatory and invasive practices of U.S. tech firms in recent years; those same concerns are valid with the growing sway of these foreign apps – and then exacerbated by the manner in which these PRC-based companies serve as instruments of PRC power.”
One of these critics of the invoice’s present scope is Andy Yen, CEO of Proton, which makes an encrypted electronic mail service and VPN. While Yen believes that TikTok needs to be banned within the U.S., he fears the RESTRICT Act is at the moment too broad to successfully achieve this with out further penalties.
In a latest weblog submit, Yen argued that the invoice would give the Commerce Secretary overly-broad energy to designate further governments as overseas adversaries and feared that ambiguous language within the invoice could possibly be used to penalize people who use VPNs to entry apps which are banned within the U.S.
In the submit, Yen instructed these points could possibly be resolved with adjustments to the invoice’s language to make it extra focused and restricted in scope.
Speaking on the “Pivot” podcast not too long ago, Warner careworn the necessity for a rules-based strategy that could possibly be legally upheld to take care of tech from overseas adversaries. He mentioned he believes criticism of the invoice, together with that it could goal particular person VPN customers or that U.S. corporations that do enterprise in China could possibly be swept up in enforcement motion, is just not legitimate, although he mentioned he’s open to amending the invoice to make that extra clear.
“There is a very legitimate national security concern here,” Yen mentioned. “So I think it is something that regulators do need to tackle and this is why Congress is trying do something. But I think we need to do it in a way that doesn’t undermine the values of freedom and democracy that make America different from China.”
Still, a TikTok ban would produce other results within the U.S., like yielding extra market share to current tech giants within the U.S. like Meta’s Facebook and Instagram. Proton has been an energetic proponent of antitrust reform to create what some corporations see as a extra stage taking part in subject for tech builders within the U.S.
Yen mentioned the answer to creating extra aggressive digital markets within the U.S. is to not enable dangerous Chinese corporations to run rampant, however reasonably “to have a level playing field that can allow other American companies or European companies to compete in the U.S. fairly.”
That’s a purpose shared by Jonathan Ward, an professional on China who based the Atlas Organization consulting agency.
“The best way that we can do this is to create alternatives,” Ward mentioned. “Because even if these companies don’t take root in our own market, even if we’re able to successfully deny them access here, as we did with Huawei, they can flourish in other parts of the world,” he added, referring to the Chinese telecom firm that is been positioned on a U.S. entity record over nationwide safety issues.
“We’re also going to have to stand up American and free world alternatives to these companies because you can’t let them take over industries that matter or create apps that become integral to the fabric of our societies,” Ward mentioned. “And that’s going to require an effort that goes beyond the Congress and into the sort of entire system of democracies worldwide.”
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