Will a US-headquartered TikTok be enough to ensure data privacy?
Will the Trump administration be satisfied with Oracle and Walmart's guarantees of user safety?
Critics of Chinese-controlled social media app TikTok have called for any deal to require shifting the company's headquarters to the U.S. to ensure Americans' data is protected from surveillance by a foreign government, but making such a promise may be easier said than done.
"You’ll never eliminate the risk ... but you can certainly mitigate it," Joseph Moreno, general counsel and chief compliance officer of SAP National Security Services, told FOX Business. "I’d want to look at how is the data handled, how is it housed and where, who controls the coding of the algorithm that makes the recommendations to people who use TikTok, and who controls the sharing of that personal data."
TIKTOK TO FILE US IPO IF ORACLE DEAL APPROVED BY WHITE HOUSE
Becoming a U.S.-based company won't necessarily save TikTok from scrutiny, especially as many American social media companies have faced criticism for their user data collection, Moreno said. TikTok may receive even more skepticism because of its extremely young user base, he added.
"When you have a class of users that might be less conscious about privacy than those of us who have seen things, been around the block a little bit, that itself is a concern that you don’t see with more traditional social media platforms," Moreno said.
In this July 21, 2020 file photo, a man opens social media app 'TikTok' on his cell phone, in Islamabad, Pakistan. (AP Photo/Anjum Naveed, File)
President Trump touted a tentative deal between TikTok's parent company, ByteDance, and U.S. companies Oracle and Walmart, saying on Monday that the partnership could bring 25,000 jobs to Texas if the companies can prove there will be "zero security risk."
TRUMP SIGNS OFF ON TIKTOK DEAL WITH ORACLE, WALMART
On Sunday, Senate Intelligence Committee Acting Chair Marco Rubio, R-Fla., said the proposed deal may still be problematic if the Chinese government controls some of the coding mechanisms. ByteDance denies that it shares TikTok user data with the Chinese government.
"My concern remains this: If that code – you know the code that gives the instructions to the system on what to do – if China continues to control the code as I understand they would in this deal, they could put in that code an instruction to secretly send data back to China, to the mainland, no matter where the actual data is housed," Rubio told "Sunday Morning Futures."
"We have to be very careful in looking at that provision, because any opportunity whatsoever for China to continue to collect personal data on Americans, then we can’t be supportive of that deal. So that’s the core and the crux of it that we’ll be looking at," he continued.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| WMT | WALMART INC. | 59.27 | -0.38 | -0.64% |
| ORCL | ORACLE CORP. | 116.00 | -2.67 | -2.25% |
Rubio's statement is a "great sentiment" but is not grounded in "practical reality," Moreno said. Just moving TikTok's headquarters from China to the U.S. is not enough to ensure Americans' data is protected, agreed Carl Tobias, a University of Richmond law professor who follows tech issues.
"Hopefully, people like Rubio will keep the pressure on to make sure national security is protected," Tobias told FOX Business. "It could be that [the departments of] Treasury and Commerce and others will help remedy this, but the way [the deal is] structured now doesn’t give a lot of confidence that national security will be fully protected."
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When Trump first raised the possibility of banning TikTok to protect national security, many expected a U.S. tech company to buy TikTok's U.S. business outright.
The Oracle-Walmart deal would give the companies 20% of a not-yet-formed entity called TikTok Global. TikTok is owned by Chinese company ByteDance, which would hold the remaining 80% stake.
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