TikTok’s Balancing Act: Navigating Security Concerns, Civil Liberties, and Advertising Impact

By: Cory Halberstadt, Platforms Senior Supervisor, Social Media

TikTok has gained in popularity over the last several years and now has over 150 Million users and counting. Over the previous few months, lawmakers in the US., CA, and Europe have expressed increasing concern that ByteDance, TikTok’s parent company, may be putting sensitive user data at risk. These countries have since banned the app on government devices, which has already faced restrictions in many countries and has been banned in India. In addition, citing a threat to National Security, a U.S. executive order was enacted in August 2020 to restrict the app. However, the ban faced several legal challenges and has yet to come into force.

TikTok CEO Shou Zi Chew appeared before Congress on March 23rd, 2023, and faced hours of tough questions and sharp criticism from legislators who, for the most part, are convinced that the app should be banned. There are, however, some members of Congress who are pushing back. The main hearing accusations revolved  around the idea that user data could be shared with the Chinese government and that the app fails to adequately protect children from harm. Shou Zi stated that TikTok has the commitment to keep the app free from manipulation by any government and that the company has spent over 1.5 Billion dollars on a security project to secure its U.S. user data. Chew also stated that the app focuses on safety and rigorously screens content that could harm children.

Recently, Montana has made headlines as the first state to pass legislation prohibiting the use of TikTok on personal devices. The ban will take effect in January 2024 if Governor Greg Gianforte signs the bill into law. Notably, the legislation makes it unlawful for app stores to offer TikTok. However, individuals who currently already have the app will not be prohibited from using it.

TikTok must address security concerns related to Chinese ownership to avoid a potential ban. This would help address potential foreign influence issues over the app and likely mitigate national security concerns. There has been talk of a forced sale by the U.S. government seeking to separate the app from its Chinese owners, demanding the deal through the Committee on Foreign Investment in the U.S. (CFIUS). So far, however, the Chinese government said it would strongly oppose any forced sale of the company.

A potential ban on TikTok has also raised concerns regarding civil liberties and the impact it may have on the advertising industry. There could be significant First Amendment implications to banning a service over 150 million Americans use to express themselves and communicate. The ACLU has raised such concerns about a bill banning the platform. Jenna Leventoff, Senior Policy Council at the ACLU, states, “The Senate bill would ultimately allow the Commerce Secretary to ban entire communications platforms, which would have profound implications for our constitutional right to free speech. If the Secretary uses this newfound power to ban TikTok or other communications platforms without evidence of overwhelming, imminent harm, it would violate our right to freedom of expression.” In an era of unparalleled innovation, this situation could set a precarious precedent for other social media platforms and foreign technology companies, with long-term implications that are hard to predict.

Furthermore, TikTok is currently being used by over 5 million companies to connect with their target audience, most of which are small and medium-sized businesses. If the platform were banned, these companies would need to rethink their marketing strategies to maintain their revenue streams. This shift in digital spending patterns may lead to a boost in market share for competing companies. Still, it could also negatively affect businesses and independent creators who rely on TikTok as an essential platform. Another interesting development is even amidst the threat of a ban TikTok is rolling out a new affiliate marketing program for American content creators, so the app certainly does not seem to be slowing down. Even with a possible looming ban, advertiser spend on the platform grew 11% in March, top advertisers are continuing to spend on the platform, and major agencies are not advising clients at this time to pull back on ad spend.

Despite TikTok’s stated commitment to fostering creativity and bringing joy to its user base, the ongoing scrutiny from the public and lawmakers alike has reignited the broader discussion about data privacy. While it remains unclear whether the app will be banned in the U.S., digital marketers should closely monitor the situation as TikTok’s advertising revenues have increased significantly in recent years. By closely monitoring their status, businesses and advertisers can proactively stay ahead of the curve and make well-informed decisions that consider both the legal and marketing implications of any potential changes. Doing so will help to ensure that marketing plans remain effective and adaptable to a rapidly evolving digital landscape