Hello friends! I hope you had a great week!
A year ago I wrote about the discussion on the TikTok ban, however in the last months there have been some material developments on the case and I have come across some very interesting commentary that puts the story in the larger context of its geopolitics implications that I feel are interesting to investigate.
Just before we jump into the story, there’s an ice-breaker question that I have found fun to do at dinners and parties: what are the first 10 tiktok videos in your feed when you open the app? I feel that the algorithm often knows us much better than we know ourselves :)
In my case the top videos usually include some Juventus, Wood and Resin work (like the one below), inside of cars cleaning (that for some reason I find super satisfying to watch) and more recently sawing of giant frozen tuna fish.
What are yours?
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When I wrote about TikTok last year, I already mentioned how I think it is probably (as a user) the best form of entertainment ever invented. But that’s definitely too good for me to handle, reason why I removed it from my phone over a year ago when I realized I spent way too much time on the app!
Thanks to its incredible growth and the joy of millions who flick through its endless streams of content, TikTok has found itself at the vortex of a fierce debate on data privacy, national security, and the geopolitics of technology.
The topic became subject of mainstream media coverage a month ago, when the US House passed a bill that basically forces TikTok’s owning company to either sell or change the ownership structure of the company.
TikTok at a Glance
In less than a decade, TikTok has metamorphosed from a video-sharing platform into one of the largest entertainment consumer apps in the world, especially on younger demographics. The app is a rather basic form of entertainment (short videos, largely of people dancing, at least at the beginning) but the technology behind its feed sorting is actually one of the most interesting and advanced uses of Machine Learning in the world.
Its “tree architechture”, combined with very heavy tracking of users preferences (i.e. how many seconds you spend on a video, the likes, share, skips, etc) results into a super-personalized feed that is often composed of very deep vertical “branches”:
The part that sparkles all the controversy of the app is that TikTok is owned by the Beijing-based company ByteDance and when it achieved staggering success in terms of both user engagement and financial performance it started being on everyone’s map. In the fiscal year 2023, the platform generated $16.1 billion in revenue— +67% from the previous year. With 1.5 billion monthly active users in 2023, TikTok is on track to broaden its global user base to 1.8 billion by the end of 2024, with basically a third of the world population active on the app. As TikTok continues to captivate users worldwide, its Chinese counterpart Douyin mirrors this success within China's digital borders with over 750 million daily users.
On top of active users the incredible stats on TikTok are related to the time its users spend on the platform (and the reason why I disinstalled it!), which is significantly higher than all the other social media apps. The average is almost 1hr/day, over 3x more than Instagram!
China’s internal regulations
While TikTok operates with relative freedom globally, its Chinese version, Douyin, is tightly regulated by the Chinese government. This regulatory environment highlights a stark contrast in how digital platforms are treated based on geopolitical boundaries.
In China, Douyin faces stringent content restrictions, with a heavy emphasis on promoting educational material and filtering out content deemed unsuitable by the government. This level of control underscores a broader trend in China's approach to technology: a blend of nurturing domestic innovation while keeping a tight leash on what is consumed and how it is used. The key constraints for Chinese users include:
Content Monitoring and Censorship: All content must align with government standards, censoring anything deemed politically sensitive or likely to undermine social stability. Content is often required to go through a pre-publication review process to ensure it complies with the regulatory framework before it goes live.
Promotion of Educational Material: Douyin is required to actively promote content that is educational and deemed 'positive' by the government standards. The Government effectively over-rides the feed algorithm to promote science and math content to school kids, for instance.
Real-Name Registration System: Users must register with their real names, making them easily traceable and accountable for the content they post.
Time Restrictions for Minors: There are strict time limits on how long minors can use the app, aimed at curbing internet addiction and managing the digital exposure of younger users. Minors under the age of 14 are restricted to only 40 minutes of app usage each day. And furthermore the app can only be used between 6 a.m. and 10 p.m., preventing all overnight use by young users.
I will talk about the merits of the reciprocity argument later, but it’s very easy for one to wonder “If they’re limiting it for their own kids, why would they not accept us limiting it for ours?”.
The platform's ties to China through ByteDance have led to scrutiny over how it manages the vast amounts of data it accrues daily. For the US, the concern is twofold: the potential for this data to be mishandled, and the risk of foreign influence over American media consumption.
Privacy and Propaganda - data handling
TikTok’s secret sauce is the amount of data that it collects from every single user’s interaction on the app. This dataset is what allows the app to be so tailored and fast. The platform, though a hub for creativity, could become an unprecedented tool in the hands of those with hidden agendas.
Scott Galloway in his post casts TikTok as the forefront of a new war—”a war where data is the currency and attention is the territory. Imagine TikTok as a charming intruder. It dances into our lives under the guise of entertainment but could also carry out reconnaissance for other objectives, unbeknownst to the amused audience.”
The concern around the involvement of the Chinese Government on the way consumer apps are managed is not a total fantasy, and Alibaba's saga with Jack Ma stands as a stark reminder: if China's heavy hand can swiftly descend on its own tech giants, international platforms like TikTok could face similar scenarios. This isn't speculation; it's a pattern we've seen, and it warrants a measured approach to TikTok's presence in global markets.
Privacy and Propaganda - Content’s cultural influence
The other side of the concern with TikTok is that having such a powerful mean of mass communication could allow bad intentioned actors to “shape the narrative” in western countries. I actually recently read an interesting book about Putin’s raise to power and there was a paragraph that came to mind when thinking about TikTok (the book’s imaginary Putin adviser talking):
"Reason for a moment: Westerners are no longer interested in politics. If we want to attract their attention we have to talk about anything but politics. We need young girls giving beauty advice, video game enthusiasts, astrologers, guys like that, you know?
An Italian journalist has a very simple yet compelling argument on this, which I found thought provoking, and it also gave me a bit of historical context:
Imagine if during the 1970s, at the height of the Cold War, a company controlled by the Soviet Union had attempted to purchase a major American newspaper or CNN, or tried to obtain a license to establish its own TV channel in the United States.
It wouldn't have been possible, and no one would have been surprised.
At that time, as today, there were authorities and laws that regulate and limit foreign investments in strategic sectors. On the other hand, what would have been the benefits of such an operation for the United States? None. And the risks? At a minimum, the country's main adversary could have gathered sensitive data and information about the country, its people, its government, its economy. Moreover, such a powerful and influential medium, in the hands of a company directly or indirectly tied to a hostile regime, could have been used to harm the United States, divide its population, and expose it to Soviet propaganda.
One key aspects that critics of the bill flagged is the worryingly vague wording, which could potentially give the US government broad powers to define what constitutes a foreign adversary-controlled application. This debate opens up a Pandora's box of what such control could mean for American-owned companies and their global operations. The bill currently covers only “foreign adversary controlled applications” where for the time being the word “Foreign Adversary” means Iran, North Korea, China and Russia. But this obviously opens the box to future developments… And also, what do we mean by “controlled”? For instance, should we consider Tesla (that has a very strong manufacturing interest in China, and therefore surely has touch points with the Chinese Government) as “China controlled”? Where do we draw the line?
And more fundamentally: are Americans ready to allow the Government to decide what to allow and not allow American users to consume?
On the other side of the banning argument, it’s impossible to ignore how TikTok and the other social media apps are also a beacon of self-expression, especially for the younger crowd often ignored by traditional media. It’s where they can speak, and more importantly, be heard.
So, we need to address the elephant in the room. How do we safeguard user privacy and national interests without stifling the global conversation? We’re at a crossroads. The decisions made about TikTok could redefine digital governance globally.
Reciprocity
As TikTok's popularity soars, so does the intensity of the legislative spotlight upon it. Yet, in the Senate, the path forward is less clear. Majority Leader Chuck Schumer's hesitation suggests a more intricate debate awaits, one that scrutinizes not just TikTok but the broader implications for international business and digital sovereignty.
Arguments swirl around several core issues: reciprocity, stifling debate, and the risk of overreach. Reciprocity seems a straightforward argument—why should TikTok operate freely here if American platforms (Meta, Google) are banned in China? However, I am not really sure this is a good argument. I have always viewed this issue of reciprocity as shortsighted, arguably the fact that western countries allow Chinese companies to operate freely in wester markets is exactly what makes the west better than China, at least on the front of freedom of speech.
In this context I really appreciated one of the points made in this podcast episode while discussing this topic: “I think if there’s a case to be made about data gathering, or potentially spying happening, there could be several steps that could be made to secure this like: separating the entity, forcing data to be maintained in US soil, force a change of control etc. But more importantly we should make sure we enable users to opt-in and fully understand what data they’re giving and how these data are being use. I do not believe we should be paternalistic, as Government, and decide who runs what businesses but rather let informed users decide.”
Now that’s a very good point, and one that I fully concur with in principle, the only thing that makes me VERY nervous is that this company is not selling “Rice Noodles” (as another podcast guests puts it) but it’s acquiring data, in the age of AI and AGI. And also “Users are often not qualified enough to understand the implications of ceding the ownership of these data. This is similar to Pharma approvals, we acknowledge as users that we need a government agency (FDA) that fully understands the technical implications and that makes decisions to protect the interests of citizens”.
Considering the importance of datasets in developing AI technology, I am deeply concerned about the potential misuse by a government with malign intentions. My biggest worry is about the implications of allowing TikTok to operate unchecked. Are we truly aware of the potential consequences this might entail?
I fully hear and understand the concerns of those that claim this type of actions will likely lead to a path of regulatory capture, that in the past has not always lead to better conditions for users and citizens, yet the risk is too asymmetric in this case in my opinion and I would not take a chance… what do you think?
Have a fantastic weekend!
Giovanni