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Home / World / The TikTok survey is the latest example of US focus on China's access to data

The TikTok survey is the latest example of US focus on China's access to data

A TikTok logo is displayed on a mobile device in Mountain View, California on November 2, 2019 as a photo illustration.

Yichuan Cao | OnlyPhoto | Getty Images

With TikTok millions of users can record 15-second clips to trendy pieces of music. It has picked up on the millennial theatrical experiences and helped turn Lil Nas & # 39; s "Old Town Road" into a blast. According to the US government, this can now pose a national security risk.

The US Foreign Investment Committee (CFIUS) has contacted TytTok's Chinese parent, Bytedance, over concerns about acquiring the social media app Musical .ly represents a national security risk, a person familiar with the situation told CNBC , The investigation, reported last week for the first time by Reuters, is partly due to the dangers that the committee sees through the Chinese government's access to the app's data and user profiles, the individual said.

CFIUS turned to Bytedance for a number of US legislators, including Senator Marco Rubio, R-Fla., Senate Minority Chuck Schumer, DNY., And Sen. Tom Cotton, R-Ark Company Announced Situation Reliable

The investigation, which has not yet turned into a complete investigation, is a sign that CFIUS is focusing more on vulnerabilities in the face of mounting geopolitical tensions and increasing focus on big tech that provide data.

The deal, completed two years ago ̵

1; in November 2017 – has no real indication that CFIUS would care for that, "said Scott Flicker, chairman of the Washington office at law firm Paul Hastings.

CFIUS focusing on potential International data security risks

In the Foreign Investment Risk Review Modernization Act, CFIUS has explicitly defined its scope to provide companies with "sensitive personal information". Access to "sensitive personal information" was at the heart of CFIUS 'decision earlier this year that Grindr's Chinese parent must divest its stake in the gay dating app, and CFIUS fears that China could blackmail users of the gay dating app who tried their sexual ident to hide it.

Grindr's Chinese parent must find a buyer by 2020.

In September, CFIUS, chaired by the Finance Department, has companies that have access to "sensitive populations," or those that have data on sensitive populations because of their breadth. It defines such companies as companies with more than 1 million accounts.

ByteDances apps worldwide have 1.5 billion active users per month. Facebook has 2.7 billion monthly users in its products, and Google has 1.5 billion active users worldwide.

"It's not entirely clear whether CFIUS focuses primarily on cybersecurity and espionage, or targets big data for marketing purposes:" Is there anyone out there who can use those massive records to target messages? " Said Paul Marquardt, partner of law firm Cleary Gottlieb Wohin's agency.

In the background are global economic and political struggles that add another dimension to the TikTok story, while CFIUS is an independent agency that is the largest Part composed of professionals, it is active while the US and China engage in high-level talks on trade and Internet issues.

President Donald Trump has repeatedly accused China of cheating on trade, with signs of progress in recent talks between, they follow a series of "tit for tat" tariffs the two nations. Legislators on both sides of the aisle have pointed to China's lack of intellectual property by US companies and its appalling human rights record under President Xi Jinping. Further information, unless a full investigation is initiated.

"Their response to political control is to make sure they can say they've done their work and defended their process," Marquardt said.

A Finance Ministry spokesman told CNBC this with CFIUS "does not comment on any specific CFIUS cases, including whether or not certain parties have submitted communications for review".

TikTok spokesman said the company "could not comment on ongoing regulatory processes", "but has made it clear" that we have no higher priority than to win the trust of US users and regulators. Part of this effort involves working with Congress.

"Powerful Risk Vector"

s like US regulators are wondering if the country's own companies have access to data that is more of a threat than reward.

"In the last 20 years, it has promising to build a business model that involves the monetization of personal data. Now, in 2019, CFIUS makes clear that personal data can also be a very powerful risk vector, "said Mario Mancuso, director of international commercial practice and national security practice at law firm Kirkland & Ellis.

Twitter and Facebook announced in In August, they had blocked numerous accounts allegedly linked to a Chinese disinformation campaign against pro-democracy demonstrators in Hong Kong: Facebook and Google are both fighting multiple antitrust laws and defending the power that data access gives them.

David Cicilline, DR.I , who heads the company's antitrust investigation of Google and other technology companies, criticized Google over its plans to acquire Fitbit health app last week, arguing that the deal gives him access to "deep insights into the most sensitive areas of Americans " Information – how her health and location data "he argued will" further consolidate his market power ".

New York Attorney General Letitia James said the 47 Attorn Facebook's general investigation into anti-competitive activity is investigating whether it has "put consumer data at risk".

Facebook's own attempts to expand in China were thwarted, though CEO Mark Zuckerberg has well-publicized the smoggy Beijing. Meanwhile, the social media giant is facing direct competition from TikTok, which has opened an office near Facebook's headquarters to hire employees. Zuckerberg's goal at TikTok was to censor its content in a speech that criticized Facebook's policy of banning counterfeit political ads.

From the perspective of tightening regulations, some technology leaders have focused on China, arguing that data is better served when owned only by US companies.

"I've heard this in private meetings from both sides of the aisle that people worry about the size and power of technology companies, but also in the United States there are concerns about the size and power of Chinese tech companies, and you know, the realization that these companies will not be dissolved, "said Sheryl Sandberg, Facebook's chief operating officer, to CNBC in May.

"And so the question for us is how to do it We make sure we protect privacy, how do we make sure we work with government agencies to protect elections, how do we ensure the right content on Facebook and how do we ensure that the right legal framework exists? Work "

– CNBCs Lauren Feiner contributed to this report.

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