Congressional push to ban TikTok advances. How worried should marketers be?
TikTok’s 100 million-plus US users could lose access to the app should a new bill be signed into law. It’s a possibility that would set off a bomb in adland too, where advertising investments have been increasingly funneled to the video-sharing platform. Here’s what you need to know.
TikTok claps back at lawmakers who’ve advanced a bill that would require Biden to ban the app in the US market / Adobe Stock
TikTok today issued a statement slamming congressional efforts to advance a piece of legislation that would create a new avenue for US president Joe Biden to issue a wholesale ban on the popular video-sharing app in the US.
Earlier today, the US House Foreign Affairs Committee voted to advance the Deterring America’s Technological Adversaries (Data) Act, which would peel back rules dating back 35 years that protect creative content from being subject to US sanctions. As it’s currently drafted, the bill would go so far as to require the president to issue far-reaching sanctions on Chinese companies that transfer US citizens’ “sensitive personal data” to organizations or individuals based in or “subject to the influence of” China. The bill has seen a lightning-fast ascent since it was introduced last Friday.
“TikTok is a national security threat ... It is time to act,” Representative Michael McCaul, the Republican chair of the Foreign Affairs Committee, said. “Anyone with TikTok downloaded on their device has given the CCP [Communist Party of China] a backdoor to all their personal information. It’s a spy balloon into their phone,” he said, nodding to recent news of the Biden administration shooting down a handful of aerial balloons believed to be Chinese surveillance devices.
For TikTok, owned by Chinese tech company ByteDance, the passing of the Data Act would constitute a nightmarish can of worms. Not only would the law lose the app some 100 million US users – it would also issue a major blow to the company’s bottom line by excising the hefty portion of its ad revenue that comes from the US market.
Today, TikTok’s ad business is booming: the app is on track to reach $18.04bn in ad revenue this year, a 55% jump from 2022, per data from Insider Intelligence’s eMarketer. TikTok’s US revenue alone is expected to hit $8.75bn in 2023 – making the US a critical market for the company.
TikTok condemned the advancement of the Data Act in a statement today, writing: “A US ban on TikTok is a ban on the export of American culture and values to the billion-plus people who use our services worldwide. We’re disappointed to see this rushed piece of legislation move forward, despite its considerable negative impact on the free speech rights of millions of Americans who use and love TikTok.”
The decision to advance the Data Act is the latest in a growing effort to crack down on TikTok and its parent company ByteDance – largely over data privacy and security concerns. On Monday, the Biden administration said it will require that TikTok be wiped from all federal devices within 30 days. Broader bipartisan efforts by the US Federal Trade Commission and by members of Congress to combat consumer data privacy and security risks are only adding fuel to the fire.
However, the committee vote today was split down party lines; Democrats largely opposed the bill, arguing that its advancement has been unnecessarily hastened and that it demands more due diligence and evaluation. Specifically, Democrats have raised issues with the fact that the Data Act doesn’t, in its current form, have clear-cut rules for how the ban would be enacted and enforced.
What are the Data Act’s prospects of passing?
As it stands, experts in the marketing space aren’t bullish on the Data Act’s prospects in Congress. “I doubt the Data Act will pass because it is too specific to TikTok and not broad enough to encompass all other apps that also infringe on privacy rights,” says Linda Xiao, North America director of creative technology and strategy at experiential agency Momentum Worldwide. In particular, she points out, “To argue that TikTok is inherently untrustworthy because of its ties to the Chinese Communist Party is just incorrect – many native US companies also collect copious amounts of data and then sell that data to third parties.”
While Xiao feels that stronger US regulations on consumer data collection are called for, “banning one of the most popular apps in the world doesn’t solve the issue of data usage and privacy.”
It’s a belief shared by other leaders in the space, who assert that TikTok is no worse than any handful of US tech giants that also traffic in user data. “The reality is that this sensitive data in question is collected by many platforms – not only TikTok – and is available in the bidstream, or for purchase on the open market, absent ‘know-your-customer’ or other customer diligence requirements, or substantive federal privacy protections,” says Arielle Garcia, chief privacy officer at media agency UM Worldwide.
‘Just a distraction’ from the real issue
Legislative efforts like the Data Act distract from what should be a bigger priority for US lawmakers: passing comprehensive federal privacy legislation, says Garcia. Though Congress came closer than it had been in decades to reaching such a goal in 2022, with the American Data Privacy and Protection Act (ADPPA), efforts have since stalled, with lawmakers grappling over how far data protections should go. The US’ landscape of privacy regulation remains something of a patchwork quilt, with five new state-level laws set to go into effect this year and more coming down the pike.
The Data Act – like its predecessor, the Averting the National Threat of Internet Surveillance, Oppressive Censorship and Influence, and Algorithmic Learning by the Chinese Communist Party Act (Anti-Social CCP Act), introduced late last year by Republican Senator Marco Rubio – is unclear in its terms, Garcia says. Specifically, she notes: “It is unclear what it means for a company to be ‘subject to the influence of China’ or how it would be determined whether an application ‘may be facilitating or contributing to’ foreign counterintelligence, influence operations or election interference.” Neither she nor Momentum Worldwide’s Xiao believe the bill will pass in the Senate, even if it survives the House.
Still, Xiao says all the talk of banning the app in itself “does affirm a lot of users’ suspicions about TikTok,” particularly when it comes to TikTok’s algorithmic power to shape discourse and opinions. “As society grows and adapts, so will the tech and tools we use to understand it – TikTok is one of those many tools, and it is time to rein it in – but banning it completely would be [just as bad] as ignoring it.”
At the time of publishing, TikTok has not responded to requests for comment.
In other news, TikTok today announced it is introducing new screen time controls for teens and families, which could help address growing concerns about algorithmic influence and the impact of social media on teens’ mental health.
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