Analysis Of The Week: Toxic TokTik?​

By Alison Catchpole​
The Story

Tiktok, the social media juggernaut seemingly supercharged by worldwide lockdowns, is having a great year. According to Sensor Tower, “TikTok was the most downloaded and highest grossing non-game app globally in the first half of 2021, reaching nearly 383 million first-time installs and an estimated $919.2 million in consumer spending”.

Alongside its sister Chinese app Douyin, TikTok is now the most downloaded non-Facebook app in the world (Instagram, WhatsApp and Messenger are all owned by Facebook) – and TikTok owner Bytedance is the world’s most valuable startup (Hootsuite).

Most users are under 30 years old. Like YouTube, TikTok has cultivated deep relationships with its community to ensure that the content originators can make money and, thanks to a range of features, have their needs served. In a world where some 50 million people consider themselves to be content creators (New York Times), the market is ripe, and TikTok is ready to innovate; ‘TikTok Resumés’, launched on 7 July 2021, is a pilot running until the end of the month that aims to compete with LinkedIn and the traditional ‘send us your CV’ recruitment model. 40 companies, including retailer Target, and Mexican fast food chain Chipotle, have signed up.

The Background

Internet entrepreneur Zhang Yiming founded Bytedance in 2012, and has an estimated personal wealth of around $35.8 billion (Forbes). Bytedance created the Douyin app in 2016 to rival social media app Musical.ly - acquiring the latter in 2017 for $800 million (Brandastic), and merging the two under the TikTok brand. The most popular use of Musical.ly for its largely 13 to 18 year old demographic was the lip sync feature, and this continues to be the case.

Central to TikTok’s success is its algorithmic technology. Using micro-analysis of data such as screen time, how many times videos are shared, and what their content is, TikTok suggests the next video that a given person might like. The clean, ad-free interface has “created a monster that the company is now attempting to monetise” (The Sunday Times). Something the founder Eugene Wei refers to as an ‘interest graph’ can be generated by analysing the behaviour of users, which can be applied by businesses who want to bottle the TikTok magic formula.

What It Means For Businesses And Law Firms

In 2020, the Trump government raised concerns about TikTok hoarding user data, and threatened to shut the app down. Plans for a Walmart-Oracle takeover in the US were shelved in February under the new Biden administration, though Biden signed an executive order in June that would force tougher data protection for some Chinese apps wishing to continue in the US (The Guardian). Bytedance had announced plans for an Initial Public Offering, however, the increasingly tight controls wielded by Beijing caused a rocky start for Chinese ride-sharing app Didi shortly after its flotation on the American stock market, and the owners appear to have been dissuaded.

Data protection, exacerbated by the lack of social media regulation, is also of ongoing international concern. The Indian Government banned TikTok (India had been its biggest market) on 29 June 2020, along with almost 60 other Chinese-developed apps, following Beijing-Delhi tensions (Sensor Tower; NY Times). In October 2020, the Hungarian Competition Authority (HCA) initiated an investigation into TikTok, with a focus on data collection and consumer protection. The HCA noted not only the lack of Hungarian language information, but also a lack of effort to moderate ad content to younger users (The Lawyer).

In 2020, TikTok settled for $92 million in class actions brought under the USA State of Illinois Biometric Act, regarding the use of facial recognition technology (Lexology). In April 2021, former Children’s Commissioner of England, Anne Longfield, backed a case against TikTok, claiming that extensive personal data collection on under-13s was neither effectively regulated nor transparent. The plaintiffs’ lawyers Scott + Scott claimed the lack of sufficient consent and oversight was a “severe breach of UK and EU data protection law” (Financial Times).

But for all its issues, TikTok’s anarchic spirit, distilled into 15 second chunks, continues to appeal. “On Instagram, we are primped and preening, on Twitter, loudmouthed and strident, but on TikTok, we can just be weird,” stated a 2020 article in The Guardian. With three billion downloads, and a worldwide pandemic, weird seems to be in vogue.

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