TikTok is holding its 2022 year-end event in Milan, Italy on December 13.
Claudio Lavenia | Getty Images Entertainment | Getty Images
TikTok is beginning to feel the sting of political and regulatory pressure in Europe, where the Chinese-owned app has largely avoided the scrutiny it faces in the US
European Internal Market Commissioner Thierry Breton warned TikTok CEO Shou Zi Chew at a meeting this month that the bloc could ban the app if it did not comply with new digital content rules well before the September 1 deadline.
It’s a marked shift from the EU’s near silence on TikTok, while US lawmakers were aggressive, banning the app from federal devices in December over national security concerns. A proposed bipartisan bill also seeks to block the app from operating in the US
Not that the EU is soft on technology. Europe fines US tech giants for breaching the EU’s General Data Protection Regulation.
The difference with TikTok is that the app is shielded from the crosshairs of commercial interests in Europe.
“There is no political demand to investigate Chinese organizations,” Hosuke Lee-Makiyama, director of the think tank European Center for International Political Economy, said in an interview in December.
“TikTok’s user base is much bigger than many people think in Europe,” he said. But, he added, “you’re not going to look very closely if they’re not stealing too much of your ad revenue.”
TikTok had about 275 million monthly active users in Europe as of December, according to Sensor Tower’s Abe Youssef, noting that’s more than a third of Europe’s population of about 750 million.
Data dragon TikTok is to be placed under the surveillance of European authorities. Europe must finally wake up.
Moritz Korner
MEP, European Parliament
TikTok was the most downloaded social media app last year in Italy and Spain, according to data.ai, formerly known as App Annie. The app takes second place in France and Germany, the data shows.
WhatsApp, owned by Facebook parent Meta, ranked first among social media app downloads in France and Germany and third in Italy and Spain, according to data.ai.
Meta reported $29.06 billion in revenue in Europe in 2021, a region the company defined as including Russia and Turkey. In contrast, TikTok recorded turnover of just $531 million in the European Union in 2021, according to the latest UK filing available, but that’s more than four times what it disclosed for 2020.
“It is taking some time for the European Commission to act on these issues,” said Dexter Thillien, lead technology and telecommunications analyst at The Economist Intelligence Unit.
“It’s not for lack of desire on the part of the European Commission to do something,” Thillen told CNBC in a phone interview. “They have their hands full with bigger companies.”
TikTok is not yet a giant on the scale of companies like Meta, Alphabet and Amazon when it comes to social media, advertising and e-commerce. But TikTok has become so popular that its app has inspired copycat products, like Meta’s short video Reels feature.
More than half of 16- to 24-year-olds in France and Germany use TikTok, according to data.ai.
Since its launch in 2016, TikTok has amassed a monthly global user base of more than 1 billion and cemented the careers of well-known media personalities, from the D’Amelio sisters to Addison Rae.
This gives it an attractive set of data to train its algorithms to aggressively target users with content that best matches their interests. TikTok’s parent company, Beijing-based ByteDance, has seen similar success in China with a local version of the app called Douyin.
A big fear among U.S. intelligence officials — and increasingly lawmakers in Europe — is that Beijing could influence how TikTok directs its users to engage in propaganda or censorship.
“TikTok’s success is the result of a failure of European politics,” Moritz Koerner, a member of the European Parliament from Germany’s Free Democratic Party, told CNBC via email.
“From a geopolitical point of view, the EU’s inaction on TikTok is naive.”
Corner is calling on the European Commission to put pressure on data protection authorities to take action against TikTok from 2019. He worries that the platform poses “several unacceptable risks for European users”, including “access to data by Chinese authorities, censorship, [and] tracking journalists’.
“The data dragon TikTok should be put under the surveillance of the European authorities,” Koerner said. “Europe must finally wake up.
Why Europe’s tone is changing
Last month, ByteDance admitted to using TikTok data of two journalists to track their physical movements, according to a widely circulated internal memo. Concerns about surveillance, in addition to the EU’s tough Digital Services Act, were a big topic of conversation at Chew’s meetings with EU officials earlier this month.
The DSA, which was approved last year, is yet to be implemented in Europe. EU officials are putting pressure on tech giants of all stripes to get their houses in order before a September 1 deadline, including TikTok.
“The EU takes privacy and data protection issues very seriously. And it’s building one of the strictest regulatory architectures for digital platforms, including TikTok, in the world,” Manuel Munitz, chancellor at IE University, told CNBC.
Under China’s counter-espionage and national security rules, TikTok’s parent company ByteDance and other Chinese tech firms would be forced to share user data with Beijing if requested by the government, experts told CNBC.
This was a cause for concern as the US pressured allies to ban Huawei, the Chinese telecommunications giant, in 2019. Addressing the National Intelligence Act at a 2019 press conference, a Chinese government spokesman said intelligence work should be carried out “according to the law” and urged people “not to take anything out of context”.
China’s foreign ministry did not immediately respond to a request for comment.
TikTok has acknowledged that data about its European users can be accessed by employees based in China, but denies ever sharing such information with the Chinese government.
The company, however, says it is committed to creating a robust system for processing the data of Europeans in Europe.
This reflects a big difference: European regulators have focused on data processing, while US regulators look for threats to national security.
Meanwhile, investigations into TikTok’s access to user data in China are “beginning to bear fruit,” according to Thillien.
Investigations take time. It took almost five years for the Irish Data Protection Commission to close its investigation into Meta’s targeted advertising practices, resulting in a fine of over $400 million.
The commission is investigating whether TikTok’s transfer of user data to China and the processing of data on minors violated the bloc’s strict GDPR privacy rules. An outcome of the Irish privacy inquiry is not expected until later this year or 2024.