On Thursday, Italy’s competition watchdog announced fines totaling 10 million euros ($10.94 million) imposed on three subsidiaries of the social media behemoth TikTok. The penalty was levied due to insufficient content moderation checks, particularly regarding material that could pose risks to young or vulnerable users. This ruling deals another setback to TikTok’s parent company, Chinese firm ByteDance (BYT.O), which faces mounting regulatory pressure worldwide to safeguard underage users and tackle online piracy.
TikTok, which boasts 150 million monthly active users globally, is facing intense scrutiny in the United States over its relationship with Beijing. There are worries that the Chinese government could use it for espionage and disinformation campaigns targeting American users. Its ties to the Chinese government have fueled speculation that Washington may eventually ban it from the country, a prospect that has rattled its investors and led some users to download alternative video apps such as Instagram-owned rival Reels.
On Wednesday, the House of Representatives passed a bill giving TikTok’s owner six months to divest its U.S. assets or face a ban, setting up a potential legal battle that could test the limits of free speech in America. Its passage came after a closed-door briefing with lawmakers by a top national security official, who warned them of the dangers of letting Chinese companies control their data during heightened tensions with Beijing.
An essential worry is that China’s law on foreign-funded entities that operate in the country requires them to hand over personal information to government officials when asked. While TikTok has denied such requests and boasted that it has never given the Chinese government access to its users’ data, experts say it is difficult for them to verify such claims independently.
During a Senate hearing last year, TikTok CEO Chew was peppered with questions about the Chinese government’s influence over the company and his ties to it. The questions, which often focused on the 1989 Tiananmen Square massacre, drew parallels to the U.S. Red Scare of the 1950s.
But Chew, a Singaporean military reservist, was not able to assuage lawmakers’ concerns, even when he noted that the video that teenagers make on TikTok might come back to haunt them if they later land a high-level job at a notable American firm or work in the government.
Experts say a more effective way for TikTok to calm the fears of many legislators might be to proceed with a plan it had outlined toward the end of President Trump’s term to sell the company to a U.S.-based partner. Such a move could ease the concern that China might force ByteDance to turn over data about its 170 million U.S. users. However, critics say that any such plan might be subject to challenges from the First Amendment court. ByteDance has also pushed a “Project Texas” plan to put American data out of reach by Chinese authorities. However, it has yet to disclose how the project is being implemented.
