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US Considers Banning TikTok Due to Its Ties to China


Sep. 3 2020, Updated 3:42 p.m. ET

Facebook’s shut down its TikTok-like app Lasso. The move might have been a victory for TikTok since it reduced the competition. However, the relief was short-lived. The US might completely ban TikTok due to its ties to China. Notably, India has already banned TikTok amid rising tensions with China about a border dispute. So far, Facebook stock has gained almost 10% since India banned TikTok and other Chinese apps on June 29.

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TikTok’s woes are far from over. The app is also leaving Hong Kong’s market. China tightened its grip on Hong Kong with a controversial national security law. The TikTok app will stop operating in Hong Kong within days. TikTok isn’t alone in responding to China’s Hong Kong security law. Facebook, Twitter (NYSE:TWTR), and Google (NASDAQ:GOOGL) have also paused their cooperation with Hong Kong police on user data sharing.

Zuckerberg thinks TikTok is China’s censorship tool

Currently, the Pentagon has banned soldiers from using the TikTok app on government-issued devices. There are concerns that China could use the TikTok app to spy on foreign governments. TikTok is very popular in the West. So far, people have downloaded the app over 2.0 billion times outside of China. Last year, TikTok beat all but one Facebook app in downloads, which increased its threat to Facebook.

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Like Facebook, TikTok makes money from selling advertising. The company has continued to challenge Facebook. TikTok has been poaching Facebook talents and going after its advertising clients. In recent weeks, the stakes have spiked in the Facebook and TikTok rivalry. Facebook faces an advertiser boycott, which could help its competitors.

In a bid to discredit TikTok, Facebook CEO Mark Zuckerberg said that the company is a threat to free speech. He suggested that the app helps China censor information abroad.

TikTok is owned by a Chinese company called “ByteDance,” which operates a TikTok-like app in China called “Douyin.”

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TikTok strongly denies having ties to China. However, the pressure on the company continues to increase. After the Pentagon’s bans, the Trump administration might place a total ban on TikTok and other Chinese social apps in the US, according to US Secretary of State Mike Pompeo. The administration has already banned Huawei from the 5G market in the US due to its ties to China.

TikTok tapped former Disney executive for CEO role

As TikTok faces the risk of a ban in the US, it wants to distance itself from China. Recently, the company tapped former Walt Disney executive Kevin Mayer as its CEO. Also, TikTok executives have talked about the company having its data centers outside of China.


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