Politics of TikTok deal ‘pollutes’ intent of data security, expert says

The download page for ByteDance Ltd.’s TikTok app is arranged for a photograph on a smartphone in Sydney, New South Wales, Australia, on Monday, Sept. 14, 2020.

Brent Lewin | Bloomberg | Getty Images

SINGAPORE — The politics surrounding the future of TikTok’s operations in the United States could undermine the need for better understanding and assurances when it comes to protecting user data, a security expert said Thursday. 

Beijing-based ByteDance, which owns the popular short video sharing app, rejected Microsoft’s bid to buy TikTok’s U.S. operations and instead chose Oracle to become TikTok’s U.S. technology partner. Sources previously told CNBC that Oracle became ByteDance’s partner of choice due to the company’s close ties to the Trump administration and its willingness to accept a deal where it didn’t buy 100% of the assets. 

Political leanings of various parties involved in the potential transaction “further pollutes” concerns around data privacy and security, Marcus Fowler, director of strategic threat at cybersecurity firm Darktrace, said on CNBC’s “Squawk Box Asia.” Fowler previously worked for the CIA developing global cyber operations and technical strategies. 

“I do worry that any political leanings here could pollute the outcome of what we really want which is better understanding and better assurances with regards to data and security,” Fowler said. 

He explained that there needs to be more concrete, transparent policy for how companies should be handling user data, no matter where they sit or what country they are aligned with. 

It remains unclear if the U.S. government will approve a restructuring plan that would still keep TikTok’s U.S. business, including the data collected by the app on American users, under ByteDance’s control. 

President Donald Trump told reporters on Wednesday he was not ready to approve a proposal from ByteDance and said it must be “100% as far as national security is concerned.”  

“Is it if this goes through, well, the rest (of) other countries, other organizations (be) kind of like ‘Oh, this is all I need to do to get my company’s security practices over the bar, is I just need to align from a political standpoint rather than from a baseline of this is what security and security assurance looks like and this is the level of security I need to have in place in order to reach a bar that is acceptable’,” Fowler said. 

The United States has alleged that data collected by the app on American users could be accessed by the Chinese government and may be used for disinformation campaigns. TikTok has denied those allegations and said U.S. user data is stored in the country itself with a backup kept in Singapore.

The White House had imposed a Sept. 20 deadline for ByteDance to come up with a plan to sell the video app’s U.S. operations or be banned by Sept. 29. A deal would have to be done by Nov. 12. But Beijing had pushed back on a tentative sale of U.S. assets, saying it would need to approve a deal that involves exporting the lucrative artificial intelligence technology used by TikTok.

Relations between the U.S. and China have deteriorated considerably in recent years due to a trade war and a race to establish dominance in crucial areas of technology including 5G and semiconductors. Washington has targeted Chinese tech companies like Huawei and upped the pressure on the likes of ByteDance and Tencent, making it more difficult for them to operate in the U.S.

CNBC’s Alex Sherman contributed to the report. 

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