TikTok really is the central front in the US-China tech war

Can you explain the future of the internet in 15 seconds while lip-syncing your favorite dance-pop track? If so, you belong on TikTok, the vertical video app popular with Generation Z and with (until recently) as many as 1 billion users.

Until recently because on June 29, TikTok was banned in India, along with 58 other Chinese smartphone apps, including the messaging giant WeChat, the Clash of Kings mobile video game, and Baidu maps. India, which has more internet users than any country other than China, accounted for nearly half of users downloading the TikTok app in 2019. If the future of the internet will be determined by a technology war between the United States and China, India is the key emerging-market battleground. The digital rupture between China and India virtually ensures that the latter will land firmly in American cyberspace.

India's app ban came in the wake of border skirmishes with China that resulted in dozens of deaths—but officially, the Chinese app ban is linked to concerns over privacy and the misuse of user data. There have long been serious security issues about the collection, retention, and analysis of personal data by Chinese companies. But this time, India went further: It announced that the operations of the 59 Chinese apps were "prejudicial to [the] sovereignty and integrity of India."

India isn't alone in raising privacy concerns over TikTok, the first Chinese app to have gone viral worldwide, to the level of a national security threat. American analysts have recently made similar arguments, suggesting that the Chinese government could use TikTok to spread disinformation to influence US politics, extend Chinese censoring practices abroad, or collect personal data to blackmail Americans, over 40 million of whom downloaded the app in 2019.

At first glance, it may seem ridiculous to investigate a Chinese app that is primarily used by teenagers to post silly dance videos.

At first glance, it may seem ridiculous that the US Treasury's Committee on Foreign Investment in the United States (CFIUS) would be investigating a Chinese app that is primarily used by teenagers to post silly dance videos (though it does sometimes host serious political content as well). Yes, TikTok has been accused of suppressing videos about pro-democracy protests in Hong Kong and removing a video (since restored) that was critical of China's human rights record, but many US companies have been accused of doing much worse. Privacy concerns and algorithms with a political filter can be troubling but hardly rise to the level of national security threats. Hawkish commentators, including US Secretary of State Mike Pompeo, often seem to be flailing to find reasons to ban TikTok, apparently feeling that there's a problem but failing to put their finger on it.

The critics are right. TikTok and other Chinese social media apps really do pose a threat to national security, even if the threat is hard to identify because it can't be isolated in any one spot. The threat lies in the virtual networks that connect the dots of users and content, not in the dots themselves.

The battle for (social) network dominance is at the heart of contemporary geoeconomics. From the outside, TikTok looks like a video-sharing service, but seen from the inside, it's an enormous social graph connecting a billion users, many billions of videos, music publishers, advertisers, and of course the company's own servers. That social graph is also generated by a messaging system and a payments network, both built on the success of the video service. Although TikTok's videos consist mainly of user-generated content, the platform is more like an addictive video game than a Chinese version of YouTube. The short-format videos demand constant user engagement, generating high interaction levels and a reported average view time of 45 minutes a day.

Close China watchers know very well how games can be leveraged into network power: TikTok's Chinese competitor WeChat used gamification to build its empire. Owned by the Shenzhen-based company Tencent, WeChat began as a simple messaging utility, similar to Facebook's WhatsApp, but hit on the idea of using virtual red envelopes to encourage users to send micropayments to each other. WeChat's red envelopes gamified the Chinese custom of giving cash gifts for special occasions, allowing users to offer gifts as small as 1 Chinese cent and to set up little games of their own for giving them. For example, a common game is to offer a small packet to the first one of your friends who claims it.

More ominously, the social graphs that underlie TikTok can also be used for security profiling, contact tracing, and even blackmail.

Once WeChat had developed a large social graph consisting of people densely tied together by messaging and financial transactions, it began offering a wide array of services, including ride hailing (via DiDi, China's answer to Uber), apartment hunting, and video games. WeChat's archrival Alibaba (often called "China's Amazon") quickly copied the strategy to help build up its own payments service, Alipay, now rebranded under the umbrella of Alibaba's Ant Financial. Ant Financial's 2017 bid to buy the US payments company MoneyGram was stymied by CFIUS resistance.

And with good reason: Though viral teen videos may be (mostly) harmless, control over a country's payments infrastructure is serious business. The United States routinely leverages its influence over global payments networks to apply financial sanctions on recalcitrant regimes. Recognizing this, China, Russia, and Iran have each developed domestic alternatives to the US-dominated SWIFT interbank payments system. They have also developed their own credit card systems as alternatives to Visa and Mastercard.

In China, where mobile payments are now ubiquitous, WeChat and Alipay together dominate a mobile payments market that nearly exceeded $50 trillion in transactions in 2019. Were a Chinese company to gain such dominance over mobile payments in another country, whether India, another neighbor, or even the United States, it would give the Chinese government a powerful tool for imposing financial pressure or sanctions of its own.

Payments processing, however, is only the very sharp tip of the social networking iceberg. The social graphs that underlie TikTok and other social apps can form the basis for telecommunications, marketing, credit scoring, transportation, and a host of other services. More ominously, they can also be used for security profiling, contact tracing, and even blackmail. It was presumably such fears that led CFIUS to force the Chinese company Beijing Kunlun Tech to sell the LGBTQ dating app Grindr to a US-based company in 2019. Of course, the personal data held by the app might be seen as compromising, even in today's sexually enlightened world, and it probably didn't help Grindr's case that it was caught reporting users' HIV status to third parties. But the social graph owned by Grindr is potentially much more dangerous, showing the chains of connections between people who may not even know they are linked.

The European Union probably has sufficient geoeconomic power to regulate and ultimately control the social networks that operate within its jurisdiction. India may have to use the blunter instrument of banning. The United States probably has enough influence to force a company like ByteDance, the Chinese company that owns TikTok, to divest any subsidiaries that operate in the United States. It should not hesitate to wield that influence.

To ban TikTok outright, as India has, would be profoundly illiberal—but to allow it to grow unhindered would be foolishly risky.

It may not be fair that the United States, alone among the world's countries, can force foreign firms to restructure their businesses to suit its national security needs. Nonetheless, this is the geoeconomic reality that multinational firms must face. China can afford to wall off its internet entirely; India can shut out specific apps; the EU can bludgeon companies into regulatory compliance. Only the United States can reshape the structure of the internet itself. That power should be used carefully and sparingly, but TikTok is a case where it should be applied.

As bizarre as it may sound, TikTok really does pose a serious threat to US and other nations' national security. Other Chinese-owned social networking apps are less dangerous because they have demonstrated limited appeal outside China. TikTok is the first one to break its cultural bonds and go viral in the rest of the world. It is thus the crucial test case that will set the precedent for how free societies handle Chinese social networks. To ban it outright, as India has, would be profoundly illiberal. To allow it to grow unhindered, however, would be foolishly risky. Severing TikTok's operational links to China through a forced divestiture may be the best solution that lets the app's owners reap a just reward while protecting the world from the consequences of enjoying those silly dance videos just a little too much.

Salvatore Babones is an adjunct scholar at the Centre for Independent Studies in Sydney and an associate professor at the University of Sydney. Twitter: @sbabones

Disclaimer: This article first appeared on Foreign Policy.com and is published by special syndication arrangement.