Concerns about ByteDance stem largely from a national security law that gives the Chinese government power to access large swathes of business information.
For several years, ByteDance’s TikTok has been the focus of lawmakers and intelligence officials who fear it could be used to spy on Americans. Those concerns came into focus during a five-hour grilling of TikTok’s CEO in March.
But while TikTok has been in the spotlight, other Chinese apps with similar problems are also hugely popular in the US.
Concerns about ByteDance stem largely from a national security law that gives the Chinese government the power to access large swathes of business information if it claims it is for national security purposes. Intelligence officials and U.S. lawmakers fear the Chinese government could have access to essentially any information that China-based app companies have collected from American users, from email addresses to user interests and driver’s licenses.
But that doesn’t seem to have affected many consumers, as several China-based apps continue to thrive in the US.
For example, shopping app Temu, owned by China-based PDD Holdings, has been ranked second in the Apple App Store among free apps since late May. It also ranked No. 12 among digital retailers in the 2022 holiday season for unique visitors to its website, beating out stores like Kohl’s, Wayfair and Nordstrom, according to Insider Intelligence, which also credits TikTok exposure for its rise .
Meanwhile, ByteDance-owned apps CapCut and TikTok are ranked fourth and fifth on the App Store. Chinese fast fashion brand Shein ranks 14th.
And from late March to early April, after the TikTok CEO’s hearing before Congress, ByteDance’s Lemon8 saw nearly 1 million downloads in the US, Insider Intelligence reported based on data from Apptopia. It’s an app with similarities to Meta’s Pinterest and Instagram.
These apps share some of the features that have worried the US government about TikTok, including whether some of these companies adequately protect US user data when operating outside of China (TikTok emphasized that US user information is stored only on servers outside China) . Like TikTok, these apps collect user information, can analyze trends that interest them, and use algorithms to target consumers with products or information that are likely to keep them engaged with the service.
But China and social media experts say there are significant differences between these apps and TikTok, which may explain their relative lack of attention. Among the most important of these characteristics is the scale of their presence in the US.
Even as they grow, the US user base of many popular Chinese apps is still dwarfed by TikTok’s massive audience of 150 million active US users.
TikTok sister app Lemon8, for example, has about 1.8 million monthly active users in the US, according to Apptopia.
While TikTok has had 415 million downloads in the US since its launch here, CapCut has had 99 million, Temu 67 million and Lemon8 1.2 million, according to Apptopia.
Only Shein surpasses TikTok in downloads among this group of apps, although it launched much earlier in the US in 2014. Shein’s app has had 855 million downloads in the US since its debut, although Apptopia estimates it has about 22 million monthly active users.
“An app with a thousand or even a million users in the US does not present the same pervasive cybersecurity threat as an app with 100 million users,” said Lindsay Gorman, senior fellow for emerging technologies at the German Marshall Fund’s Alliance for Securing . Democracy.
Gorman said that as the US examines the threat posed by TikTok, it should also develop a framework for how to assess the relative risk of Chinese apps. Scale should be one factor, he said, and the type of app, including its ability to spread propaganda, should be another.
“The ability of a Chinese technology platform to represent critical information infrastructure in a democracy must be part of that calculus when assessing risk,” Gorman said. “That’s where I think the analogies with electricity grids or energy infrastructures apply. We will not allow an authoritarian regime to build important elements of our energy infrastructure and rely on an authoritarian regime for it.”
This means that an app like ByteDance’s CapCut may pose a lower risk, both because of its smaller user base and because it’s intended to edit videos rather than distribute them.
“We’re really in the early stages of even recognizing that there really is a need for broader characterization and categorization,” Gorman said, adding that instead of playing catch-up with Chinese technology that poses a threat to U.S. national security, the country needs to develop a more systematic framework.
However, in the meantime, US consumers continue to turn to Chinese apps.
“Among the most downloaded apps consistently are those based in China, such as Temu and CapCut,” said Jasmine Enberg, principal analyst covering social media at Insider Intelligence. “And of course, there’s Lemon8’s early development, which suggests that appetite for Chinese apps in the US is still growing.”
For e-commerce applications, the risk of spreading harmful misinformation may not be as high as on a social media service. An e-commerce platform like Temu or Shein is probably a less viable platform for spreading propaganda than a video app like TikTok.
“People don’t really spend the same amount of time on commercial apps and aren’t necessarily exposed to the same kind of content that could potentially have a negative impact on young people,” Enberg said. “Also, I don’t necessarily think the China connection for some of these apps is that clear to the average consumer, and I also don’t think consumers actually go in thinking about where the apps they’re using are coming from. .”
However, the US could find cause for concern. A recent CNN report found sister company Temu Pinduoduo, a shopping app popular in China, contained malware. The parent company of both apps, PDD Holdings, did not respond to a request for comment. Research staff at the U.S.-China Economic and Security Commission highlighted that report in their assessment of Temu’s data risks, though an analyst recently told CNBC that Temu has not been as “aggressive” in seeking access to consumer data as the Pinduoduo.
At least one group saw the pressure on TikTok as an opportune time to raise concerns with another Chinese company popular in the US: Shein. The Shut Down Shein group, which is a “coalition of individuals, American brands and human rights organizations,” according to executive director Chapin Fay, launched the day the TikTok CEO was brought before Congress.
“We were kind of agnostic about the timing, but we wanted to make sure that while people are talking about TikTok, there’s this other badass actor, Shein, who’s also collecting data and doing it all under the radar and also doing these other even worse things like slave labor,” said Fay, managing director of consultancy Actum.
The group specifically takes issue with Shein’s alleged use of forced labor, as Bloomberg reported last year that tests revealed cotton clothing shipped to the U.S. was linked to an area in China where the U.S. government said forced labor is practiced. China denied the use of forced labor.
Shut Down Shein is also protesting the company’s alleged use of an import loophole to avoid tariffs. Through the minimal trade tax exemption, the group says, individual customers become importers of fast fashion products, a practice that emerged in a recent hearing by the House Select Committee on Strategic Competition between the United States and the Chinese Communist Party.
A Shein spokesperson said in a statement that it “complies with the internal tax laws of the countries in which it operates.” The spokesperson also said Shein has “zero tolerance for forced labour”, takes visibility throughout its supply chain seriously and requires suppliers to follow a “strict code of conduct”.
Fay said it’s important to recognize that the way Shein has been able to grow her brand and gain new customers, largely through so-called influencer hauls, is through TikTok.
Faced with national security concerns about TikTok, lawmakers have considered several proposals that could lead to a ban. However, critics fear that some proposed solutions could create a slippery slope of unintended consequences. And some say the most effective long-term solution to curbing the use of Chinese apps may be to foster an environment for strong alternatives.
Perhaps the most important of the bills that could lead to a ban on TikTok in the US, the RESTRICT Act, would give the Commerce Secretary the power to recommend banning technology originating from a select group of foreign rival countries if they determine that the risks is not adequately mitigated otherwise.
Although the proposal quickly garnered serious attention for its group of sponsors, including Senate Intelligence Committee Chairman Mark Warner, D-Va., and Commerce Communications Subcommittee Ranking Member John Thune, R-S.D., since then it seems to be losing the early momentum. That’s partly because of concerns raised by the tech industry and others that the bill could give the executive branch broad authority to seek bans on certain technologies.
“While I understand that Americans enjoy the convenience of Chinese e-commerce and the creative tools of many Chinese communication apps, we must take into account the fact that these companies ultimately comply with the requirements of the Chinese government,” Warner said. statement. “We’ve had an important and overdue conversation about the predatory and invasive practices of American technology companies in recent years. These same concerns apply with the growing influence of these foreign apps — and are then exacerbated by how these DPRK-based companies serve as instruments of DPRK power.”
One of those critics of the bill’s current scope is Andy Yen, CEO of Proton, which makes an encrypted email and VPN service. While Yen believes that TikTok should be banned in the US, he fears that the RESTRICT Act is currently too broad to effectively do so without additional consequences.
In a recent blog post, Yen argued that the bill would give the Commerce Secretary overly broad power to designate additional governments as foreign adversaries, and he feared that ambiguous language in the bill could be used to punish people who use VPNs to access apps which are prohibited in the USA.
In the post, Jen suggested that these issues could be addressed by changes to the bill’s language to make it more targeted and limited in scope.
Speaking recently on the “Pivot” podcast, Warner emphasized the need for a rules-based approach that could be legally supported to counter the technology from foreign adversaries. He said he believes criticism of the bill, including that it would target individual VPN users or that US companies operating in China could be caught in enforcement action, is not valid, though he said he is open to amending the bill to make it clearer .
“There is a very legitimate national security concern here,” Yen said. “So I think it’s something that regulators have to deal with and that’s why Congress is trying to do something. But I think we have to do it in a way that doesn’t undermine the values of freedom and democracy that make America different from China.”
However, a ban on TikTok would have other effects in the US, such as giving more market share to existing US tech giants such as Facebook and Meta’s Instagram. Proton has been an active supporter of antitrust reform to create what some companies see as a more level playing field for technology developers in the US.
Yen said the solution to creating more competitive digital markets in the U.S. is not to allow dangerous Chinese companies to run rampant, but rather “to have a level playing field that will allow other American or European companies to compete fairly in the U.S.” .
That’s a goal shared by Jonathan Ward, a China expert who founded the consulting firm Atlas Organization.
“The best way we can do that is to create alternatives,” Ward said. “Because even if these companies don’t take root in our own market, even if we are able to deny them access here, as we did with Huawei, they can flourish in other parts of the world,” he added, referring to the Chinese company telecommunications that has been placed on a list of US entities for national security reasons.
