TikTok: the clock of the administrative measures is ticking
Amidst the US-Chinese technological war, recent skirmishes around TikTok have gained
particular momentum. The Chinese-owned TikTok is under pressure from President Donald
Trump to sell its US operations or face a ban. While companies including Microsoft, Walmart,
and Oracle were reportedly bidding to buy TikTok, the new rules from China could slow down
negotiations. As a result, the Internet could become even more splintered along geopolitical lines,
making it increasingly difficult for companies to do business in both countries simultaneously.
A few days ago TikTok got another reprieve from the Trump administration’s attempted ban due
to three influencers: three TikTok creators who were concerned that the ban would prevent them
from earning a living. A federal judge in Pennsylvania blocked the government efforts and
granted a preliminary injunction against a series of bans by the US Commerce Department. Thus
the restrictions were put on halt before November 12 th 2020 when the prohibition could get into
full effect. According to the judge the Commerce Department had stretched beyond the scope of
its authority trying to impose limitations on TikTok. “The short videos created and exchanged on
TikTok are expressive and informative, and are analogous to the ‘films,’ ‘artworks,’
‘photographs,’ and ‘news wire feeds’ expressly protected under” the International Emergency
Economic Powers Act, the judge wrote.
In Hungary the Hungarian Competition Authority (HCA) initiated an investigation into TikTok
to scrutinise the platform with a focus on consumer protection as a part of its digital consumer
protection strategy. TikTok's capacity to generate vast amounts of consumer data and offer a
huge flood of ads has already attracted the attention of regulators. The overarching theme of the
Hungarian investigation is TikTok's potential failure to adequately inform consumers regarding
its functioning and policies, the data the platform collects and how the data is used. The HCA
raised concerns regarding the absence of information in Hungarian and the lack of effort to
control the exposure of young people to certain ads. In the past there were similar cases before
the HCA. In 2018 the HCA closed an investigation into Google and its messenger service. The
opinion was that Google had failed to ensure that consumers had a proper understanding of how
their data was treated by the tech giant and therefore were not able to make an informed decision
regarding the nature and costs of the service. In practice, Google escaped penalties with its
cooperative approach. Recently the authority established that the dating site Academic Singles
had misled consumers regarding the necessity to pay for services, the subscription options and
the cancellation policies. A fine of €4.5 million was imposed on Academic Singles and it had to
amend its practices fundamentally. In addition, the site had to send a correction notice to all of its
present and former customers and give sufficient publicity to the decision on its homepage. The
authority also fined Booking.com for using consumer psychology against its consumers and
failing to present payment options comprehensively. In February 2020 the HCA initiated an
investigation against Viber, the popular messenger service. The authority’s aim was to establish
whether the statement " free and secure" was merited considering Viber's policies.
The HCA continues to pursue its digital consumer protection goals and demands a high level of
transparency from undertakings participating in the digital transformation. This experience
shows that TikTok is facing a long and detailed review of its practices where severe penalties
cannot be excluded.
Compiled by Media 21 Foundation (Link)
