After 107 million downloads in April, TikTok faces a European privacy probe

Questions over the privacy of popular video-sharing application TikTok have been raised by Dutch authorities, but scepticism can’t slow the rapid expansion.

Although other investigations around the world are far more damning, suggesting some very nefarious activities, let’s not forget giants can be taken down by unsuspecting means. After all, Goliath was conquered by a pebble and Al Capone was felled by tax evasion charges.

“A huge number of Dutch children clearly love using TikTok,’ said Monique Verdier, Deputy Chairman of the Dutch DPA.

“We will investigate whether the app has a privacy-friendly design. We’ll also check whether the information TikTok provides when children install and use the app is easy to understand and adequately explains how their personal data is collected, processed and used. Lastly, we’ll look at whether parental consent is required for TikTok to collect, store and use children’s personal data.”

The investigation will focus on whether TikTok effectively protects the privacy of Dutch children, and whether there would need to be any changes enforced on the team through regulation. As with every other investigation, this probe from the Dutch could shed light on certain aspect of operations which could have a domino effect.

While TikTok was thrust on the world to much consumer enthusiasm last year, the momentum has certainly continued through 2020 and has perhaps been compounded by lockdown protocols currently in place around the world.

Most downloaded Apps (non-gaming) during April 2020 – Global
Overall App Store Google Play
1. Zoom Zoom Zoom
2. TikTok TikTok TikTok
3. Facebook Google Meet Facebook
4. WhatsApp Microsoft Teams WhatsApp
5. Instagram Netflix Aarogya Setu

Source: Sensor Tower

With more entertainment needed by those taking part in enforced lockdown, there has been a surge in interest in numerous categories, but social media and content streaming applications are close to the top of the list. TikTok has benefitted from these tendencies, but also endorsements from numerous celebrities around the world.

Over the weekend, Anthony Hopkins challenged Sylvester Stallone and Arnold Schwarzenegger to a dance-off on the platform with Drake’s Toosie Slide.

@anthonyhopkins##Drake I’m late to the party… but better late than never. @oficialstallone @arnoldschnitzel ##toosieslidechallenge♬ original sound – officialanthonyhopkins

With more and more celebrities embracing the platform, everyday consumers will be encouraged, especially during a period of boredom. This might be seen as a worrying trend to US politicians who are attempting to dilute the influence China and its companies have on global societies and economies.

Last October, Republican Senator Tom Cotton and Senate Minority Leader Chuck Schumer wrote to the Acting Director of National Intelligence, Joseph Maguire, to formally request an investigation into TikTok, questioning whether it is a threat to national security as the applications developer ByteDance could be coerced to collaborate with the Chinese Government.

A few days later, Senator Josh Hawley also introduced a new bill, known as the National Security and Personal Data Protection Act (S.2889), which would force foreign technology companies to store data locally.

This would provide some protections to US consumers but would also open up the political class to a barrage of complications as the US has been attempting to punish countries who enforce data localisation rules on US companies. India is one of these nations at loggerheads with the US, and while many would attempt to avoid such complications, hypocrisy and irony seem to be completely lost on the current political administration.

TikTok has escaped much scrutiny over the last few months, though this is perhaps due to other areas demanding more attention. The application might be enjoying success for the moment, but we suspect it is not clear of privacy investigations just yet.

2019 app economy: TikTok ran riot as Disney got off to a flier

The older characters in the room might not get the appeal of small(est) screen entertainment, but the app economy is real and generating some serious revenues today.

Although gaming is the most obvious segment of the app economy to act as the poster boy, apps are now spanning the breadth and depths of our daily lives. From healthcare to banking and messaging to shopping, if you can think of it, there is probably an app for it.

With 2019 now firmly in the rear-view mirror, Sensor Tower has completed its analysis of the final quarter and the biggest stories over the course of the 12 months. And starting with the top-line figures, the app economy is booming.

Across the 12 months, Sensor Tower estimates there were a total of 114.9 billion app downloads, a 9.1% year-on-year increase, with Apple’s App Store collecting 30.6 billion at 2.7% growth and the Google Play Store at 84.3 billion with growth rate of 11.7%.

Looking at the breakdown of where users are most interested, three areas dominate as most would have expected. Social media, in which we are going to include the messaging applications, video and gaming.

WhatsApp once again claims the title of most downloaded application throughout the year, though TikTok has completed a whirlwind year by claiming second place. While it is undoubtedly a popular application, there has been plenty of negative press to dissuade people from downloading.

In October, Republican Senator Tom Cotton and Senate Minority Leader Chuck Schumer requested a national security investigation into the app, while the US Army and Navy both banned the use of the device on government-owned devices. To make matters worse, TikTok then had to announce it had fixed a vulnerability which allowed hackers to manipulate user data and reveal personal information.

While all of these incidents tarnish the reputation of the app, it wasn’t enough to stop users downloading. Even for the final quarter, the period where TikTok’s credibility came under the spotlight, it was the second-most downloaded application on the App Store and the third most popular on the Google Play Store.

Another remarkable statistic is India accounted for 45% of the total downloads, while Brazil was the second largest market for TikTok. Revenues for the app are already on the increase, there was a 700% sequential increase for the final quarter, but the remarkable popularity in two of the worlds most attractive developing markets will make this app a very interesting proposition for marketers moving forward.

Looking at the gaming section, Call of Duty publisher Activision demonstrated it is possible to successful take a game from traditional gaming consoles onto mobile. The game led downloads during the final quarter worldwide with 30 million downloads in the US and almost 50 million in Europe.

Gaming will always be the poster boy of the app economy, perhaps because it is the most obvious way revenues are generated through apps. What will be interesting to see over the next couple of months is how many of the traditional gaming titles, those which were designed for gaming consoles, are buoyed by the success of Call of Duty and attempt to crossover.

The final area worth noting from the report is the continued success of video content on mobile, most notably, Disney+.

While there are still questions about the depth of the content library, it cannot compete with the Netflix breadth and depth, the Disney brand and the current assets have produced excellent results after the launch in the fourth quarter. The Disney brand is one of the strongest worldwide therefore there was always going to be good uptake, though it needs to capitalise on this momentum, investing heavily in diversified content, if it is to be a genuine threat to Netflix.

Looking at the downloads, it was the most popular app to be downloaded in the US with 30 million, taking in more than $50 million in revenue in the first 30 days. In Q4, Disney+ accounted for 34% of video content downloads, with Netflix and YouTube tied for second on 11%.

This success was also translated into the revenue share. Sensor Tower estimates Disney claimed 16% of the total revenues across the quarter, just leading Netflix which claimed a 15% share. What should be noted however, Netflix has shifted payment from the app stores and onto online channels.

However, one swallow does not a summer make. We suspect numerous subscribers were downloading the app out of curiosity, therefore a much more telling picture of Disney will be in 12 months’ time. Unless the current content assets are supported by new, and varied, titles, we suspect churn might be considerable. Netflix is still content king for the moment, but Disney could not have gotten off to a better start in its challenge.

US Senators suspect TikTok could be a national security threat

Republican Senator Tom Cotton and Senate Minority Leader Chuck Schumer have written to the Intelligence Community to request a national security investigation into social media video app TikTok.

Although TikTok has been paid particular attention in the request, the duo is asking other China-based applications with a significant US presence are also given some consideration. The move could represent an expansion of the aggression towards China and strain trade-talks between the two parties further.

“We write to express our concerns about TikTok, a short-form video application, and the national security risks posed by its growing use in the United States,” the pair said in the letter to Acting Director of National Intelligence Joseph Maguire.

“TikTok’s terms of service and privacy policies describe how it collects data from its users and their devices, including user content and communications, IP address, location-related data, device identifiers, cookies, metadata, and other sensitive personal information. While the company has stated that TikTok does not operate in China and stores US user data in the US, ByteDance is still required to adhere to the laws of China.”

The comments above pay homage to a Chinese law which requires Chinese companies to comply with requests from the Government and its intelligence agencies. While the law also states Chinese companies can refuse the request if it contradicts with the domestic laws in which the company operates, it is clear the US and others do not believe this clause holds much credibility or weight.

After being launched in 2017 by ByteDance, TikTok has proven to be a very successful additional to the social media scene. The app boasts more than 110 million downloads in the US alone and became the world’s most downloaded app on Apple’s App Store in the first half of 2018.

While this is the first-time politicians have waded into the waters, there has been criticism of TikTok from other avenues. US think tank Peterson Institute for International Economics described TikTok as a ‘Huawei-sized problem’, posing a national security threat to ‘the West’. The thinking here seems to be that the app collects location and biometric data and is unable to deny requests from the Chinese Government.

TikTok has proven to be an immense success in its short life, though the attention from security agencies in the US is an ominous sign. Alongside the shadow of doubt which will be cast on the app in the eyes of US citizens, it is not unfeasible for some sort of restrictions to be placed on the business.

Teen-focused social app TikTok bans political advertising

TikTok, a video selfie app popular with teenagers, has sensibly decided political advertising doesn’t fit in with its vibe.

For those unfamiliar with it, TikTok is the latest big thing in social media for kids, teens and, presumably, anyone reluctant to move on from that phase. It enables people to make and publish short video clips of themselves on their phones and even splice in other media. It comes over as the best app yet to facilitate the kind of narcissism enabled by the social media connected camera phone.

TikTok’s most popular users seem to be teens doing musical performances or just generally talking to the camera, so it seems to reside somewhere in between Instagram and YouTube. But just as importantly it’s relatively new and unsullied by grownups, so it could well be increasingly supplanting its competitors in the teen market.

Conscious of its user demographic, TikTok is sensibly careful about its commercial deals. The PR consequences of serving ‘inappropriate’ content to kids would be severe and not worth the revenue. The latest such decision has been made regarding political advertising, which everyone knows is often the most bad-faith, dishonest, unpleasant propaganda and totally incongruous in an environment fills with kids just trying to have a bit of attention-seeking fun.

“…our primary focus is on creating an entertaining, genuine experience for our community,” said Blake Chandlee, VP of Global Business Solutions at TikTok, in a recent blog post. “While we explore ways to provide value to brands, we’re intent on always staying true to why users uniquely love the TikTok platform itself: for the app’s light-hearted and irreverent feeling that makes it such a fun place to spend time.

“In that spirit, we have chosen not to allow political ads on TikTok. Any paid ads that come into the community need to fit the standards for our platform, and the nature of paid political ads is not something we believe fits the TikTok platform experience. To that end, we will not allow paid ads that promote or oppose a candidate, current leader, political party or group, or issue at the federal, state, or local level – including election-related ads, advocacy ads, or issue ads.

It’s hard to argue with TikTok’s rationale here and we wouldn’t be surprised if some of its competitors rue not making such a decision too. The likes of Facebook presumably make loads of money from political advertising, but it comes with all sorts of baggage and scandal. There’s presumably plenty of money to be made from the ten-specific ad industry and TikTok would be wise to stick to that.