Why TikTok’s security risks keep raising fears
Security cameras are seen at the TikTok Inc. building in Culver City, Calif., Friday, March 17, 2023. The battle between the U.S. and China over TikTok comes to a head on Thursday when the social media platform’s CEO testifies before Congressional lawmakers. (AP Photo/Damian Dovarganes, File)
By Kelvin Chan And Haleluya Hadero
The battle between the U.S. and China over TikTok comes into full view on Thursday when the social media platform’s CEO testifies before Congressional lawmakers.
Shou Zi Chew’s hearing is happening at what he’s called a “pivotal moment” for the hugely popular short video sharing app. TikTok is owned by parent company ByteDance, which has offices in Beijing. The platform has 150 million American users but it’s been dogged by persistent claims that it threatens national security and user privacy, or could be used to promote pro-Beijing propaganda and misinformation.
Chew will attempt to persuade lawmakers not to pursue a ban on the app or force its sale to new owners.
So are the data security risks real? And should users be worried that the TikTok app will be wiped off their phones?
Here’s what to know:
WHAT ARE THE CONCERNS ABOUT TIKTOK?
Both the FBI and officials at the Federal Communications Commission have warned that ByteDance could share TikTok user data — such as browsing history, location and biometric identifiers — with China’s authoritarian government.
Officials fear that TikTok, which like many other social media platforms collects vast amounts of data on its users, would be forced to give it to Beijing under a 2017 law that compels companies to turn over any personal data relevant to China’s national security.
Concerns around TikTok were heightened in December when ByteDance said it fired four employees who accessed data on journalists from Buzzfeed News and The Financial Times while attempting to track down the source of a leaked report about the company.
HOW IS THE U.S. RESPONDING?
The Committee on Foreign Investment in the U.S. — known as CFIUS and part of the Treasury Department — is carrying out a review, and has reportedly threatened a U.S. ban on the app unless its Chinese owners divest their stake. China’s Foreign Ministry in turn accused the United States itself of spreading disinformation about TikTok’s potential security risks.
White House officials have said there are “legitimate national security concerns with respect to data integrity.”
Some U.S. senators urged CFIUS last year to quickly wrap up its investigation and “impose strict structural restrictions” between TikTok’s American operations and ByteDance, including potentially separating the companies.
At the same time, lawmakers have introduced measures that would expand the Biden administration’s authority to enact a national ban on TikTok. The White House has already backed a Senate proposal that has bipartisan support.
HOW HAS TIKTOK ALREADY BEEN RESTRICTED?
Authorities in North America, Europe and Asia-Pacific have banned the TikTok app, mostly on government-issued phones or devices used for official business, citing cybersecurity concerns. Last week Britain imposed a government phone ban while New Zealand restricted lawmakers and other workers in its Parliament from having it on their phones.
The European Union’s three main institutions, the executive Commission, Parliament and Council, have ordered staffers to remove it from their work phones. So has Denmark’s defense ministry. The Canadian government said its ban includes blocking civil servants from downloading the app in the future. Norway and Netherlands warned this week against installing TikTok on government devices.
The White House ordered U.S. federal agencies to delete TikTok from all government-issued mobile devices. Congress, the U.S. armed forces and more than half of U.S. states had already banned the app.
WHAT DOES TIKTOK SAY?
In a TikTok video this week, Chew appealed against a ban, saying it could take the app away from 150 million American users.
In his testimony, he plans to outline how the company’s data protection and security efforts go “above and beyond” anything that its social media and online entertainment rivals do.
Under a $1.5 billion project dubbed Project Texas that’s underway, data from U.S. users is being routed through servers controlled by Oracle, the Silicon Valley company it partnered with in an effort to avoid a nationwide ban.
Older U.S. user data stored on non-Oracle servers will be deleted this year. Under this arrangement, there’s no way for Beijing to access the data, Chew said in prepared remarks released ahead of the hearing.
TikTok has also sought to portray ByteDance as a global company, not a Chinese one. Executives have been pointing out that ByteDance’s ownership consists of 60% big global investors, 20% employees and 20% Chinese entrepreneurs who founded the company. TikTok itself is headquartered in Singapore.
ARE THE SECURITY RISKS LEGITIMATE?
It depends on who you ask.
Some tech privacy advocates say while the potential abuse of privacy by the Chinese government is concerning, other tech companies have data-harvesting business practices that also exploit user information.
“If policy makers want to protect Americans from surveillance, they should advocate for a basic privacy law that bans all companies from collecting so much sensitive data about us in the first place, rather than engaging in what amounts to xenophobic showboating that does exactly nothing to protect anyone,” said Evan Greer, director of the nonprofit advocacy group Fight for the Future.
Karim Farhat, a researcher with the Internet Governance Project at Georgia Tech, said a TikTok sale would be “completely irrelevant to any of the alleged ‘national security’ threats” and go against “every free market principle and norm” of the state department’s internet freedom principles.
Others say there is legitimate reason for concern.
People who use TikTok might think they’re not doing anything that would be of interest to a foreign government, but that’s not always the case, said Anton Dahbura, executive director of the Johns Hopkins University Information Security Institute. Important information about the United States is not strictly limited to nuclear power plants or military facilities; it extends to other sectors, such as food processing, the finance industry and universities, Dahbura said.
IS THERE PRECEDENCE FOR BANNING TECH COMPANIES?
The U.S. has banned the communications equipment sold by Chinese companies Huawei and ZTE, citing national security risks. But banning the sale of items is easier than banning a free app.
Such a move might also wind up in courts on grounds that it could violate the First Amendment, as some civil liberties groups have argued.
Another possibility, albeit remote, is forcing a sale. That’s what happened in 2020 when Beijing Kunlun, a Chinese mobile video game company, agreed to sell gay dating app Grindr after an order from CFIUS.
Beijing Kunlun said it signed a “national security agreement” with CFIUS to sell Grindr to San Vicente Acquisition for $608.5 million, promising not to send sensitive user data to China, cease its operations there and maintain its headquarters in the U.S.
BMO completes US$160M deal to purchase Air Miles loyalty rewards program
Air Miles and BMO cards are displayed in Mississauga, Ont., on Friday, March 10, 2023. BMO Financial Group closed its acquisition of the Air Miles loyalty rewards program in Canada on Thursday, saying it plans to expand the program with new ways to earn and redeem points. THE CANADIAN PRESS/Nathan Denette
BMO Financial Group closed its acquisition of the Air Miles loyalty rewards program in Canada on Thursday, saying it plans to expand the program with new ways to earn and redeem points.
“Going forward, BMO ownership gives the program stability, but more importantly, the opportunity for us to invest in the program,” said Air Miles president Shawn Stewart.
BMO announced in March it would purchase Air Miles after the program’s U.S. parent company filed for bankruptcy. The bank’s so-called stalking horse offer for LoyaltyOne Co. was US$160 million, subject to certain adjustments, according to court documents.
With the bank’s ownership, Stewart says he’s excited for the program’s new chapter.
“We wanted to come out of the gate strong and reinvigorate what is a Canadian leading loyalty program. And what you’ll see over the summer is a continued release of of new products, and new opportunities for collectors to earn.”
Air Miles is one of the oldest and largest loyalty programs in Canada, with nearly 10 million active users, but the program has lagged in recent years as numerous companies dropped out of the program.
Last summer, Sobeys and Safeway owner Empire Co. Ltd. and office supply retailer Staples said they would be scrapping the program, a year after the Liquor Control Board of Ontario and Lowe’s Canada pulled out.
BMO said it plans to introduce enhancements to the program including an improved travel booking platform and a new way for collectors to earn Bonus Miles through receipt scanning. The latter will be available first for collectors in Atlantic Canada, followed by those in other regions.
Stewart said the main complaint coming from program partners was a lack of investment in the Air Miles program, an issue the acquisition is expected to address.
“When partners see our investment, our hope and our plan is that they’ll see the growth in the program, the opportunity for them to speak to 10 million Canadians, to understand and use the data and analytics the program provides,” he said.
The Air Miles program is re-introducing itself to Canadians in a market that’s seen more stores launching loyalty programs in recent years, but Stewart said that Air Miles stands out as a longtime brand with a broad catalogue for points redemption.
This report by The Canadian Press was first published June 1, 2023.
Total Canadian debt hit new record in first quarter: TransUnion
Canadians’ combined outstanding debt hit a new record in the first quarter, reaching $2.32 trillion, TransUnion said Wednesday.
As the cost of living rose with high inflation and interest rate hikes, many Canadians turned to credit to alleviate financial pressures, the credit reporting agency said in its latest industry insights report.
The number of Canadians with access to credit grew 2.9 per cent year over year, led by subprime consumers, which grew by 8.3 per cent, TransUnion said.
However, the agency said consumers considered prime or higher still make up almost three-quarters of total consumers with a balance, characterizing that as a “relatively healthy risk distribution.”
Credit card originations were up 20 per cent amid heavy competition in the market, while the average line of credit monthly payment increased by 43 per cent to $436.
Mortgage origination dropped 32 per cent year over year as higher interest rates slowed demand for new mortgages, especially in the refinance market.
Meanwhile, serious consumer delinquency increased, though TransUnion noted that overall delinquency levels remain below pre-pandemic levels.
“The financial position of Canadian credit consumers improved coming out of the pandemic, bolstered by higher savings accumulated through the pandemic and supported by a strong labour market,” said TransUnion director of research and industry insights Matthew Fabian in the report.
“However, the longer the current conditions of elevated inflation and higher interest rates persist, the more likely it is that a segment of more vulnerable consumers may increasingly feel the pinch,” he said.
“As available disposable incomes become more stretched, we expect a segment of consumers will be more likely to miss payments, and as a result, that delinquency rates will rise.”
Average consumer balances on most credit products rose, with the average credit card balance up 11.4 per cent to $3,909, and the average mortgage balance up 7.1 per cent to $349,178.
TransUnion expects credit trends for 2023 to be mixed due to the uneven impact of higher inflation and interest rates.
This report by The Canadian Press was first published May 31, 2023.
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