China denies forcing firms to share user data

The Chinese government “has never and will never” require companies or individuals to collect or transfer data in ways that violate the law, China’s foreign ministry declared on Friday. The statement was issued in response to a privacy complaint filed by Austrian advocacy group Noyb, which accuses six Chinese companies, including TikTok, Shein, and Xiaomi, of unlawfully sending European Union user data to China.

Noyb, an organisation focused on data protection and privacy rights, alleges that the companies breached the EU’s General Data Protection Regulation (GDPR) by transferring user data without proper safeguards. The complaint has sparked concerns in Europe about how personal information is handled by Chinese firms operating within the EU. If proven, the violations could result in significant fines and further scrutiny of these companies.

In defending the nation’s stance, a foreign ministry spokesperson emphasised that China operates within the bounds of international laws and rejects any claims of illegal data practices. “China strictly upholds its legal and regulatory framework and will never engage in or endorse actions that violate laws regarding data collection or transfer,” the spokesperson said. The spokesperson also criticised what they described as “unfounded accusations” aimed at tarnishing Chinese businesses.

This case is the latest in a series of global concerns about data privacy and the practices of technology firms. It underscores the growing tension between nations over data security, cross-border data flows, and regulatory compliance, particularly as Chinese companies expand their presence in foreign markets. The outcome of Noyb’s complaint could have far-reaching implications for data governance and corporate practices in both Europe and China.

DW Newsletter # 195 – Will TikTok get banned or divested in the USA?

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Dear readers,

TikTok is facing a pivotal moment in its turbulent journey this January. With the US Supreme Court leaning toward upholding a law requiring its owner ByteDance to sell TikTok’s US assets by 19 January 2025, the app stands on the brink of a nationwide ban. ByteDance, backed by the Chinese government, has fiercely resisted divestment, citing constitutional protections under the First Amendment. Adding to the complexity is Beijing’s ‘golden share’ in ByteDance; this control, paired with export regulations on software algorithms like TikTok’s recommendation engine, underscores China’s role in the negotiations and complicates the app’s future.

Amid these disputes, reports of Elon Musk, owner of X (formerly Twitter), have emerged as a potential buyer for TikTok’s US operations. Musk’s ties to US and Chinese markets via Tesla’s Shanghai production hub position him as a unique figure in this debate. If Musk were to acquire TikTok, it could bolster X’s advertising reach and data capabilities, aligning with his broader ambitions in AI and technology. However, such a sale would involve overcoming numerous hurdles, including ByteDance’s valuation of TikTok at US$40–50 billion and securing regulatory approvals from both Washington and Beijing. On the other hand, ByteDance, backed by Beijing, is resisting the sale, arguing that the conditioning violates free speech and poses significant logistical hurdles.

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TikTok has attempted to safeguard its US user base of 170 million by planning to allow users to download their data in case the ban takes effect. It has also reassured its 7,000 US employees that their jobs and benefits are secure, even if operations are halted. While new downloads would be prohibited under the ban, existing users could retain access temporarily, although the platform’s functionality would degrade over time.

The looming deadline has sparked a surge in alternative platforms, such as RedNote (known in China as Xiaohongshu), which has seen a significant influx of US users in anticipation of TikTok’s potential exit. These developments underscore the broader implications of TikTok’s struggles, including the reshaping of the social media landscape and the role of government intervention in regulating digital platforms.

What’s next?

The fate of TikTok in the US hangs in the balance as President-elect Donald Trump considers an executive order to delay the enforcement of the ‘ban or divest’ law by up to 90 days. The potential extension, supported by figures from both political sides, including Senate Majority Leader Chuck Schumer and Trump’s incoming national security adviser Mike Waltz, aims to provide ByteDance, TikTok’s Chinese owner, additional time to divest its US operations and avoid a nationwide ban. With over 170 million American users and substantial ad revenue at risk, lawmakers are increasingly wary of the disruption a ban could cause, signalling bipartisan support to keep the app operational while addressing national security concerns. TikTok CEO Shou Zi Chew’s attendance at Trump’s inauguration further hints at a shift in relations between the platform and the new administration. Meanwhile, the uncertainty has already driven US users to explore alternatives like RedNote as the clock ticks down to the Sunday deadline.

Thus, TikTok’s journey has become a defining chapter in the intersection of technology, politics, and global economics, serving as a case study for the challenges of navigating success in a hyper-connected world fraught with geopolitical tensions.

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Visit dig.watch now for the latest updates and other topics!

Marko and the Digital Watch team


Highlights from the week of 10-17 January 2025

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The EU is considering expanding its investigation into Elon Musk’s X over potential content rule violations.

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According to a Bloomberg report, one potential scenario would see Musk’s platform, X, taking over TikTok’s US operations and running them jointly.

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Digital Markets Act probes under review.

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Analysts suggest the surge in American RedNote users may be temporary, as past trends show similar platforms have faced restrictions.

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An investigation into subsidies, alleging market disruption and unfair competition.

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A bipartisan attempt for extension grows stronger.

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The upcoming shutdown could shake up $11 billion ad market.

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Google has been hit with a substantial fine for failing to comply with previous penalties. The move signals escalating tension between Russia and foreign tech platforms, especially over content hosted…

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Child safety regulations are coming soon despite the debate surrounding them.

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Several German institutions have already left X, citing concerns over its algorithms and Musk’s political stance.

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The regulation’s success will depend on consistent enforcement across the EU and balancing oversight with growth, amidst a global trend towards more comprehensive crypto regulation.


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Bytedance, TikTok’s parent company, will divest its US operations by 19 January 2025 or face a ban in the country.

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Can disaster diplomacy, sparked by events like the Los Angeles wildfires, form lasting bonds between nations? Explore the complexities, challenges, and potential of international cooperation in the face of climate-related crises.

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The rights of future generations are crucial, but how do we balance theory with practical action? Aldo Matteucci explores sustainable development, intergenerational justice, and real-world solutions.

Upcoming

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The World Economic Forum (WEF) Annual Meeting 2025, held in Davos, will convene global leaders to address some of the most pressing global and regional challenges. Under the theme ‘Collaboration…

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On 21 January from 16:00 to 18:00 pm CET the Geneva Dialogue on Responsible Behaviour in Cyberspace will host the session at the Geneva Day at the House of Switzerland in Davos.…

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Implementing AI in daily work: Training for the EU staff in Geneva Diplo will deliver specialised, exercise-based training, ‘Implementing AI in Daily Work’,

Chinese tech company Zhipu questions US trade ban

Beijing-based AI company Zhipu Huazhang Technology has opposed the US government’s plan to add it to the export control entity list. The company argues the decision lacks a factual basis.

Zhipu issued a statement on its official WeChat account expressing strong opposition to the move. The firm criticised the US commerce department’s intentions, insisting the decision was unjustified.

Zhipu and its subsidiaries face restrictions on accessing US technologies if added to the list. The company maintains it operates lawfully and transparently in its business practices.

The US has been increasing scrutiny on Chinese technology firms, citing national security concerns. Zhipu emphasised its commitment to responsible technology development and cooperation with global partners.

Baicells faces US investigation amid national security fears

US authorities, including the Commerce Department and the FBI, are investigating Baicells Technologies, a telecom hardware company with ties to China, over potential security risks. Founded by former Huawei executives, Baicells has supplied telecom equipment to 700 networks across the US since opening its North American branch in 2015. The investigations focus on national security concerns, particularly around the company’s Chinese origins and its equipment’s potential vulnerability to espionage. The FBI’s interest in Baicells goes back to 2019, and recent reports suggest that the Pentagon has added the company to a list of entities connected to China’s military.

While Baicells has denied any wrongdoing and pledged full cooperation with US authorities, the company faces mounting scrutiny amid fears that Chinese-made telecom equipment could be used for surveillance or cyber attacks. In particular, base stations and routers provided by Baicells have been flagged for vulnerabilities that could allow hackers to compromise sensitive networks. The FBI has already contacted local US entities, such as the city of Las Vegas, to raise security concerns regarding Baicells’ technology.

Despite Baicells’ claims that it no longer has ties to its Chinese parent company, its history and ownership structure continue to raise doubts. Many of its top executives and a significant portion of its staff have links to Huawei, further fueling suspicions about the company’s operations. In recent years, Baicells has attempted to distance itself from its Chinese roots, stating that its infrastructure is increasingly built in Taiwan, though much of its equipment still originates from China. The ongoing investigations highlight the broader concerns in Washington about the risks posed by Chinese-linked technology in critical infrastructure.

US TikTok ‘refugees’ find a new platform on RedNote

Users of the Chinese social media platform RedNote have welcomed an influx of American TikTok users, posting messages and selfies to greet the newcomers. The surge of over 700,000 users follows a looming US ban on TikTok, which has 170 million American users. Chinese foreign ministry officials have expressed support for greater cultural exchanges, while state media described RedNote as a “new home” for TikTok users.

The app, known as Xiaohongshu in China, has traditionally been used for lifestyle content but has now become an unexpected platform for US-China interactions. Many American users have asked about Chinese food, culture, and daily life, while Chinese users have eagerly responded. Some, however, have voiced concerns, with nationalist bloggers warning against Western influence.

Despite the warm reception from many, tensions have emerged over content and platform moderation. Some US users have tested RedNote’s censorship policies by posting about politically sensitive topics. Analysts believe the trend may be short-lived, as past instances of Western social media adoption in China, such as Clubhouse, ended with government restrictions. RedNote is reportedly working to improve its moderation of English-language content.

Trump may delay TikTok ban enforcement with executive order

President-elect Donald Trump is reportedly considering an executive order that would postpone the enforcement of the TikTok sale-or-ban law for up to 90 days. According to sources cited by the Washington Post, the order would temporarily halt the requirement for TikTok’s Chinese owner, ByteDance, to divest its US operations or face a ban.

The delay could provide more time for negotiations and potential deals to resolve security concerns raised by United States lawmakers. The law, passed under the Biden administration, aimed to address fears over TikTok’s links to China, but Trump has taken a more open stance towards the platform during his campaign.

A suspension of enforcement would offer relief to TikTok’s 170 million American users and businesses that rely on the app for advertising and engagement. The move, however, is likely to spark debate in Washington, where concerns over data security and Chinese influence remain key political issues.

TikTok users react to looming US Shutdown

Disappointment and confusion swept across TikTok users in the United States as news broke that ByteDance, the app’s Chinese owner, plans to shut down the platform for its 170 million US users by Sunday. The move comes in response to a federal ban requiring ByteDance to sell TikTok’s US assets by January 19 due to national security concerns. While some users hold out hope for a last-minute reprieve, many are preparing for the worst.

Content creators, many of whom have built careers and followings on TikTok, expressed frustration and sadness. Some vowed to boycott rival platforms like Instagram, Facebook, and X, while others scrambled to save their content. True crime creator Amber Goode, from Colorado, criticised the government for “playing with us,” while other users shared instructions on migrating to alternative platforms, including China-based apps like RedNote.

TikTok has maintained that it does not and would never share US user data with China, arguing that the ban violates First Amendment rights. Unless the Supreme Court intervenes, users attempting to open the app on Sunday will be redirected to a shutdown information page. President-elect Donald Trump is reportedly exploring executive actions to delay the ban, but the outcome remains uncertain.

The shutdown has sparked mixed emotions globally, with some international users relieved that American social media issues may no longer dominate their feeds. However, for US creators like Ishpal Sidhu, who stands to lose her livelihood, the uncertainty has cast a shadow over what was once a thriving platform.

China launches inquiry into US chip funding

China’s Commerce Ministry announced plans to investigate US government subsidies to its semiconductor sector following requests from China’s mature node chip industry. The ministry stated on Thursday that these subsidies, introduced under the Biden administration, allegedly provide American companies with an unfair competitive advantage in the global market.

According to the Chinese government, US firms have exported mature node chip products to China at reduced prices, causing harm to the interests of China’s domestic semiconductor industry. Beijing views these practices as a threat to its industry’s rights and competitive balance.

The investigation reflects rising tensions between the two nations over technology and trade, particularly as both seek to bolster their semiconductor sectors amid growing geopolitical competition.

Noyb challenges Chinese data practices in Europe

Austrian advocacy group Noyb has filed privacy complaints against six Chinese companies, including TikTok, Shein, and Xiaomi, alleging illegal transfers of European user data to China. The group, known for targeting US tech giants like Apple and Meta, said this is its first case against Chinese firms. Complaints have been filed in four EU countries, seeking fines of up to 4% of each company’s global revenue.

Noyb claims that companies such as Alibaba’s AliExpress and Tencent’s WeChat transfer EU citizens’ data either directly to China or undisclosed ‘third countries,’ which are likely China. Under EU data protection laws, such transfers are prohibited if the destination country fails to meet the bloc’s strict privacy standards. A Noyb lawyer emphasised that China’s status as a ‘surveillance state’ makes such transfers clearly unlawful.

The allegations add to mounting regulatory challenges for Chinese tech firms. TikTok, already under scrutiny in Europe for election interference concerns, faces a potential US ban starting Sunday over national security fears. Regulators in multiple regions continue to ramp up pressure on Chinese companies amid growing global concerns over data privacy and security.

TikTok prepares for possible US shutdown

TikTok is preparing to shut down its US operations on Sunday unless a federal ban is averted at the last minute, according to sources. The ban, stemming from a law signed last April, requires TikTok’s Chinese parent company, ByteDance, to sell its US assets by January 19 or face nationwide restrictions. The Supreme Court is currently deliberating on whether to uphold or pause the ban, but no ruling has been made yet.

President-elect Donald Trump, set to take office the day after the ban would take effect, is reportedly considering a temporary suspension of the shutdown. However, legal uncertainty clouds the possibility of such action. Meanwhile, the Biden administration, in its final days, has signalled it will not block the ban without a credible divestment plan from ByteDance. TikTok has argued that the law violates First Amendment rights and warned that a prolonged ban could lead to significant user loss and global disruptions to its services.

If the ban proceeds, TikTok plans to display a pop-up message informing users of the shutdown and allow them to download their data. The app would become largely inoperable as US companies would no longer be permitted to provide critical services for its maintenance. TikTok has emphasised its ability to restore operations quickly if the ban is reversed but warned that the shutdown would impact not just American users but its global platform due to its reliance on US-based infrastructure.

The political and legal standoff has sparked widespread public and corporate reactions. Social media users have expressed disappointment at the impending ban, while TikTok’s US operations, employing over 7,000 workers, hang in the balance. Despite ongoing efforts to delay the enforcement, the platform faces an uncertain future as Sunday’s deadline looms.