Is the clock ticking down for Tik Tok?

Australia is unlikely to match controversial moves in America over the compulsory acquisition of Chinese-owned social media app Tik Tok.

Brisbane cyber lawyer Sandy Zhang says amid claims the video sharing app may be a data gathering tool of the Chinese Communist Party (CCP), Australia is unlikely to follow an American move to compulsorily force Tik Tok to sell its business to an American company, or face a ban if it refuses.

But a demand by US President Donald Trump that the US government would expect a substantial slice of the price for such a sale has evoked alarm in many quarters over so-called Mafia tactics.

Mr Zhang, a Senior Associate with Brisbane Intellectual Property and Privacy law firm EAGLEGATE Lawyers, which handles matters of Commercial, Patent law, Copyright law, Trade Marks, Domain names and general Cyber law says there is no precedent for this sort of action.

While Australia often follows American trends, it’s most unlikely we would pull a Godfather-like financial demand on Tik Tok’s Australian arm.

“The power for the government to ban an app on national security grounds clearly exists. The power to then suspend that ban pending a sale to a domestic company, which would alleviate the national security concerns, also clearly exists.

“But if President Trump then talks about potentially jeopardising the deal if the US government doesn’t get a cut of the sale price, things start to get murky, and such an act is at least undeniably questionable,” he says.

Media reports have played on fears that Tik Tok, owned by a Chinese company, is being used by the Chinese Communist Party to track users and it’s heightened fears amid a stand off between Australia and China and a deteriorating relationship between the countries.

Tik Tok is used by 1.6 million Australians including Victorian Premier Daniel Andrews.

Mr Zhang says he doubts Tik Tok is a worse offender (in terms of tracking personal information of users) than any other typical social media platform like Facebook or Snapchat, or even search platforms like Google.

Amid talk that Microsoft might buy Tik Tok, something that would ease Australian concerns, there is still deep concern for President Trump’s demand that the US Government get a ‘substantial portion’ of any sales price for the US arm of Tik Tok, with a threat to ban the app in September if no sale is made.

“That act might be unconstitutional. The US debate is focused on the 5^th amendment, which prevents the Federal government from taking private property for public use without just compensation.

“A similar provision exists in the Australian Constitution. There are some difficulties with this argument though. Technically speaking, Microsoft, and not the US government, is looking at acquiring Tik Tok. The US government just wants a cut of the price as the apparent “middleman” that made the deal possible (even though making the deal possible essentially meant coercion at the regulatory level).

“The Constitutional argument will have to be that this amounts to taking private property in the sense that it is taking money that should have gone to Tik Tok, or forcing Microsoft to pay money that it should not have had to pay. I would say that the demand for a cut is probably more likely than not to constitute a breach of the Constitution, but there is enough argument there to allow political games to be played,” Mr Zhang says.

But what about Australia?

Mr Zhang says while the Australian Federal government is bound by a “just compensation” rule, no such restriction applies to State governments.

“Technically State governments have the power to forcefully acquire property without any compensation. However, it’s not in the interest of any democratic government to actually do this. In fact, most State governments have signed away this power of their own accord in relation to some contentious issues such as resumption of land, by enacting legislation that caters for just compensation.

“Ultimately I think Australia is unlikely to make demands like those made by Trump, even if it is legally possible. It’s certainly not a good look for a government. It would be probably a politically disastrous move, at least in the Australian environment,” he says.

The problem with Tik Tok being an undeclared resource of the Chinese Communist Party, he feels is that it’s become hard to separate fear from reality.

“For perspective, every Chinese company of a respectable size would have a department dedicated to relations with the government. They’ll also almost certainly have some senior staff members who are connected to the CCP, or are themselves a party member with mostly superficial party duties.

“It’s simply a necessary part of business in that political environment, and not an indication that Tik Tok is somehow directly working with or controlled by the CCP.

“The Chinese Communist Party is also unlikely to be monitoring personal information on a massive scale, even though they technically have the power to gain access to the data from Tik Tok.

“Gathering and storing data is one thing, continuously processing that data on a granular individual level is another thing altogether. I doubt even the CCP has enough resources to do that in any meaningful or useful way. Instead, the CCP would have a system that monitors the data for only specific things, like banned keywords, images or videos.

“Other than censorship, the data can also be used for things like trend analysis, but generally the CCP is not likely to be interested in what you bought on eBay last week,” he adds.

“That said, targeting specific persons of interest to be more closely monitored is quite easy and is almost certainly being done right now on apps like WeChat and Tik Tok,” he says.

Mr Zhang says in Victorian Premier Daniel Andrews’ case, information like his contacts, hobbies, interests, Tik Toks sent or viewed, direct messages etc could potentially be scrutinised by the CCP.

“This information could be used more subtly to attempt to influence him in political engagements, or used in a more nefarious manner through phishing schemes, hacking or even extortion.

In the case of military personnel, there could be further national security risks if their location data is used to track armed forces movement in Australia and overseas.

Members of the armed forces in Australia and the US have been told not to use the app on any Defence-issued device.  Mr Zhang feels banning the app nationwide might seem a bit extreme, but when relations are hostile, it may be justified.

“It would be difficult to enforce a partial ban that applies only to military and government personnel, and it often only takes one person to leak sensitive information,” he says.

Tik Tok denies that it sends any data to the CCP, but there is no doubt that it, like any Chinese social media app, is at least required by the CCP to censor certain content.

“The CCP may also require Tik Tok to monitor certain behaviour or certain individuals, without the CCP necessarily directly accessing the data. But ultimately, even if the CCP has yet to ask for access to data from Tik Tok (or other Chinese apps like WeChat), the problem is that it could legally do so under Chinese law, and that is a concern that is difficult to dismiss,” he says.