The United States House of Representatives has taken a decisive step against the popular social media app TikTok, owned by Chinese company ByteDance, by passing a crucial bill. This legislation compels ByteDance to divest its U.S. operations within six months or face a nationwide ban.

Legislative moves against TikTok amid 2024 election concerns

The bill’s passage signifies a crucial moment in the ongoing discourse over balancing national security with free expression and innovation rights. It spotlights the intricate motivations behind the proposed ban, the political dynamics involved, and the extensive implications for U.S. tech policy and the landscape of global digital governance.

Central to the initiative to ban TikTok is the escalating concern among U.S. lawmakers regarding the app’s potential exploitation by the Chinese government. According to Director of National Intelligence Avril Haines, U.S. officials have raised alarms about TikTok’s management being “beholden to the Chinese government,” emphasizing concerns.

The U.S. Department of Justice amplifies these concerns with warnings about the risks posed by ByteDance’s Beijing headquarters to American users’ privacy and data security, in the context of China’s notoriety for surveillance and censorship.

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Muhammad Zulhusni | 14 December, 2023

Reuters has highlighted that the bill’s passage is a clear display of significant bipartisan agreement in an otherwise divided political environment, securing an overwhelming majority with 352 votes for and 65 against. Sponsored by Mike Gallagher, the Republican head of the House’s select committee on China, and Democrat Representative Raja Krishnamoorthi, the legislation has garnered extensive support across party lines, though it has faced some opposition.

Implementing the ban: Challenges and implications

Arizona Senate candidate, Alexandria Ocasio-Cortez highlighted, “There are serious antitrust and privacy questions here, and any national security concerns should be laid out to the public prior to a vote.” This situation underscores the complex interplay of technology, privacy, and national security in legislative processes.

Implementing such a ban presents practical hurdles. Questions linger about whether China would permit the sale of TikTok’s U.S. assets or if such a divestiture could realistically be achieved within the designated timeframe.

Furthermore, the ban would impose restrictions on app stores and web hosting services, potentially transforming the manner—or indeed, the possibility—of TikTok’s access by U.S. users. This strategy echoes actions taken by nations like India and Nepal, which have cited national security reasons for banning TikTok, and mirrors measures by the U.S. and its allies to restrict the app on government-owned devices.

The potential prohibition of TikTok bears significant political weight, especially with the 2024 election on the horizon. TikTok has become a critical platform for engaging younger voters, which has traditionally leaned towards the Democratic Party. The active use of TikTok by the Biden campaign illustrates the app’s pivotal role in connecting with this demographic.

Nonetheless, as House Republicans point out, this proposed ban could signify ‘the most substantial threat to the app since the Trump administration,’ potentially stripping the Democrats of a vital engagement tool.

Senate’s deliberation on TikTok: The road ahead in 2024 and beyond

As this bill heads to the Senate, its future is uncertain. Senate Majority Leader Chuck Schumer has indicated that the Senate will deliberate on the legislation, albeit without a definitive schedule. Senator Maria Cantwell, chair of the Senate Commerce Committee, has voiced a preference for “legislation that can withstand judicial scrutiny,” suggesting a thorough and cautious evaluation of the bill’s implications. This sentiment mirrors a broader aspiration among senators to address threats from foreign apps in a comprehensive manner, avoiding piecemeal legislative efforts.

The TikTok debate encapsulates the broader challenges facing digital platform regulation in an era marked by intense global technology competition and digital sovereignty concerns. TikTok CEO Shou Zi Chew’s engagements on Capitol Hill, where he cautioned that the bill “could lead to TikTok’s ban in the United States,” underscore the high stakes for the company and its millions of American users. Senator Ron Wyden’s remark that “history teaches us that haste in tech legislation often leads to errors” emphasizes the importance of deliberate and informed policy-making.

TikTok CEO speaks on the ban in the U.S. (Source – X)

This legislative push against TikTok marks a pivotal point in the intersection of technology, politics, and national security. With bipartisan momentum to mitigate perceived threats from foreign-owned applications, the outcome of this endeavor will profoundly affect the future of digital communication, political mobilization, and international relations in the digital epoch. As the Senate contemplates its next steps, the broader discussion on balancing security concerns against the benefits of a globally interconnected digital ecosystem continues to evolve.

The looming decision on TikTok’s fate in the United States is a testament to the complex interplay between constitutional freedoms and cybersecurity imperatives. Senate Majority Leader Chuck Schumer’s cautious stance on advancing the bill, juxtaposed with President Biden’s readiness to sign it into law, highlights the nuanced deliberations that define the legislative process.

This scenario is reminiscent of previous attempts to regulate TikTok, including an executive order by former President Donald Trump that encountered legal obstacles. Public sentiment on TikTok remains divided, reflecting broader debates on privacy, security, and freedom of expression in the digital age.

In response to the legislative proceedings, TikTok has launched an extensive lobbying campaign, emphasizing the platform’s commitment to data security and its integral role in the lives of millions for personal and business purposes. This includes engaging its vast creator community, though this strategy has faced criticism. The potential hurdles for TikTok extend beyond legislative challenges, encompassing antitrust concerns and the complexities of divesting U.S. operations under the scrutiny of both U.S. and Chinese authorities.

The business community and investors are keenly observing these developments, considering ByteDance’s valuation and the broader implications for the digital market landscape. Should the bill become law, it would signify a pivotal shift in how social media platforms operate within the U.S., potentially redefining the digital space for American users and content creators alike.

The discourse surrounding TikTok’s proposed ban highlights the ongoing tensions between technological innovation and regulatory oversight and signals a potential shift in the digital competitive landscape. A ban could inadvertently benefit competitors like Meta’s Instagram Reels, illustrating the intricate dynamics in the global tech ecosystem. This scenario underlines the wide-ranging consequences of regulatory actions, shaping the future of digital interaction, political discourse, and international tech competition.

The global dimension of TikTok’s regulatory challenges

Beyond the United States, TikTok faces regulatory scrutiny worldwide, emphasizing the global dimension of its challenges.

Italy’s antitrust authority has imposed a fine of 10 million euros (US$10.94 million) on TikTok for not sufficiently monitoring content that could harm minors or vulnerable individuals. TikTok, a subsidiary of the Chinese corporation ByteDance, faces global regulatory scrutiny, alongside other social media platforms like Facebook and Instagram, to enhance protection for underage users.

The Italian watchdog criticized TikTok for not effectively preventing the distribution of dangerous content, such as videos promoting the ‘French scar’ challenge, and for failing to adhere to its safety assurances. Despite TikTok’s claim of limiting the visibility of such videos to users under 18, Italy’s AGCOM demanded their removal last month, criticizing TikTok for failing to effectively prevent the distribution of dangerous content and for not adhering to its own safety assurances.

In addition to Italy’s actions, TikTok is confronting challenges in the United States, where a proposed bill could ban the app unless ByteDance divests its U.S. operations within six months, reflecting ongoing national security concerns over Chinese technology.

Simultaneously, Canada is examining TikTok’s expansion proposal for national security implications, which might lead to mitigation requests or block the expansion. This scrutiny comes as Canada previously prohibited TikTok on government devices due to privacy and security risks, and its privacy commissioner is investigating the app’s data practices. Despite these challenges, TikTok has expressed its commitment to ensuring the safety and security of its platform for users in Canada.

Canada reviewing TikTok’s expansion plan (Source – Shutterstock)

As we move towards the 2024 election, the future of TikTok is becoming a hot topic amid legislative scrutiny and concerns over national security. With bipartisan worries about data privacy and security front and center, this legislation has kicked off a nuanced debate about the role of digital platforms in the U.S. As this conversation unfolds, it’s set to have significant implications for the digital competitive scene, political dialogue, and how Americans interact with social media as the election gets closer. It’s a complex issue that’s drawing a lot of attention, shaping up to be a key discussion point as we head into the next election cycle.

The post What’s happening with TikTok as 2024 progresses? Is a ban in the U.S. imminent? appeared first on Tech Wire Asia.

TIKTOK BREAKS RECORDS AS FIRST NON-GAME APP TO EXCEED US$10 BILLION – PLUS PLANS FOR 2024 UNVEILED

Muhammad Zulhusni | 14 December, 2023

TikTok continues to face all types of challenges from the Biden Administration. And every time, the social media giant responds to each challenge and allegation in a positive manner.

With over 150 million users in the US, TikTok continues to be as transparent as it can be in everything it does, despite facing significantly more rigorous investigation than the likes of Facebook or X. While the US government has accused the app of being used for espionage by China, TikTok continues to prove otherwise, highlighting and showcasing all the steps it has taken to ensure the security and privacy of those using its app – and their data.

Most recently, TikTok CEO Shou Zi Chew was grilled by US senators on his ties with China. The Singaporean CEO patiently answered every query, while stating that neither he nor the app shares any data or information with China.

Can we say “McCarthyism much?”

The reality is that while the app does collect data, it’s mostly to improve its algorithms. All social media apps collect data to improve their algorithms. This helps the app improve its performance and cater to users’ needs.

Despite proving that the app does not share data with China, several states in the US have banned the use and download of the app on government devices. Several universities in the US have also banned the use of the app on campus.

In 2022, US President Joe Biden signed legislation blocking most federal government devices from using TikTok. Lawmakers from both sides of the aisle continue to call for the app to be banned wholesale in the US over concerns the government in Beijing might be able to access user data.

Still, the site remains popular with young people in the US, a demographic that the White House is keen to energize for this November’s election. In fact, TikTok is not only capable of influencing the US election, it is also now the most popular source for news by the younger generation.

According to a report by Morning Consult, 47% of TikTok users say they get news from the app, compared to 30% in July 2022. Younger generations have become more accustomed to using this social network to follow the news – particularly in the wake of the “Muskification” of the platform everyone is still deadnaming as Twitter, and the return of extreme right wing accounts to that platform in the name of “free speech.”

US President Joe Biden is officially on TikTok. Election? What election?

Biden joins TikTok

On the surface then, it’s a bizarre twist that US President has now joined TikTok.

That’s right. Take a moment to absorb that information. For all the noise made over the last few years and the concerns they have had over the app, the US President is finally on TikTok.

So why the sudden change? As expected, with the election just months away, the US President is hoping to reach out to younger voters. These voters represent a huge demographic that still uses TikTok and relies heavily on the social media app for all its information.

According to a report by TIME, The account, @Bidenhq, will be run by Biden’s campaign staff alongside other accounts on X, Threads, Facebook, and Truth Social, according to campaign advisers. The President’s TikTok account was unveiled during the SuperBowl over the weekend and already has more than 65,000 followers as of Monday. Biden’s first video on the app also has more than half a million viewers.

“The campaign will continue meeting voters where they are, innovating to create content that will resonate with critical audiences and the core constituencies that make up the President’s diverse and broad coalition of voters,” advisers said. Biden campaign advisers added that they “are taking advanced safety precautions around our devices and incorporating a sophisticated security protocol to ensure security.”

So why the hypocrisy?

Meanwhile, White House spokesperson John Kirby said nothing has changed about TikTok use from a national security perspective. Some users feel Biden’s move to join TikTok is a sign of how badly Democrats want to court young Americans ahead of the election.

“It’s shameful that Biden is embracing TikTok to compensate for bad polls driven by his mental decline,” Senator Tom Cotton posted on X. He also called TikTok a “spy app for the Chinese Communist Party.” Senator Josh Hawley also posted on X, apparently having never heard of irony, saying, “Joe Biden is so desperate to do anything to help his sad reelection bid he’s willing to use a Chinese spy app his own government has outlawed.”

While it remains to be seen how much of an impact Biden’s TikTok account will have on the elections, one thing is for certain: TikTok will most likely not be going anywhere. For now, the social media app can be relieved with this “small big” win.

The post After all the drama about security and privacy, Biden joins TikTok  appeared first on Tech Wire Asia.

In the digital age, the intersection of technology, policy, and human rights often manifests in internet freedom and content regulation. Two prominent examples of this are seen in China and India. In China, the government maintains one of the world’s most comprehensive and sophisticated internet censorship systems. Known colloquially as the “Great Firewall,” this system blocks access to numerous foreign websites and rigorously monitors and censors the domestic digital landscape. This approach reflects the Chinese government’s commitment to maintaining strict control over information and public discourse, citing national security and social stability.

In contrast, India, while boasting a relatively open internet, has experienced its share of government intervention in digital content. Particularly in times of political unrest or social tension, the Indian government has been known to temporarily shut down internet access in specific regions or demand the removal of content from social media platforms that it deems a threat to public order or national security. Although often justified in the moment under the guise of maintaining peace and order, these actions raise concerns about the balance between state control and freedom of expression.

Malaysia’s surge in social media content regulation

Similar trends in content regulation and concerns about freedom of speech are evident in Malaysia. In the first six months of 2023, Meta and China’s TikTok restricted a record number of social media posts and accounts in Malaysia, as indicated by data released by these firms. This surge in content moderation coincided with increased government requests to remove content.

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Prime Minister Anwar Ibrahim’s administration in Malaysia, which assumed power in November 2022 on a reform platform, has been accused of reneging on  its commitment to safeguard freedom of speech. Reuters reported that this accusation arose amid heightened scrutiny and online content regulation in recent months. The Malaysian government, however, refutes claims of suppressing online dissent, stating its intention to limit provocative posts that potentially incite issues related to race, religion, and royalty.

In the first half of this year, Meta implemented restrictions on approximately 3,100 Facebook and Instagram pages and posts for Malaysian users. This action was based on reports alleging these pages and posts violated local Malaysian laws, as detailed in Meta’s semi-annual Transparency Report. The number of restrictions marked a significant increase, sixfold higher than the previous six months and the most substantial since Meta started documenting such actions in Malaysia in 2017.

In a recent statement, the Malaysian Communications and Multimedia Commission clarified that its requests to remove content from social media were driven by a need to shield users from a sharp rise in online harm rather than suppress diverse opinions.

From July 2022 to June 2023, Meta responded to requests from the Malaysian communications regulator and other government bodies by restricting over 3,500 items. These included posts critical of the government and others purportedly breaching laws against illegal gambling, hate speech, racial or religious division, bullying, and financial scams, as per Meta’s report.

Malaysia asked Meta and TikTok to remove more content in 2023. (Source -X).

TikTok’s compliance and challenges in Malaysia

Similarly, TikTok reported receiving 340 requests from the Malaysian government in the first half of 2023 to remove or limit access to certain content, impacting around 890 posts and accounts. The platform took action against 815 of these, citing violations of local laws or its own community guidelines. This figure was the highest for any six-month period since TikTok started reporting such data in Malaysia in 2019, and triple the number from the latter half of 2022. Malaysia’s requests to TikTok were the most numerous in Southeast Asia during this period. Unlike TikTok, Meta did not disclose the total count of government requests for content restrictions on its platforms.

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The Malaysian Communications and Multimedia Commission also reported a 24-fold surge in harmful content on social platforms, jumping to 25,642 cases in 2023 from just 1,019 in the previous year. This figure included instances of scams, illegal sales, gambling, fake news, and hate speech. However, the Commission did not specify the breakdown of this harmful content across different platforms.

Communications Minister Fahmi Fadzil recently refuted claims that he sought the removal of social media posts criticizing him, asserting that the regulator’s actions were often based on public complaints. He emphasized the sensitivity of race and religion in Malaysia, a country with a predominantly Muslim Malay majority and substantial Chinese and Indian minorities, which also has laws against seditious comments or insults towards its monarchy.

Communications Minister Fahmi Fadzil. (Source – Shutterstock).

Concerning TikTok, Fahmi raised issues in October about the platform’s inadequate response to defamatory or misleading content in Malaysia and its failure to fully comply with specific local laws, without specifying which. After meeting with TikTok representatives, he stated these concerns, highlighting the need to address content distribution and advertising purchase issues that had elicited complaints.

Fahmi acknowledged TikTok’s assurance of cooperation with the Malaysian government, attributing some of its operational lapses to the absence of a local representative in Malaysia. When asked for a comment on the Minister’s remarks and the meeting’s outcomes, TikTok’s spokesperson did not immediately respond.

This scenario is part of a broader scrutiny TikTok faces in Southeast Asia. For example, Indonesia’s government recently paused transactions on the platform following a ban on e-commerce trade on social media. Meanwhile, Vietnam is investigating the app for what it describes as “toxic” content.

Reiterating its commitment to compliance and cooperation, TikTok has stated its intent to proactively tackle the issues the Malaysian government raised. A spokesperson for TikTok confirmed the company’s respect for and adherence to Malaysia’s laws and regulations. The company has organized meetings with Malaysia’s communications regulator to align its operations with Malaysian expectations and legal requirements.

This proactive stance by TikTok came after Fahmi became concerned about content management and legal adherence, alongside the wider scrutiny the platform endures in the region.

The broader impact on free speech and expression

In a related development, the Malaysian government has considered legal action against Meta for not addressing “undesirable” content – but decided against it following discussions with the company.

However, free speech advocates, such as Article 19, have criticized the removal of government-critical posts. The group expressed concerns about the rising number of requests to restrict content, warning that this could impede legitimate free speech and expression.

“It is never permissible to prohibit expression solely because it casts a critical view on social issues, public figures or government institutions,” said Nalini Elumalai, the senior Malaysia program officer at Article 19.

Social media censorship is by no means only a Malaysian issue, but recently it’s an especially complicated one.

The post Social media giants respond to Malaysia’s rising content restrictions appeared first on Tech Wire Asia.

Apps in sectors such as gaming, retail, food/ride-hailing, fintech, travel, and telco are experiencing a surge in consumer time and transactions. Brands are recognizing the increasing importance of developing robust app insights and capabilities to capitalize on this growing user engagement.

The State of Mobile 2023 report by data.ai reveals that people in mobile-first markets spend an average of 5 hours daily on their mobiles. In 2022, the average amount of time spent across the top 10 markets reached 5 hours and 2 minutes, marking a 9% increase since 2020. Notably, users from Indonesia, Brazil, Saudi Arabia, Singapore, and South Korea exceeded 5 hours daily. The most significant growth over four years was observed in Saudi Arabia, Australia, and Singapore, with increases of 68%, 67%, and 62%, respectively.

TikTok’s revenue milestone

data.ai reports that TikTok, the widely popular short video app, has achieved over US$10 billion in gross revenue, a milestone for a non-game mobile app. This significant accomplishment includes nearly US$4 billion earned in one year, primarily from virtual coins used for gifting content creators on the platform.

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In 2023, TikTok faced significant challenges, including efforts by its CEO, Chew Shou Zi, to safeguard the company from a potential US ban or forced sale. This issue was highlighted during a lengthy and tense four and a half hour congressional hearing.

Despite these challenges, 2023 on TikTok was characterized by viral trends and cultural impacts. Users engaged in activities ranging from experimenting with ‘girl dinners’ and cottage cheese recipes to discussing historical topics like the Roman Empire. The platform continued to be a hub for creativity and community, influencing culture and impacting lives globally.

2023 was a milestone year for TikTok. The app was the first to exceed US$1 billion in consumer spending in a single quarter (Q1). Starting the year with over US$6.2 billion in consumer spending, it added an impressive US$3.8 billion by the end of the year, marking a 61% growth since the beginning of 2023 and a 15% increase over 2022’s US$3.3 billion.

TikTok’s yearly global consumer spend 2016-2023. (Source – data.ai).

TikTok has now joined the elite group of mobile apps that have surpassed US$10 billion in gross revenue, becoming one of only five apps to achieve this feat – and the first non-game app to do so. It ranks among mobile giants such as Candy Crush Saga, Honor of Kings, Monster Strike, and Clash of Clans. As the year ends, its closest competitors, Tinder and YouTube, still lag by US$2 to US$3 billion.

A look at TikTok’s financial growth

In terms of revenue contribution, US consumers and iOS users in China are tied, each accounting for around 30% of TikTok’s total revenue, collectively making up 60%, or approximately US$6 billion. Following them, the top five markets contributing to the app’s revenue include Saudi Arabia, Germany, the United Kingdom, and Japan, accounting for around 13% of the revenue.

The primary source of TikTok’s revenue is its virtual currency, TikTok coins. Since the app doesn’t offer subscriptions, these coins, obtained through various one-time in-app purchases (IAPs), are used by users to buy virtual gifts for content creators. Creators can then exchange these gifts for virtual diamonds, which can be converted into real money. TikTok retains 50% of this revenue. In 2023, the most popular purchase was the 1,321 coin bundle for US$19.99, representing about a quarter of the app’s IAP income, according to data.ai Intelligence.

Cumulative global consumer spend for top apps (2016-2023) – Source – data.ai).

Looking ahead to 2024, data.ai forecasts even more significant revenue growth for TikTok, projecting consumer spending of US$15 billion, which would be 50% more than its current total. This anticipated increase is in addition to TikTok’s other revenue sources, including in-app advertising and the newly launched e-commerce feature, TikTok Shop, introduced in September of this year.

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Lexi Sydow, head of insights at data.ai, predicts a bright future for TikTok, suggesting it may become the highest-earning mobile app ever by 2024, nearing the US$15 billion mark. Daily consumer spending on the app, primarily for tipping favorite content creators, exceeds US$11 million. This spending is expected to propel TikTok past even Candy Crush Saga, the most profitable mobile game. Sydow also anticipates that users will spend the equivalent of a 40-hour work week each month on TikTok by the end of 2024, a 22% increase from 2023.

What is TikTok aiming for in 2024?

In 2023, TikTok was a hub for practical tips, nostalgic music, and thriving small enterprises, with its community actively creating, connecting, and celebrating authentic content. The platform attracted an audience eager for new perspectives, communities, and stories, where brands played a pivotal role in shaping the year’s trends.

TikTok recently unveiled its TikTok What’s Next Report 2024, the fourth edition of its annual trend forecast. This report aims to equip marketers with crucial insights into the changing preferences and needs of the TikTok community, thereby influencing strategies for the forthcoming year.

TikTok 2024 – a round of acquisitions? Go ask Tokopedia…

For 2024, the TikTok community is set to adopt a mindset termed ‘Creative Bravery’, characterized by curiosity, imagination, vulnerability, and courage. Brands displaying Creative Bravery on TikTok are expected to establish stronger community connections. Achieving success on TikTok now involves embedding Creative Bravery into everyday practices and strategic planning. Brands that continually spark global curiosity, upend traditional storytelling norms, and build trust with their audience are predicted to see the most success.

This report centers on the most impactful and enduring trends, identified as ‘Trend Signals.’ These signals detect content patterns that indicate emerging behaviors and interests, providing vital information for long-term content strategies. The three categories of Trend Signals are curiosity piqued, storytelling unhinged, and bridging the trust gap.

• Curiosity piqued: TikTok users are exploring a broad range of topics, leading to novel discoveries and real-life actions. For instance, beauty brand Clinique capitalized on TikTok’s dynamic search capabilities in a comprehensive campaign, significantly increasing conversion and click-through rates.
• Storytelling unhinged: Storytelling on TikTok is transforming with non-traditional narrative structures and community-driven content. Using a mix of creative strategies, IGG’s launch of its game Viking Rise on TikTok successfully engaged millions of users, exemplifying this trend.
• Bridging the trust gap: Consumers seek more meaningful engagement with brands, beyond mere transactions, and seek brands that contribute to societal change and demonstrate transparency. Indonesian childcare brand Makuka’s collaboration with TikTok creators for its product launch illustrates this trend, leading to a notable boost in sales and brand recognition.

The landscape of mobile app usage is undergoing significant transformation across various sectors, with a notable surge in consumer engagement and transactional activity. TikTok, in particular, stands out for its exceptional growth, surpassing US$10 billion in gross revenue and marking a new era for non-gaming mobile apps.

Despite facing challenges and regulatory scrutiny in 2023, TikTok has remained a cultural force, driving trends and user engagement through its unique blend of content. This engagement is set to increase, with predictions for even more significant revenue growth in 2024, bolstered by diverse revenue streams, including in-app purchases and e-commerce integrations.

It feels like an age since calls to ban TikTok.

The post TikTok breaks records as first non-game app to exceed US$10 Billion – plus plans for 2024 unveiled appeared first on Tech Wire Asia.

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In a sudden twist of events roughly two months ago, TikTok, the widely embraced social media platform from China’s ByteDance, temporarily suspended its e-commerce services in Indonesia. The decision was prompted by regulatory mandates instituted by the Indonesian government to protect local merchants’ interests.

Fast forward to this week, and TikTok has orchestrated a remarkable strategy in the archipelago, unveiling plans to invest over US$1.5 billion and secure a 75% stake in Tokopedia, the nation’s largest e-commerce platform. 

TikTok’s decision to temporarily shut down its e-commerce services in Indonesia reflects the complex interplay between regulatory compliance, market dynamics, and strategic investments. But the social media giant did say it would recalibrate its approach to navigate the evolving regulatory landscape.

That said, the strategic move to collaborate with Tokopedia underscores TikTok’s commitment to the Indonesian market. It allows the company to continue its ‘Shop’ operations, showcasing the platform’s resilience in navigating regulatory challenges.

Indonesia’s Trade Minister Zulkifli Hasan poses during the launch of social media video sharing app TikTok and Indonesia’s leading e-commerce site Tokopedia’s Buy Local Campaign in Jakarta on December 12, 2023. (Photo by Yasuyoshi CHIBA / AFP).

The Indonesian government mandated TikTok to halt its e-commerce services temporarily in October this year; the move was solely to ensure a level playing field for local merchants and protect their interests within the fiercely competitive e-commerce sector.

For TikTok, it was a detrimental move, especially for TikTok Shop, considering Southeast Asia is the app’s biggest market in terms of users, and Indonesia, the region’s biggest economy and most populous nation, is the most significant market for the platform. 

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In fact, Indonesia was so critical to TikTok’s plans that it was the first nation to pilot the app’s e-commerce arm, TikTok Shop. The country of 278 million people was supposed to be a template for a global expansion from the US to Europe. When talks on the new ruling were making waves, TikTok argued that separating social media and e-commerce would hamper innovation and hurt millions of merchants and consumers. 

According to the country’s Director General of Public Information and Communications of the Ministry of Communications and Informatics, Usman Kansong, Tiktok Indonesia has two permits from his ministry. “There are two permits: social media and e-commerce. But with Minister of Trade Regulation No. 31 of 2023, Tiktok must separate social media from e-commerce,” he added.

TikTok has a new strategy in Indonesia

The logo of Indonesia’s leading e-commerce site Tokopedia is seen during the launch of the Buy Local Campaign in Jakarta on December 12, 2023. (Photo by Yasuyoshi CHIBA / AFP).

When the ByteDance-owned TikTok unveiled its strategic move on Monday, it said the plan was to invest US$1.5 billion in a unit of Indonesia’s GoTo, aiming to salvage its shopping business following regulatory challenges in the country. In a letter to investors, GoTo said TikTok will secure a controlling 75.01% stake in Tokopedia, an e-commerce unit within the GoTo umbrella. 

As a part of this transaction, Tokopedia is set to acquire TikTok Shop’s Indonesia business for US$340 million, expanding its footprint in the dynamic Indonesian e-commerce landscape. “As part of the agreement, Tokopedia and TikTok Shop Indonesia’s businesses will be combined under the existing PT Tokopedia entity in which TikTok will take a controlling stake. The shopping features within the TikTok app in Indonesia will be operated and maintained by the enlarged entity,” GoTo’s statement reads.

The arrangement will allow TikTok and GoTo to serve Indonesian consumers and MSMEs comprehensively. “GoTo will benefit from the growth of the enlarged entity and will remain an ecosystem partner to Tokopedia through its digital financial services via GoTo Financial and on-demand services via Gojek. GoTo will also receive an ongoing revenue stream from Tokopedia commensurate with its scale and growth,” GoTo noted.

What will unfold next?

According to both companies, the strategic partnership will kick off with an initial pilot period conducted in close collaboration with and under the supervision of relevant regulators. The Beli Lokal initiative’s inaugural campaign is scheduled to launch on December 12, aligning with Indonesia’s National Online Shopping Day (Harbolnas) — a government initiative to foster the country’s digital economy by bolstering local MSMEs. 

TikTok pulls a power move in Indonesia.

“This campaign, accessible on both TikTok and Tokopedia, will spotlight a diverse array of merchants, placing a significant emphasis on Indonesian products. Going forward, TikTok, Tokopedia, and GoTo will transform Indonesia’s e-commerce sector, creating millions of new job opportunities over the next five years,” GoTo added. The transaction is expected to close in the first quarter of 2024.

The coming months will unveil how TikTok’s bold moves will shape the narrative of e-commerce partnerships and regulatory compliance in this dynamic market.

The post TikTok to revive its e-commerce in Indonesia with Tokopedia takeover appeared first on Tech Wire Asia.

Throughout 2023, a significant trend of layoffs has swept across various industries, notably impacting the global workforce and becoming a focal point of discussion and ongoing strategy. Once lauded for its growth and innovation, the gaming industry has been particularly affected, with numerous well-known companies announcing layoffs.

These cuts, influenced by shifts in consumer behavior, technological progress, and economic pressures, reflect a broader trend within the global economy, highlighting the vulnerability of even dynamic sectors to economic uncertainties and strategic changes.

2023…A year of significant layoffs in the gaming industry

The gaming sector has experienced considerable headcount reductions due to these economic challenges. As reported by Farhan Noor’s videogamelayoffs.com, over 6,100 gaming employees have been laid off in 2023 so far. However, this figure might be an underestimation, as many companies have not fully disclosed the full extent of their job cuts.

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Tech Wire Asia delves into some notable layoffs within the gaming industry this year (so far), underscoring the sector’s response to the prevailing economic climate.

Unity

In 2023, Unity Technologies, a major player in the gaming industry, announced two significant rounds of layoffs as part of its workforce restructuring efforts. The first round in January impacted 284 employees, attributed by CEO John Riccitiello to economic conditions and a need for strategic investment focus, mainly affecting administrative roles and discontinuing certain projects.

A subsequent layoff in May saw an additional 600 employees, approximately 8% of the workforce, let go, aligning with Unity’s goals to streamline operations and reduce its office footprint from 58 to 30 amid recession concerns. This brought Unity’s total staff to around 7,000, following a previous reduction of about 200 employees in June 2022.

Despite reporting its first profitable quarter, Unity is implementing restructuring plans, including team changes and reducing office space, which are expected to incur around US$26 million in charges. The company’s Q3 earnings report highlighted further cost-saving measures and a conservative outlook for 2023. Unity also faced challenges within the game development community due to a controversial pricing model, leading to CEO Riccitiello’s retirement and pricing strategy revisions.

These changes at Unity reflect a broader trend of instability in the video game industry, marked by layoffs, shutdowns, and restructuring, even amid mixed financial performances. That highlights the sector’s volatility and its susceptibility to broader economic uncertainties.

Epic Games

Epic Games has announced a significant workforce reduction, laying off around 16% of its employees, totaling around 830 people. This move is part of the company’s strategy to achieve financial sustainability amid heavy investments in the evolution of Epic and the development of Fortnite as a metaverse-inspired ecosystem. The CEO acknowledged the need for layoffs, contrary to their initial optimism, due to changes in Fortnite‘s economic model, shifting towards a creator-driven model with significant revenue sharing.

Epic Games is laying off 830 people. (Source – Shutterstock)

Efforts to reduce costs, including net zero hiring and decreased spending on marketing and events, proved insufficient, leading to the decision to lay off staff. Additionally, Epic is restructuring its portfolio, with Bandcamp being acquired by Songtradr and SuperAwesome’s advertising business becoming independent, while Kids Web Services remains with Epic.

Epic is offering substantial severance packages to affected employees, including six months of base pay, healthcare benefits, accelerated stock options vesting, and other support services. Despite the layoffs, the core development teams at Epic are largely unaffected, with most of the job cuts impacting non-core departments. Some projects may experience delays though, due to reduced resources.

Epic assured the market that these layoffs have financially stabilized the company, with no further workforce reductions planned. The company will continue hiring for essential roles while maintaining net-zero hiring at its revised size, reaffirming its commitment to ongoing projects and investments in the gaming and development sectors.

Bytedance

ByteDance, the parent company of TikTok, is significantly downsizing its gaming division, Nuverse, due to lackluster performance over the past two years. This restructuring marks a significant shift from ByteDance’s initial strategy, where it positioned its gaming pursuits as a critical business unit to compete with industry giants like Tencent, NetEase, and MiHoYo.

The downsizing process began with widespread layoffs, creating uncertainty for many Nuverse employees. As of 2021, Nuverse had grown to a team of about 3,000 people, and its size had remained relatively stable. ByteDance had made significant investments in the gaming sector, including the US$4 billion acquisition of Moonton, a Shanghai-based studio. Despite this, ByteDance is reportedly considering selling Moonton, with negotiations in progress with a Saudi Arabian firm.

While there were initial speculations about a complete shutdown of Nuverse and a withdrawal from mainstream gaming, ByteDance’s statements suggest that some segments of the gaming team might continue operations.

ByteDance’s challenges in the gaming industry, including its virtual reality efforts with Pico, highlight the limitations of its data-driven strategy, which is successful in the short-video app market but less so in the gaming sector, where success relies on longer, more creative processes. The gaming industry’s unpredictable nature contrasts with the instant gratification model of TikTok’s videos.

Bytedance gives up on the gaming industry. (Source – X).

Nuverse’s lack of significant commercial successes has likely led to reassessment by ByteDance’s management, especially given the company’s status as a private entity amid US-China tensions. The wider Chinese internet industry, including the gaming sector, faces additional pressures from regulatory crackdowns and economic challenges, such as the halt in gaming license approvals and constrained recovery due to macroeconomic factors.

Amazon

Amazon has initiated another series of layoffs, impacting over 180 positions, as part of a broader reorganization of its gaming strategy. This includes discontinuing the Crown channel, a Twitch channel known for its TV-like programming, and closing down the Game Growth group, which provided marketing support to gaming creators.

Christoph Hartmann, VP of Amazon Games, described these changes as a strategic pivot to enhance Prime Gaming, with a renewed focus on offering free games to subscribers. This shift responds to customer preferences for free monthly game offerings.

These recent layoffs follow a previous round in April that laid off around 100 roles within Amazon’s games division, underscoring the company’s refocus on key growth areas.

The Crown channel, a component of this restructuring, faced criticism for artificially inflating viewer numbers, which raised questions about its actual viewer engagement and effectiveness as an advertising platform.

According to Amazon spokesperson Brittney Hefner, this restructuring effort aims to concentrate on Amazon’s primary gaming business activities. This strategy includes developing flagship in-house games like New World and a forthcoming Lord of the Rings title, and publishing games from external developers. These moves signify a significant strategic shift in Amazon’s gaming approach, prioritizing in-house game development and publishing.

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Electronic Arts

Electronic Arts (EA) plans to lay off over 700 employees, constituting around 6% of its approximately 12,900-strong global workforce. CEO Andrew Wilson announced this decision despite EA reporting a US$1.3 billion gross profit in the latest fiscal quarter. The company simultaneously lowered its full-year profit forecasts, despite increases in both revenue and profit over the previous year.

Wilson acknowledged EA’s strong position despite macroeconomic challenges and claimed the company was gaining momentum. Nevertheless, the layoffs are part of a strategic shift, refocusing on projects that align with EA’s core strategies of developing games for large online communities, interactive storytelling, and enhancing tools for community and creator engagement.

Successes like The Sims 4, EA Sports FIFA 23, and Apex Legends have been highlights for EA, and the company aims to continue its focus on major projects such as Madden 23, Battlefield 2042, the upcoming Star Wars Jedi: Survivor, and The Sims 5. These layoffs are not directly linked to EA’s decision to remove older Battlefield games from online stores.

Wilson added that some employees might be reassigned to other projects, while those not reassigned will receive severance and additional benefits. These staffing changes began earlier in the quarter and are expected to extend into the next fiscal year beginning in October. Earlier in February, EA laid off 200 Apex Legends QA testers.

Experts note that while large companies often justify layoffs as responses to slowing growth, such measures don’t always result in cost savings and might mirror industry trends. EA estimates these layoffs will cost between US$170 million and US$200 million, per a recent financial statement. EA’s decision to downsize reflects a broader trend of layoffs and restructuring within the gaming industry, driven by various economic and strategic factors.

A user left disappointed with the decision from EA. (Source – X)

Conclusion

The gaming industry in 2023 has faced a turbulent period, marked by significant layoffs and strategic realignments. Companies are adapting to the evolving economic landscape, consumer preferences, and technological advancements. Despite the challenges, these changes might pave the way for a more resilient and innovative gaming sector in the future. The impact of these layoffs extends beyond immediate job losses, influencing the industry’s strategic direction and potentially reshaping the gaming landscape as we know it.

The post Top 5 significant layoffs in gaming in 2023 appeared first on Tech Wire Asia.

Wondering what’s behind the buzz surrounding Temu? You might be intrigued to learn why it’s been such a focal point of global interest. At its core, Temu offers a platform where various products can be procured at surprisingly affordable rates. Top it off, they periodically run “lightning” sales, where items can be snagged at almost 99% off their original prices.

Their diverse range spans from apparel and accessories to beauty essentials and home goods. But before diving in, let’s first understand what exactly Temu is.

What is Temu?

Temu, pronounced ‘tee-moo’, hails from Boston and is an online marketplace, the brainchild of PDD Holding, Pinduoduo’s parent company. While its operating model mirrors that of Chinese e-commerce giants like SHEIN, Wish, and Alibaba, Temu has carved a unique niche for itself.

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Essentially, Temu bridges the gap between sellers, predominantly from China, and global buyers without maintaining a stockpile. It harnesses the power of social commerce, motivating shoppers to rope in more buyers to snag better deals. The platform incorporates gaming elements to boost user engagement and has managed to offer free shipping by adeptly navigating customs duties.

eCommerceDB notes an uptrend in Temu’s app popularity on platforms like Google Play and the App Store. Its debut in September 2022 saw around 440,000 downloads. By April 2023, this number had escalated to 15.3 million. A sharp surge of approximately 98% was observed by May 2023, pushing downloads past the 30 million mark – likely spurred by the media spotlight on Temu. Despite a minor slump in June 2023, downloads resumed their upward trajectory, recently clocking in at over 40.5 million in September 2023.

Downloads of Temu from 2022 to 2023. (Source – eCommerceDB)

However, app downloads are just one piece of the puzzle. Data from Similarweb provides insights into the traffic on Temu’s website, temu.com. The site’s visitation numbers overshadow the app downloads, which is understandable given the ease of website access over app installations. A similar surge was witnessed between April and May 2023, shooting up by 96.5% from 110.6 million visits in April to 217.3 million in May, likely due to amplified media coverage.

What sets Temu apart from other e-commerce platforms?

So, what makes Temu resonate with the masses?

A vast product assortment paired with an engaging, game-centric shopping interface makes Temu a favorite. Its rapid ascent and unique approach have made it a business model worth dissecting.

Breaking down Temu’s five strategic pillars

At a glance, Temu attracts customers with its competitive pricing, free shipping, and enticing discounts. Drawing parallels with SHEIN, Wish, and Alibaba, Temu’s affordability is its strength. Yet, they go further with their free shipping and returns – a feat made possible due to PDD Holding’s expansive supply and distribution networks.

The significance of an efficient logistics framework can’t be stressed enough, especially given the challenges faced by Alibaba and Wish in penetrating the Western market. Furthermore, Temu manages to outdo even SHEIN with its discount offerings.

Blending retail and recreation

A fifth of U.S. online shoppers look for a tactile shopping experience. Temu’s remedy? Incorporating gaming into the shopping journey. Games such as Fishland, Coin Spin, and Card Flip can be played for rewards, enhancing user engagement.

Referrals play a pivotal role in sustaining this gaming feature.

Group purchases: A collective bargain

A concept embraced in Asia, group buying is being introduced to the West by Temu. By consolidating purchases, consumers can tap into bulk discounts. This aligns seamlessly with Temu’s referral scheme, fostering a communal shopping environment.

Influencer partnerships and aggressive marketing

Mirroring SHEIN’s strategies, Temu gifts products to various influencers, especially targeting platforms like YouTube and TikTok. They prioritize the younger demographic, understanding their hesitance to splurge on luxury items. Witnessing a favorite influencer or peer endorsing Temu’s offerings can sway young shoppers towards a purchase.

Balancing innovation with ethics

Temu’s most groundbreaking yet contentious strategy is its reverse-manufacturing approach, mirroring SHEIN. This process channels real-time customer feedback to producers. Initially, limited product quantities are listed, with popular items reordered and less-demanded ones phased out. Temu claims this promotes environmental sustainability by syncing product supply with real-time demand, allowing for a more diverse product array. This approach enabled SHEIN to unveil 150,000 new products in 2020, overshadowing its rivals.

Understanding Temu’s affordable pricing

One of the standout features of Temu is its affordability. This is largely attributed to consumers interacting directly with the primary sellers, bypassing any middlemen. Moreover, Temu follows the “loss leader” approach, prompting sellers to trim their profit margins to bolster the platform’s overall market presence. This strategy allows Temu to offer significant discounts. However, some speculate there are more reasons behind the app’s ultra-low prices.

While Temu’s low prices are enticing, there’s also a downside. Within a year of its inception, Temu garnered negative attention. Time Magazine highlighted issues such as undelivered items, mysterious charges, erroneous orders, and a lackluster customer service response.

Numerous complaints have been filed against the company with the Better Business Bureau, resulting in a mediocre C+ rating.

Furthermore, while the U.S.-China Economic Security Review Commission didn’t explicitly label the platform untrustworthy, it cited concerns about product quality and potential copyright infringements.

Is it legit among other e-commerce platforms?

On Temu, the adage “you get what you pay for” rings true. If a deal appears too good to be true, you might end up with a subpar or imitation version of the intended product. These alternatives often fall short in terms of durability and quality.

Hicober, a hair towel retailer on Amazon, is among several entities that have pursued legal action against Temu, accusing it of selling counterfeit products. China’s Shein, which operates similarly to Temu, has also initiated lawsuits against Temu for allegedly replicating product listings and engaging influencers to tarnish the Shein image. However, it’s worth noting that Temu also lists recognized, blue-checkmarked brands, which are generally considered reliable.

Data security concerns with Temu

There’s growing apprehension surrounding the security facets of the Temu app. A shopper reported to Daily Dot that her American Express card details were compromised after her Temu shopping spree.

While data collection is a common practice for market analysis in the West, Chinese firms sometimes have to share this data with their government. Temu amasses a range of user data, encompassing personal details, access to social media images, and even sensitive information like social security numbers.

Is Temu actually good? (Source – X)

Steve Bernas, Chicago BBB’s President and CEO, suggests that using the app essentially creates a profile of you. With accumulating data, identity theft risks heighten. The connection to China raises red flags since data can be misused in ways detrimental to the U.S.

The post What is Temu and how is it taking over the shopping landscape? appeared first on Tech Wire Asia.

Indonesia, home to an estimated 125 million TikTok users, said farewell to TikTok Shop on October 4th due to a new regulation that bans e-commerce trade on social media. The country, one of the largest markets for TikTok, is officially the first in Southeast Asia to push back against the ByteDance-owned app, even though the social media app’s fastest-growing feature, TikTok Shop, has a burgeoning fan base in Indonesia. 

TikTok launched the shopping feature in Indonesia in 2021, and its instant success has encouraged it to expand into online retailing in other markets, including the US. Unfortunately, TikTok has been forced to end its e-commerce feature in the Southeast Asian nation this week or risk losing its local operating license. The move will impact roughly two million small businesses on TikTok Shop.

“Our priority is to remain compliant with local laws and regulations,“ said TikTok. “As such, we will no longer facilitate e-commerce transactions in TikTok Shop Indonesia by 17:00 GMT+7, October 4, and will continue to cooperate with the relevant authorities on the path forward,” the company said in a Tuesday statement.

This picture taken on April 4, 2023 shows a woman watching a TikTok livestream offering merchandise for sale in Jakarta. Despite a potential US ban over national security concerns, data shows the Chinese-owned app’s rapid growth in Southeast Asia with Indonesia accounting for 70 percent of TikTok’s $4.4 billion gross merchandise value in 2022. (Photo by BAY ISMOYO / AFP) / TO GO WITH: Indonesia-internet-economy-livestreaming-Tiktok, FOCUS by Agnes ANYA

TikTok has been betting on Indonesia as a blueprint to expand into other online shopping markets, including the US. By the end of 2022, TikTok Shop had become the fifth-largest e-commerce platform in Indonesia, according to data from Singapore-based venture outfit Momentum Works. 

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Despite its expanding operations, TikTok did not receive an Indonesian payment license and relies on third-party payment service providers within the country. “TikTok currently does not have its own payment and logistics system in Indonesia. TikTok accepts various payment methods for payments, including debit/credit cards, digital wallets, bank transfers, and cash,” the company explained in a fact sheet.

A license would allow TikTok to earn from transaction fees and compete more effectively with other payment service entities. What the authorities in Indonesia want is for TikTok and other platforms to split shopping from social media. The unprecedented regulation for the popular video-viewing app will bring TikTok’s e-commerce thrust to a screeching halt, just as it was gaining traction against Sea Ltd. and GoTo Group. 

“Out of the five million local businesses on TikTok, two million sell on TikTok,” Anggini Setiawan, TikTok Indonesia’s head of communications, told AFP last month. Momentum Works said the country represented 42% of TikTok’s US$4.4 billion regional gross merchandise value (GMV) last year.

What’s next for TikTok Shop in Indonesia?

According to a local media report quoting the country’s Director General of Public Information and Communications of the Ministry of Communications and Informatics, Usman Kansong, Tiktok Indonesia has two permits from his ministry. “There are two permits: social media and e-commerce. But with Minister of Trade Regulation No. 31 of 2023, Tiktok must separate social media from e-commerce,” he added.

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A check on TikTok’s fact sheet suggests that the video-platform app obtained the E-Commerce Foreign Trade Representative Office License (SIUP3A PMSE) from the Ministry of Trade, as required by local law. Usman reportedly told reporters that if Tiktok Indonesia separates itself from TikTok Shop and registers the latter as a separate entity, it can be business as usual for the e-commerce platform. 

TikTok has yet to indicate its next move, besides the fact that there will be discussions with the local authorities. Clearly, the fresh restrictions in Indonesia open a new front in the platform’s fight with regulators worldwide. Should TikTok create a separate app, Bloomberg Intelligence’s analyst, Nathan Naidu, believes it would impede the conversion of its 125 million local monthly active users (MAU) into shoppers.

Merchants acorss the country will be stymied by the latest moves.

Meanwhile, Jianggan Li, CEO of Momentum Works, noted in an email that Shopee has been voicing their support for Indonesian MSME exports yearly. “Banning TikTok Shop could be operationally messy (and many of our friends say impractical). There are many different permutations of how things can evolve (eg, a separate e-commerce app or specific programs for MSMEs).”

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“Regardless of how the ban proceeds, TikTok’s vast consumer traffic will continue to be harvested for e-commerce, through TikTok Shop or other means, by TikTok or other parties,” he noted. Li also believes it is not too late for TikTok to engage and turn the tide. He suggests that TikTok needs to adopt a bold and localized approach.

Is the TikTok ban linked to Indonesia’s upcoming election?

A week before the ban was announced, Southeast Asia’s largest wholesale market, Tanah Abang, was inspected. According to Minister of Cooperatives and Small and Medium Enterprises Teten Masduki, sellers at the market in the capital, Jakarta, were experiencing a more than 50% loss of profits, as they claim an inability to compete with imported products sold online at much lower prices.

At the same time, the Indonesian government accused TikTok of engaging in predatory pricing that disadvantages local SMEs. The response from TikTok is that “TikTok does not set the price for products on the platform. Merchants can price products at the desired level according to their business strategy. Products on TikTok Shop and other e-commerce platforms in Indonesia are priced at similar levels.”

Even when talks on the new ruling were making waves last week, TikTok argued that separating social media and e-commerce would hamper innovation and hurt millions of merchants and consumers. The company says some rely on its platform to make a living, and that all its sellers are Indonesian or have local entities. 

After all, TikTok invested US$10 billion (IDR 148 trillion) in the MSMEs in Indonesia as a form of appreciation to the Government of Indonesia for its support of TikTok.

The post TikTok bows down to Indonesia, shutting ‘Shop’ down. Will a new app arise? appeared first on Tech Wire Asia.

Article by Nathan Hew

The worst is far from over for TikTok, as Indonesia becomes the first Southeast Asian nation to take a stand against the ByteDance-owned platform — making it the latest addition to the list of TikTok ban countries.

In a move that takes effect immediately, Indonesia Trade Minister Zulkifli Hasan told reporters last Wednesday that the country will ban e-commerce transactions on social media platforms to protect offline merchants and marketplaces, adding that predatory pricing platforms have threatened small and medium-sized enterprises. He added that the regulations were in place to ensure “fair and just” business competition as well as protecting users’ data.

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The ban comes as a major blow to TikTok since it intends to invest billions of dollars in Southeast Asia, mainly in Indonesia, over the next few years as the Chinese company plans to build its e-commerce platform, TikTok Shop, which launched in 2021.

Indonesia is one of the world’s biggest markets for TikTok Shop and was the first to pilot the app’s e-commerce arm. The country is home to an estimated 125 million users, according to company figures, including 2m small businesses on TikTok Shop.

TikTok ban countries: Why have many banned this social media platform?

India banned the platform in mid-2020 after a geopolitical dispute with China, costing ByteDance one of its biggest markets, as the government cracked down on 59 Chinese-owned apps. India cited a law that allowed it to block websites and apps in the interests of the country’s “sovereignty and integrity.”

Countries and government bodies — including Britain and its parliament, Australia, Canada, the executive arm of the European Union, France, and New Zealand’s parliament — have banned the app from official devices.

The Bytedance-owned platform was fined roughly US$370 million by European Union (EU) regulators in September for having weak safeguards to protect the personal information of children using the app.

Ireland’s Data Protection Commission, which issued the penalty on behalf of the EU, reported that TikTok’s default setting did not properly protect children’s privacy, nor was the company transparent in explaining what it was doing with data of users aged 17 and younger. The fine is the first one issued against TikTok by the 27-nation bloc for violating data protection laws.

Similarly, TikTok was fined £12.7 million by UK privacy regulators for failing to protect children’s data. According to the UK’s Information Commissioner’s Office (ICO), the Chinese company allowed 1.4 million children under 13 to use the app in 2020, despite its own rules requiring users to be above this age to create a TikTok account.

Despite hefty fines, TikTok’s global revenue continues to soar. (Source: AFP)

What is the price of doing business for TikTok?

ByteDance’s revenue surged more than 30% to surpass US$80 billion in 2022, matching arch-rival Tencent Holding after twin video platforms TikTok and Douyin drew eyeballs and advertisers, South China Morning Post reported.

Its report also revealed that an anonymous source shared that the world’s most valuable private tech firm told its investors in a memo that revenue surged from around US$60 billion in 2021. This double-digit growth topped most global internet leaders, including Meta Platforms and Amazon.com.

Then, there’s the maximum limit of fines that regulators can impose. For instance, the maximum fine ICO in the UK can issue is £17.5 million or 4% of the total annual worldwide turnover in the preceding financial year, whichever is higher. Regardless, these fines are a drop in the ocean compared to TikTok’s global revenue.

Business of Apps data shows that TikTok had 1.7 billion monthly active users in 2023 and the company is predicted to reach two billion by the end of 2024.

The post What is the price of doing business for TikTok? appeared first on Tech Wire Asia.

On TikTok, users find themselves watching many types of content, each with its own unique appeal. From TikTok trends to explanatory videos to funny memes, the content on TikTok can be not just addictive, but also influential.

Many users try to mimic existing content on TikTok, especially for videos that have gone viral or become trends. This is nomally harmless – but there has been some content of this kind that was harmful.

Because of that, TikTok has invested in tools to detect and remove such content. But identifying harmful content is still a big challenge, especially with creators continually finding ways to avoid being detected and blocked by the algorithm.

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TikTok’s Community Guidelines for content states: “To help ensure a safe, trustworthy, and vibrant experience, we maintain a set of Community Guidelines that include rules and standards for using TikTok. The guidelines apply to everyone and everything on our platform. They are informed by international legal frameworks, industry best practices, and input from our community, safety and public health experts, and our regional Advisory Councils. We evolve them to address emerging risks and potential harms that may occur from new behaviors.”

At the same time, the social media app, which has over 1.67 billion users worldwide, continues to deal with legal issues around the world. The US wants to ban TikTok completely due to concerns that the app is spying on users, with some states already implementing it. A few other countries have also moved to block the app from being used on government devices.

But this is not stopping the social media giant from growing its fan base. And with a large fan base also comes huge advertising opportunities for businesses. According to statistics, TikTok generated US$4 billion from advertising revenue, a figure that is expected to double by 2024 and quadruple by 2026.

TikTok has been flooded with crypto scams.

Scammers are flooding TikTok content

Given the success of TikTok’s reach, it only makes sense for scammers to make use of the platform as well. TikTok content has been proven to be influential, especially in getting users to try new products or even investments. Some users even prefer getting their news on the app instead of relying on actual news websites.

According to a report by Bleeping Computer, TikTok has recently seen a surge of fake cryptocurrency giveaways. The videos seem to be based on Elon Musk. These scams have been around for some time but have resurfaced again on TikTok.

As users scroll through the app, a deepfake video of Musk talking about cryptocurrency appears. While most users would just ignore it, some would continue watching and even click the link on the clip.

The report also stated that scammers have set up hundreds of websites that pretend to be crypto-exchanges or giveaway sites that prompt users to register an account to receive free cryptocurrency. However, as more skeptical observers might expect, these scams simply steal any deposited crypto, with the users receiving nothing in return.

Victims end up losing their money when they try to withdraw the funds they’ve invested in the scam. While it is uncertain how much has been lost to the scams, reports are showing more victims have fallen to such scamming methods on TikTok.

A screenshot of TikTok content featuring the scam.

From TikTok to X, scam content is everywhere

TikTok is not the only social media platform flooded with scam content. Reports show that even X (Twitter) is filled with similar tweets, with the aim of scamming users into investing their funds in crypto scams.

Dating apps are also tricking victims into falling into such scams. A recent report by Sophos highlighted a major pig butchering operation that was utilizing fake trading pools (liquidity pools) of cryptocurrency to steal more than US$1 million.

Sophos X-Ops first learned of this liquidity mining operation from a victim. The victim had connected on the dating app MeetMe with a scammer. Following weeks of conversation, the scammer mixed her romantic promises with persistent attempts to convince the victim to invest in crypto.

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The victim opened a Trust Wallet account (a legitimate app for converting dollars to cryptocurrency) and connected to the liquidity pool site the scammer recommended. In reality, the pool site was a fraud site utilizing the brand of Allnodes, an established decentralized finance platform provider, as a cover. After investing US$22,000 in the scheme, the scammers emptied the victim’s digital wallet.

“When we first discovered these fake liquidity pools, they were rather primitive and still developing. Now, we’re seeing scammers taking this particular brand of cryptocurrency fraud and seamlessly integrating it into their existing set of tactics, such as luring targets over dating apps. Very few understand how legitimate cryptocurrency trading works, so it’s easy for these scammers to con their targets,” said Sean Gallagher, principal threat researcher at Sophos.

Gallagher also pointed out that there are even toolkits for this sort of scam now, making it simple for different pig butchering operations to add this type of crypto fraud to their arsenal. In 2022, Sophos tracked dozens of these fraudulent ‘liquidity pool’ sites, and now they’re seeing more than 500.

You can read the full report of this scam here.

Scammers are using dating sites as well. (Image – Shutterstock)

Scammers are getting better at content development

Be it TikTok, Facebook, or even dating sites, scammers are getting better at developing content to lure victims. That’s partly enabled by artificial intelligence (AI). Generative AI tools today can help scammers not only create perfect scam emails but also produce seemingly genuine content.

For dating apps, generative AI can be used to create personalities and even come up with romantic replies to lure victims in. But what makes it even more concerning is the use of deepfake technologies.

Scammers can tamper with pictures of real people and use them to prey on victims. Elon Musk is just one example of a scam on TikTok. For dating sites, scammers could use a deepfake profile pic and even use AI to create a personality to convince their victims to fall for their tricks.

TikTok may be trying to remove such content, but with technology only getting better, it may take a while for it to actually detect deepfakes on its site. The same applies to dating sites.

As such, victims need to be aware of such scams and make sure they don’t fall for them. Background checks and good cybersecurity hygiene practices could eventually save potential victims a lot of money.

Take the video below for example. Just by looking at the content, quality and the watermark, one should be able to know that it’s a deepfake video. Simple checks like that can make a difference.

The post Tiktok seeing more content scams appeared first on Tech Wire Asia.