Much has been said recently regarding possible national security risks posed by TikTok to the U.S. and the 150 million American users of TikTok. App. efforts have also been made to downplay and deflate critical facts on the topic. As with any AI related matters, the truth cannot be gained from television or general internet sources. On April 21, 2023, Forbes published an article entitled SECURITY FAILURES AT TIKTOK’S VIRGINIA DATA CENTERS: UNESCORTED VISITORS, MYSTERY FLASH DRIVES AND ILLICIT CRYPTO MINING. Here is the URL for this article, which I recommend for anyone who uses TikTok or is a parent of a child who uses this platform: https://www.forbes.com/sites/emilybaker-white/2023/04/21/security-failures-tiktok-virginia-data-centers-unescorted-visitors-flash-drives/?sh=6899658beb6e
Here are certain revealed in the Forbes investigation, based on interviews with seven current and former employees and more than 60 documents, photos and videos from the data centers;
- TikTok’s data centers are still heavily connected to ByteDance’s business in China; (ByteDance is based in Beijing but registered in the Cayman Islands. ByteDance disclosed in December that four employees gained access to data about reporters and people connected to them while looking for how information about the company was leaked ).
- The data centers servers are made by Inspur, a company the Pentagon says is controlled by the Chinese military and which has been sanctioned by the U.S.;
- As of April of this year, server work orders were sent to data center technicians by Beijing ByteDance Technology Co. Ltd a company partially owned by the Chinese government. TikTok asserts that the Chinese Government has no control over is operations.
- Six sources told Forbes they heard of employees using servers to mine cryptocurrency
It is not a stretch to assume that the CIA and NSA have investigated TikTok and likely know whether the company is controlled by the Chinese Government and its military arm. This month, the Washington Post published an article that stated that hackers affiliated with China’s Army hacked into computer systems of two dozen critical infrastructure entitles in the U.S. including a water utility, power grid, Preciously Chinese hackers had attacked and burrowed into the computer systems in our oil and gas pipelines and rail systems. It makes no sense to me that the Chinese Government would be engaged in these activities but would remain untethered to TikTok, which has over 150 million U.S. subscribers.
In March, reports surfaced from Congress that a former TikTok employee turned whistleblower met with several U.S. senators stating that TikTok’s code connects it with Toutiao, a Chinese news app also run by TikTok’s parent company, ByteDance. This could let employees intercept and view U.S. user data. In May 2023, a former executive for TikTok’s parent company ByteDance, Yintao Yu, who was the head of engineering for ByteDance’s U.S. operations filed a lawsuit in California superior court stating that the Chinese Communist Party has used ByteDance as a propaganda took to suppress or promote content on what is favorable to China’s interests. His complaint alleged Mr. Yu was fired because he raised concerns about a “worldwide scheme” to steal and profit from other companies’ intellectual property. He told The New York Times in an interview that he saw engineers for the Chinese version of TikTok push content that spread anti-Japanese sentiment. Yu explained that data for U.S. users of TikTok was stored in the U.S. while he worked for the company, but engineers in China still had access to it. In the documents submitted to the court he said ByteDance had a “superuser” credential — also known as a god credential — that enabled a special committee of Chinese Communist Party members stationed at the company to view all data collected by ByteDance including those of U.S. users.
There are no TikTok shares on the stock market because ByteDance Lts, TikTok’s owner, is privately held. You can buy shares in the private equity companies that own stock in TikTok. Shares in TikTok are owned by the founder Yiming Zhang, Bytedance, and seven private equity firms: Coatue, General Atlantic, Hillhouse, KKR, Sequoia Capital, Softbank, and Source Code Capital.
Analysts say ByteDance powers TikTok with some of the world’s most sophisticated Artificial Intelligence (AI). The AI is why Microsoft (MSFT) tried to buy TikTok’s North American operations in August 2019. Analysts consider AI the secret ingredient in TikTok’s recipe for success.
Additional point: Recently, TikTok also added a section to its terms and conditions, that all legal complaints be filed within one year of any alleged harm caused by using the app. The terms now say that TikTok users “forever waive” rights to pursue any older claims. And unlike a prior version of TikTok’s terms of service archived in May 2023, users do not seem to have any options to opt out of waiving their rights. To the extent that TikTok asserts that this would cover reporting wrongdoing to the SEC or other federal agency, the caselaw suggests otherwise. see the following related to whistleblower protections: https://www.sec.gov/whistleblower/frequently-asked-questions
JEFFREY NEWMAN AND HIS LAWFIRM REPRESENT WHISTLEBLOWERS UNDER THE SEC, CFTC AND FINCEN WHISTLEBLOWER PROGRAMS. whistleblowers who provide original information to these agencies through counsel, may receive rewards totaling up to 30 percent of any successful recovery made by the SEC, CFTC OR FINCEN and the names and identification of the whistleblowers are not revealed. Jeff Newman can be reached at Jeff@Jeffnewmanlaw.com or at 617-823-3217
