Amazon's TikTok ban was a false alarm, capping off a whirlwind week of suspicion towards China-backed app
TikTok was supposed to have a triumphant week in advertising with the official launch of a self-serve ad business, but instead it has faced fresh suspicions over its ties to China—and Amazon (almost) issued a security warning about the app to its workforce.
Amazon abruptly rescinded the order that was sent Friday to employees, which told them to delete TikTok from their phones. It was a false alarm, but it was reported by most major media outlets in the U.S. For most of the day, it appeared that a major U.S. corporation banned the app from company phones over security concerns.
It was indicative of the atmosphere of suspicion that is swirling around TikTok. And the Chinese-owned app was still under the glare of the most powerful people in Washington, including the president of the United States.
TikTok, which is owned by ByteDance, a Chinese-based internet company, has catapulted into popularity among young U.S. internet users.
TikTok was in the middle of a breakout moment this week with the launch of its automated ad platform, which opens the app to potentially millions of small businesses. But this week it was also called out by the Trump administration, which said it was looking into possibly banning TikTok because of its corporate origins. At the same time, Facebook, one of TikTok's strongest rivals, is the target of a massive brand boycott.
Ana Milicevic, co-founder at Sparrow Advisers, a consulting firm that works with brands and tech companies, says that the timing of the TikTok backlash is noteworthy and could speak to the political forces at work. TikTok is a foreign company under scrutiny in Washington D.C., and it was just emerging as a potential threat to the largest internet ad companies in the U.S., including Facebook, Google and Amazon.
"There are so many layers to this," Milicevic says. "The additional scrutiny of TikTok may well be warranted, but it really needs to apply across the board, and right now with this TikTok outrage, it seems to be applied very selectively."
TikTok may seem like a surprising front for a national security threat. The app is the first major breakout internet sensation in the U.S. from overseas. It's a short-form, musical video app that appeals to teenagers, who seek stardom through virality.
TikTok has more than 30 million daily users in the U.S., according to a pitch deck from the company obtained by Ad Age last year. But it has grown since then, as it sits atop app download rankings on iPhone and Android devices.
The latest figures from Comscore show TikTok has more than 50 million unique U.S. visitors a month. Snapchat, a TikTok rival, has 88 million daily users in North America, according to its latest quarterly report.
Washington has taken notice of TikTok's runaway success, and Congress and the national security agencies have been investigating the company, looking for any threats that could emerge from a Chinese company potentially having access to all that U.S. consumer data.
The app was recently put on Trump’s radar when its users were credited with sabotaging his campaign rally in Tulsa. TikTok users joined an online movement to sign up to attend his speech, but fail to show up, leaving their seats empty. Trump was reportedly deflated following the rally because fewer people attended than he expected.
On Friday, Amazon's initial email told employees to delete the app over "security concerns." Amazon later said the email should never have been sent. "This morning’s email to some of our employees was sent in error,” Amazon said in a statement to Ad Age. “There is no change to our policies right now with regard to TikTok.”
"User security is of the utmost importance to TikTok," a TikTok spokeswoman said in an email statement. "We are fully committed to respecting the privacy of our users. While Amazon did not communicate to us before sending their email, and we still do not understand their concerns, we welcome a dialogue so we can address any issues they may have and enable their team to continue participating in our community."
In the past year, TikTok has made changes to its corporate structure to distance itself from China. The company has always insisted that it does not store U.S. data in China, and this year it made moves to open more offices in the U.S. It hired a law firm in the U.S. to help it build relationships in Washington.
TikTok has also been on a hiring spree in the U.S., poaching top talent from tech and advertising. In May, TikTok hired Kevin Mayer, the head of Disney+, to be its new CEO in the U.S.
"As we consider the best path forward, ByteDance is evaluating changes to the corporate structure of its TikTok business," the TikTok spokeswoman said in a statement regarding the company's plans to create even more distance from China, which was reported by Bloomberg News this week.
This year, TikTok has been making inroads on Madison Avenue, and major brands are jumping into the app to run campaigns and work with the popular stars creating for the app. Chipotle, Walmart, Netflix, Red Bull and others have been early adopters.
Hollywood stars like Will Smith and Jennifer Lopez have taken up TikTok, while online celebs, like Charli D'Amelio and Loren Gray, started their careers on the platform.
"Even if some brands begin banning the use of TikTok among employees, the overwhelmingly young user base isn’t likely to budge," says Jack Mackinnon, senior principal analyst at Gartner for Marketers. "TikTok users are already on the platform despite data privacy and security concerns because they’re drawn to its creative content."