TikTok gets stuck in the middle of a war

That’s the message sent Sunday by the world’s fastest-growing social media app, owned by the Chinese company ByteDance. 

In its announcement that TikTok would suspend content posted from Russia, a response to the that country’s new law punishing the spread of so-called “fake” news, company executives naively said the app is “an outlet for creativity and entertainment that can provide a source of relief and human connection during a time of war.” 

In fact, TikTok has become a primary source of news, information, and disinformation about one of the 21st century’s most significant global conflicts, turning it into a battleground in the war of persuasion. The development puts TikTok, best known for its short-video format and appeal among teens, in uncharted territory that’s complicated by its Chinese roots. 

While its American social media peers—chiefly Facebook, Instagram, and Twitter—have come under intense scrutiny from U.S. and European policymakers for their policing of content on their platforms, TikTok has largely avoided such attention. (In a separate matter, TikTok came under fire from former President Donald Trump, who questioned the company’s ties to the Chinese government during his White House tenure.)

In some ways, this evasion is natural. The app, launched a mere five years ago, remains relatively young compared to its rivals. Its user base skews toward children, who are less likely to spread the kind of harmful content targeted by lawmakers. TikTok also played a relatively minimal role in many major domestic news events, such as Trump’s presidency and the Jan. 6 Capitol attack.

The Russia-Ukraine war, however, is ripe for TikTok. 

The app’s superior video platform, which forced Facebook and Instagram into developing a virtual clone for their services, has proven far more powerful than text in Eastern Europe. Footage of tank movements, civilian neighborhood shellings, and other acts of war posted on TikTok routinely draw huge audiences. The New York Times reported Saturday that TikTok videos with the hashtag #UkraineWar have garnered nearly 500 million views, far outpacing the company’s nearest competitor, Instagram.

Yet as multiple news organizations reported late last week, TikTok hasn’taggressivelyremoved false, manipulated, or propagandized content shaping this conflict. An example: a video posted two weeks ago that purported to show an explosion in Ukraine, but in fact used audio from the 2020 explosion in Beirut, garnered more than five million views on TikTok. (The Financial Times did report last month that TikTok has started building a larger content moderation army in Europe, swiping hundreds of employees from contractors performing similar work for other social media rivals.)

The Russian war puts TikTok in a tricky spot. 

As a Chinese company, ByteDance must stay in the good graces of President Xi Jinping’s administration, which took one of three company board seats and a 1% stake in ByteDance last year amid a broad government crackdown on tech companies’ power. While China hasn’t issued full-throated support of Russia’s invasion of Ukraine, its leaders certainly want to retain their northern neighbor as an ally against their Western foes. 

Yet TikTok could fall even more out of favor with U.S. and European regulators if it lets pro-Russian propaganda proliferate on its platform. Western governments haven’t yet mandated more content moderation, but they are inching closer to them as social media companies continue to fall short of their expectations.

“No platform is neutral,” Justin Sherman, a fellow at the international affairs think tank Atlantic Council, told The Washington Post. “When you have the Russian government launching a blatantly illegal war to take over Ukraine, spreading propaganda about why they’re doing it, there is literally no justification for pretending to be a neutral actor.”

Picking sides in a complex, life-or-death geopolitical crisis? That’s no fun at all.

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Jacob Carpenter

NEWSWORTHY

Nyet-flix. Streaming giant Netflix suspended services in Russia on Sunday, cutting ties in a country that it saw as a potential growth market before the federation’s invasion of Ukraine. The decision follows Netflix’s announcement last week that the company would defy a Russian law mandating that it carry 20 state-sponsored channels on its platform while operating in the country. Netflix, which warned investors earlier this year that it expects subscriber growth to slow in 2022, has about one million subscribers in Russia.

Super pumped for Q1. Uber raised its first-quarter outlook Monday as pandemic-hit ridership numbers rebounded faster than expected, CNBC reported. The ride-hailing company said it forecasts quarterly adjusted earnings before interest, taxes, depreciation, and amortization of $130 million to $150 million, up from earlier guidance of $100 million to $130 million. Uber shares jumped as much as 6% in early morning trading, but a broad market selloff later brought the stock price back to its opening mark.

A European excursion. Cryptocurrency exchange FTX announced plans Monday to expand into Europe after winning regulatory approvals that will let it operate across the continent, The Block reported. The Bahamas-based outfit, which will place its European headquarters in Switzerland, already ranks among the five largest crypto exchanges by volume. The company announced a fundraising round in January that brought its valuation to $32 billion.

Code breakers. Samsung disclosed Monday that hackers gained access to Galaxy smartphone operating source code and other confidential data, Bloomberg reported. The revelation came three days after a hacking collective known as LAPSUS$ posted a 190-gigabyte file on its Telegram channel purporting to contain internal records, including smartphone biometric authentication algorithms. Samsung officials said they do not believe the hackers obtained personal information of customers or employees.

FOOD FOR THOUGHT

Swooping right in? As American tech giants race to pull out of Russia, Chinese competitors sense an opportunity to fill that void. But as The Wall Street Journal reported Monday, Chinese outfits will face many logistical and financial challenges in any rush to expand north. Namely, Chinese companies could find it difficult to navigate broad U.S. and European sanctions that hurt Russia’s banking systems and punish some companies continuing to do business in the federation. 

From the article:

“It’s a huge opening,” said Tarun Pathak, an analyst at Counterpoint, but he cautioned that the companies face more hurdles to ramping up sales in Russia. “We see things getting a bit tough.”

Obstacles facing Chinese companies include logistical snarls in Russia, complications with payments from financial sanctions, and the risk of running afoul of the shifting and highly complex U.S. and allied export controls, even inadvertently.

“Chinese companies, like any other, don’t want to face unpaid invoices, major logistical challenges or be exposed even indirectly to sanctions or sanctioned entities or individuals, and that list is growing all the time,” said Duncan Clark, chairman of the investment-advisory firm BDA China.

IN CASE YOU MISSED IT

Russia’s denying that it’s about to cut itself off from the global Internet, but it’s acting a lot like it, by David Meyer

Ukraine digital army brews cyberattacks, intel and infowar, by Frank Bajak and The Associated Press

Grammarly app donating millions earned in Russia since Crimea invasion to support Ukraine effort, by Christiaan Hetzner

Reframe, an app to help you cut down on drinking, raises $12.5 million as alcohol intake continues to climb, by Jessica Mathews

Elon Musk’s brother and Tesla board member says he’s ‘violently opposed’ to cryptocurrency, by Mahnoor Kahn

Elon Musk launches war of words with Russia for blocking sales of space engines to U.S., by Andrew Marquardt

Toilet paper NFTs wipe out $7 million in medical debt, by Chris Morris

BEFORE YOU GO

Cupertino kicks off 2022. Apple fanatics will get their first look at the company’s next line of products Tuesday, and Bloomberg insider Mark Gurman has the inside track on what to expect. The Apple whisperer predicts the electronics giant will unveil a $199 iPhone SE model with 5G capabilities, a new iPad Air, and at least one Mac device featuring the company’s celebrated in-house chip. The event marks the start of a potentially busy year for Apple, which is expected to roll out an iPhone 14 product later this year.