At the heart of the Chinese app ban lies a problem with the way we build applications. Only by developing systems which hand control of data back to users can we curb the growing concerns around data sovereignty.
On June 15, 20 Indian soldiers and an undisclosed number of Chinese soldiers were killed in hand-to-hand combat in the contested Galwan Valley region between the two countries. The first loss of life along the border in 45 years, the clash constituted a major escalation in China-India relations.
In the ensuing diplomatic brawl, New Delhi has banned 59 Chinese apps, removing them from the Indian iOS and Google app stores, and mandating internet service providers to start blocking access to the apps. However, Indian authorities have denied the move is merely retaliation. Instead, they say they were responding to citizen concerns of “security of data and breach of privacy.”
The app losing the most users to the ban is TikTok, which has more than 200 million active users in India and 30.3% of its total downloads worldwide. When TikTok was temporarily blocked in the country for a week last year over child pornography concerns, the app was still accessible to users who already had it installed on their phones. Still, the company disclosed at the time that it was losing more than US$500,000 a day.
Now with all of its users in India unable to access the app, we can imagine the loss must be overwhelming. The app’s developers ByteDance have not shared details on the economic damage the ban is doing to the company, but the Chinese publication Caixin has said that sources close to the company’s senior management put the figure at US$6 billion, more than the combined loses of the other 58 apps.
The power of data
At first glance, the ban may seem to be a straightforward political tit for tat, but it points to a genuine concern that has come into the limelight over the past two years, that is of personal data being held and used in countries that people do not trust. At the heart of distrust towards Chinese tech companies is China’s 2017 national intelligence law which requires companies to comply with intelligence-gathering operations if asked. There are no statistics available of the extent to which this law is used, but it nonetheless puts China-based companies in an awkward position that many many people worldwide feel uncomfortable with.
ByteDance insists that its users outside of China have their data stored on servers in the US, with backup redundancy in Singapore, and an American audit has confirmed so. ByteDance also insists that none of its users outside of China are subject to Chinese law, but an ongoing lawsuit and snooping bugs leave doubt in the air for many.
It seems like the hole ByteDance is stuck in keeps deepening despite its best intentions. The company was keen to be compliant with proposed data sovereignty laws in India, for which it was planning to build a data centre in the country and invest US$1 billion over the next three years. However, it has proved extremely difficult for it to sever the associations that many make between the company and China.
Past the anxieties of data storage lies another obstacle for ByteDance – concerns over how user data is used. Data is both valuable and powerful, and people are concerned about how their reluctantly given up data is being given away for free to bolster monopolies.
But it’s not our personal data per se that is valuable; it’s our behavioural data. Platforms argue that using behavioural data to produce targeted advertising and improve content algorithms is just their much-deserved monetising of their products. Still, the data monopolies that companies like Facebook in the US and Tencent in China have amounted give them an unfair advantage and make it hard for new startups to make a breakthrough.
Furthermore, by offering us great products and developing emerging technologies like artificial intelligence from their profits, the tech giants win over many. Numerous technologies, including driverless cars, voice assistants, and even breakthroughs in healthcare, are driven by the profits tech giants make from our data.
Guilty by association
For some companies, there lies another hurdle. With growing public knowledge and concern over privacy and data ownership, it will become ever more difficult for companies to go global if their home countries are not trusted, no matter how much money is thrown at branding.
In China, tech companies have it especially tough on the world stage. Reconciling Chinese tech with the country’s political system has long been a point of contention. In 2020, a fresh set of tensions, including the passing of the Hong Kong national security law, the ensuing China-US trade war, and China-Australia spying allegations keep Chinese tech in an awkward position where even routing data through the country can cause outrage.
And the issue is not just China’s. The EU’s push to curb reliance on American tech shows that even close political ties cannot entirely quell anxieties of other powers holding too much data. Technonationalism is on track to proliferate.
Can regulation save the industry?
Steps such as working with the American law firm K&L Gates on moderation policies and exiting Hong Kong are meaningful measures for building trust but are not enough – Chinese companies will always be caught in politics as long as China is a rising power. Recently, the US began a national security review of TikTok, and the British government suggested that it will be reversing its decision to allow Huawei to build part of its 5G network, both citing distrust with Beijing. National security will always trump all.
Addressing the app ban, Indian authorities affirmed that “the compilation of these data, its mining and profiling” are core to their concerns. If companies wish to mitigate future bans, the solution must be data ownership. If data is stored with users who do not need to hand it over to companies to access services, power is distributed, and we can largely depoliticise technology and help curb the rise of technonationalism. To wait on data ownership regulation would pose an additional risk; as long as companies do not take proactive change, we are gambling with the unknown.