TikTok to join EU code of conduct against hate speech By Reuters


© Reuters. FILE PHOTO: TikTok logos are seen on smartphones in front of displayed ByteDance logo in this illustration

By Foo Yun Chee

BRUSSELS (Reuters) – Chinese video app TikTok, owned by Chinese company ByteDance, will be joining the European Union’s voluntary code of conduct to combat illegal hate speech online, the European Commission said on Tuesday.

Social media platforms have come under increasing pressure from politicians and governments to do more to tackle online hate speech and disinformation, which have been blamed for helping to fuel a wave of racist attacks in some countries.

The Commission set up the code of conduct in May 2016 where tech companies work with civil society organisations and public authorities to remove online hate speech.

Commission Vice President for values and transparency Vera Jourova said the new addition to a group, whose members include Facebook (O:), Microsoft (O:), Twitter (N:), Google’s (O:) YouTube and Snapchat, was a positive step.

“It’s good that TikTok joined the code – a company favoured by young users who are particularly vulnerable to online abuse and illegal hate speech,” she said in a statement.

“Of course, I expect TikTok to adhere not only to the Code’s principles, but also fully respect European law when operating on European soil,” Jourova said.

“Our ultimate goal is to eliminate hate on TikTok. We recognise that this may seem an insurmountable challenge as the world is increasingly polarised, but we believe that this shouldn’t stop us from trying,” TikTok’s head of trust and safety for EMEA Cormac Keenan said in a statement.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





Original source link

ByteDance to hand out cash bonuses to staff amid U.S. pressure on TikTok By Reuters


© Reuters. FILE PHOTO: FILE PHOTO: Tik Tok logos are seen on smartphones in front of displayed ByteDance logo in this illustration

By Yingzhi Yang and Brenda Goh

BEIJING/SHANGHAI (Reuters) – TikTok owner ByteDance said on Tuesday it would hand out cash bonuses to employees working to help it “overcome challenges posed by the COVID-19 pandemic and changing macro environment”.

Full-time employees who have worked for 26 or more working days between July to August will be given a bonus worth half their August base salary, according to a letter from ByteDance to its employees that was seen by Reuters.

“Thank you for your hard work and dedication,” the letter says. ByteDance has said it has over 60,000 employees globally.

The bonus could run into hundreds of millions of yuan, based on ByteDance’s hiring advertisements and company sources.

ByteDance confirmed the letter but did not provide details.

ByteDance has come under global scrutiny amid concerns about TikTok’s collection of personal data and censoring of political content. The United States has said it will ban the short video app unless ByteDance sells the app’s U.S. operations amid rising tensions between Washington and Beijing.

ByteDance has said the Chinese government does not have any jurisdiction over TikTok content.

TikTok has also faced challenges in India, where it was among dozens of Chinese apps banned in June following a border clash between the countries.

“The TikTok team and especially the deal team have been working day in and day out,” a company source said, adding staff morale at TikTok had been hit by the global challenges as well as the departure of its CEO Kevin Mayer who quit after just three months.

ByteDance founder and CEO, Zhang Yiming, said in an earlier letter that the staff had been working “endless hours” amid the surrounding “noise”.

ByteDance’s cash bonuses, which come as many companies face financial pressure due to COVID-19 and a slowing economy, was on Tuesday among the most discussed topics on Maimai, China’s version of LinkedIn (NYSE:).

Late last year, Chinese telecoms giant Huawei [HWT.UL] also said it would hand out 2 billion yuan ($293 million) in cash rewards to staff as a mark of recognition for work in the face of a U.S. trade blacklisting.

($1 = 6.8357 )

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





Original source link

TikTok troubles narrow gap between Beijing and ByteDance founder Zhang Yiming By Reuters


3/3
© Reuters. FILE PHOTO: Tik Tok logos are seen on smartphones in front of displayed ByteDance logo in this illustration

2/3

By Yingzhi Yang, Yew Lun Tian and Julie Zhu

BEIJING/HONG KONG (Reuters) – ByteDance founder Zhang Yiming has long positioned himself as a global internet entrepreneur, largely eschewing Chinese government involvement, but U.S. demands to sell his crown jewel TikTok are testing the boundaries with Beijing.

A year ago, ByteDance was approached by the Chinese government with offers of help when TikTok, a short-video app with a huge following among young people globally, faced political heat in India, a source familiar with the situation told Reuters. But the company sent only mid-level staff to meet with government officials, signalling that the company wanted to go it alone.

The 38-year-old Zhang, who has trodden a different path to other high-profile Chinese tech tycoons, shifted tack in August when President Donald Trump threatened to ban TikTok in the United States unless it was sold to a U.S. firm.

Zhang’s team sought a meeting on his behalf with China’s ambassador in Washington, Cui Tiankai, two sources familiar with the matter said.

While Zhang was only hoping for an informal chat with Cui to seek advice, his approach was seen as a turning point, government and industry sources told Reuters.

The embassy directed the ByteDance team to the foreign ministry in Beijing. Although no further talks took place, and Cui and Zhang did not speak, the Chinese government interpreted the approach as a signal that ByteDance was open to assistance.

China entered the fray on August 28, by revising a tech export control list that experts said would give them regulatory oversight over any TikTok deal. Reuters could not determine if Beijing’s interpretation of Zhang’s approach and the Chinese government move were linked.

One of the sources said that by standing up for ByteDance, Beijing wanted to demonstrate to private companies caught in the crossfire of China-U.S. strategic competition that the country is firmly behind them.

“We want to show all other countries that this is what the Chinese government will do if you bully any of our companies, so don’t follow what the U.S. is doing,” the source said.

The diplomatic dance taking place around TikTok follows years of acrimony between Washington and Beijing over the role of China’s Huawei Technologies [HWT.UL], which the U.S. has alleged is effectively a Trojan horse for Chinese espionage.

Huawei and Beijing have repeatedly denied any such activity.

Asked about its engagement with ByteDance, a Chinese foreign ministry spokesman said he was not aware of the specifics of the situation, adding that the United States was over-generalising the concept of national security and abusing its power.

“Not only does it go against market principles and international rules, it is a mockery to the principles of market economy and fair competition that the U.S. prides itself on,” he added.

A senior U.S. administration official said China had blocked U.S. tech companies such as Facebook (NASDAQ:) and Twitter for years and the United States’ actions were designed to protect the private information of its citizens.

“We’re just very concerned that, essentially, anything that could be done on that platform would be subject to the Chinese Communist Party’s algorithmic attempts to control human behavior worldwide.”

The Chinese embassy in Washington did not immediately respond to a request for comment. ByteDance declined to comment.

TikTok has said it would not comply with any request to share user data with the Chinese authorities.

‘POLITICAL FOOTBALL’

China had originally considered speeding up the launch of an “entity list” to punish foreign companies, groups and individuals deemed harmful to its interests, a government source with direct knowledge of the matter said.

But this was dropped as a countermeasure to the Trump administration’s move to ban transactions with ByteDance and Tencent’s (HK:) WeChat because it would have escalated tensions and was replaced instead by the rules published last week.

Zhang did not know of the tech export rule revisions ahead of time, two sources told Reuters, and the company’s view is that it ultimately prefers to be free to make its own decisions, according to one of the sources. Others close to the TikTok sale talks say the move threw a spanner in the works of already-complicated negotiations and could scupper any deal.

China’s commerce ministry, which published revisions to the tech export control list, did not respond to a request for comment. 

ByteDance is negotiating with a Microsoft-Walmart (N:) (O:) coalition, and a competing investor consortium led by software firm Oracle (N:), on a sale of TikTok that could be worth as much as $30 billion.

ByteDance is still keen not to become a “political football” and prefers to use legal means rather than rely on government backing to resolve the issue, the source said. The company is suing to block one of Trump’s orders.

“I doubt having the government speak up for this company can do much in helping it gain market access into another country,” said Chu Yin, a Chinese scholar with the Center for China and Globalization, a Beijing-based think-tank.

“ByteDance might fare better if it can share some interests with its competitors in the U.S.,” he added.

A DIFFERENT PATH

Zhang has pursued a different path to Chinese internet entrepreneurs such as Alibaba (N:) founder Jack Ma, who is a Communist Party member, and Tencent’s Pony Ma and Baidu’s (O:) founder and chief executive Robin Li, who are both members of the Chinese People’s Political Consultative Conference (CPPCC), a ceremonial advisory body.

Zhang, who is not a member of either, has focussed on global growth even as his counterparts have retrenched from overseas and opted to focus on domestic markets.

This year he appointed new heads for the China operations to personally take up more responsibility over ByteDance’s international business and also began moving key research capabilities and decision-making functions abroad. In March, he said in an open letter that he spent two-thirds of 2019 overseas.

He has personally sought advice from around ten people at U.S. think-tanks and former U.S. government officials recently, a source familiar with the situation said.

Zhang has also taken numerous steps to assuage U.S. concerns that TikTok could be endangering Americans by collecting personal data and censoring political content.

He hired former Disney exec Kevin Mayer as TikTok CEO, moved TikTok content moderation work outside China and established a “transparency center” in the U.S. to give outsiders access to observe TikTok’s data security practices and policies.





Original source link

TikTok, WeChat highlight broader high-tech antitrust issues



Isopix/Zuma Press

President Donald Trump’s decision to ban individuals and businesses under U.S. jurisdiction from doing business with TikTok and WeChat is hardly provocative. However, it casts a light on an emerging antitrust problem—the privatization and manipulation of the public square by technology companies.

China’s Great Firewall blocks Facebook
FB,
+0.15%
,
Twitter
TWTR,
+1.68%

and similar U.S. services. This has permitted ByteDance, Tencent
700,
-1.85%

TCEHY,
-1.11%

and others to develop social media platforms such as TikTok and WeChat and other internet businesses in a large protected domestic market and compete in the United States and elsewhere.

WeChat is a platform for messaging, marketing, shopping and payments more comprehensive than anything we have here. Hence, the ban will limit the ability of Chinese in the United States to communicate with family at home and elsewhere, and U.S. companies like Walmart and Starbucks may have to place greater emphasis on other vehicles to market in China.

Instead of complaining these restrictions illustrate U.S. efforts to stifle Chinese high tech, President Xi Jinping should be thankful his innovators benefited from a protected market to develop businesses like Alipay and Alibaba
BABA,
+1.70%
.

The U.S. regulatory and antitrust focus on Big Tech has centered on how Amazon
AMZN,
+0.05%
,
Facebook, Google
GOOGL,
+0.67%

and others gather information about our behavior to sell ads and market ideas. And the advantages their dominant platforms potentially afford over present and potential rivals.

Amazon, for example, learns from the activities of businesses selling on Prime to develop competing products. In businesses like disposable diapers, it has been accused of predatory pricing and muscling collaboration with smaller businesses to obtain critical competitive information.

We need to be careful. While Amazon had its beginnings in the direct sale of books printed by big publishing houses, it has created a remarkable self- publishing platform through Kindle that permits authors to bypass the cultural screening of those publishers.

App developers can effectively market to iPhone users only through its App Store. Apple skims an eye popping 30% of initial sales but accounts for only 13% of global smartphone sales. Apple and Google’s Android create preferences for their own or third-party products over others.

These practices may warrant regulation to promote competition and innovation. However, without these companies, we would still be texting and surfing on narrow screens on flip phones and Blackberries. Without Amazon, the development of cloud services would have been left to slower-moving legacy techs like Microsoft
MSFT,
+1.02%

and IBM
IBM,
+0.33%
.

The Trump administration’s principal concern with TikTok is the vast amount of data it possesses about American users that the Chinese government could exploit to blackmail Americans or to spread propaganda.

TikTok’s primary servers are in Virginia with backups in Singapore—theoretically beyond the reach of Beijing. However, updates and algorithms that determine what users see and is censored are developed in China. Anonymized information is plenty good enough for Beijing to manipulate what U.S. users view about Beijing’s treatment of Muslims, policies in Tibet, the crackdown on Hong Kong or an American presidential election.

Our tech companies and other businesses are under intense pressure from the organized left—directly through boycotts like those afflicting Facebook and the Washington NFL franchise—and indirectly from investment banks and major corporations that now set themselves up as arbiters of acceptable free speech and political correctness—to screen, limit and censor what we see, the language we use and generally how we do business.

The Chinese government has long done similar things through WeChat. Communications between American users and China and the rest of the world are filtered, and Beijing pushes its propaganda on the app.

Big Tech is broadly accused of an anticonservative bias. In an era where individuals and organizations express their ideas, discontent and praise online, free speech and access to all sides of an issue are perceived threatened on platforms like Twitter and Facebook.

The Constitution protects freedom of speech from governments, not private censorship but those platforms and others have become the public square equivalent of an essential facility in antitrust law—when a monopolist controls choke points in commerce, like a rail crossing, it is often compelled to share access on fair terms.

Just as the United States should fence out TikTok, WeChat and others to protect Americans from Chinese censorship and subversion, the Justice Department, FTC and European antitrust authorities should be coming down on big tech for using their monopoly power to abridge freedom of speech.

Peter Morici is an economist and emeritus business professor at the University of Maryland.



Original source link

Walmart’s Looming TikTok Mistake (NYSE:WMT)


NEW YORK (August 28th) – Walmart (WMT) should abandon any plans to pursue a bid to purchase TikTok in partnership with Microsoft (NASDAQ:MSFT).

As with many things from the Middle Kingdom under its communist rule, not everything is as it appears. Indeed, selling off TikTok’s US operations may be a feint by the company that operates TikTok as well as the Chinese sister version of the app, Douyin (抖音 dǒ uyīn). The latter has superior technology and is far better positioned for e-commerce than TikTok.

BACKGROUND

Walmart announced earlier this week that it was planning to join Microsoft in the purchase of Internet media video streamer TikTok. The announcement, which passed the ticker on August 27th, has boosted Walmart shares 7.7% from the close August 26th to today’s close.

Conventional wisdom is that TikTok will be valuable to Walmart in much the same way that the Home Shopping Network was expected to boost retail sales back in the 1980s and the way that Facebook and Twitter allowed click-thru ads to retailers’ shopping sites in the social media era.

Moreover, Walmart hopes to buy into an internet video streamer that will allow it to access a millennial and higher income demographic who make up the majority of TikTok users, as illustrated here:

But as every follower of social media knows, “the next big thing” in social media can often be right around the corner. Popular social media platforms can be subsumed by better coding or simply because they fall out of fashion. (MySpace, anyone?)

And that may be the problem with buying into TikTok as an e-commerce platform.

It is already obsolete.

THE BETTER BROTHER

In China, TikTok is known as Douyin (抖音 dǒ uyīn). The parent company, ByteDance (BDNCE), runs both platforms. But the platforms are not identical. As discussed here,

“Though it remains broadly similar to TikTok, Douyin has become more advanced than its global counterpart, particularly with respect to ecommerce. With three taps on Douyin, you can buy a product featured in a video; you can book a stay at a hotel after watching a video shot there; you can take virtual tours of a city’s stores and restaurants, get coupons for those establishments, and later post geo-tagged video reviews.”

As you can see from this Twitter post, Douyin can also highlight a user’s face to see all the videos in the user’s library or zoom in on a product the user has featured in a video and buy it directly off the Douyin app.

Clearly, this is a far superior e-commerce platform than TikTok.

Investing in obsolete or obsolescent technology is never a good idea. Ask those who bought into buggy whip makers. Or Yahoo.

One can easily imagine ByteDance doing an end-around the Walmart-TikTok purchase by entering into an exclusive license agreement for its Douyin platform with Amazon (NASDAQ:AMZN), Target (NYSE:TGT), or some other large competitor, or even Walmart (for more money, of course.)

In any event, we think the business model of a retailer owning TikTok or Douyin is probably a mistake. A better model would be ownership (or an exclusive license) by a multinational media company that can earn royalties on each sale made through the platform. Controversial talk radio host Rush Limbaugh is widely rumored to have used a similar model when he syndicated his program in the 1980s. For the United States market, there are still the security concerns that were associated with TikTok.

The Trump administration’s concerns about ByteDance security are clear and more than reasonable. Like many tech companies in CCP-ruled China, including American companies, ByteDance is obsequious to CCP demands. Writing in the Lawfare blog, Jordan Schneider, China expert, said of TikTok:

“…China’s national intelligence law, according to one interpretation, gives total authority to the government to compel firms — and with no independent judiciary, even extralegal pressure is very hard to resist. CCP regulators can take massive bites out of market capitalization at will, and have in the past thrown ByteDance senior leadership in jail on corruption charges. This makes keeping officials at home happy ByteDance’s first priority, regardless of reputational risks abroad.”

Were Douyin to enter the US market, these security concerns would have to be addressed anew, as with TikTok with, perhaps, another sale of ByteDance US operations. But – as of now – what’s to stop ByteDance doing some “one-upmanship” against the Walmart purchase?

CONCLUSION

A Walmart purchase of TikTok is a bad idea. Share appreciation over the last two days built upon the supposition that Walmart will follow through with the deal are illusory. We think Walmart will eventually abandon the notion once it has completed its due diligence and we expect the share price appreciation attributable to those suppositions will recede.

______________________________________________

NOTE: Our commentaries most often tend to be event-driven. They are mostly written from a public policy, economic, or political/geopolitical perspective. Some are written from a management consulting perspective for companies that we believe to be under-performing and include strategies that we would recommend were the companies our clients. Others discuss new management strategies we believe will fail. This approach lends special value to contrarian investors to uncover potential opportunities in companies that are otherwise in a downturn. (Opinions with respect to such companies here, however, assume the company will not change). If you like our perspective, please consider following us by clicking the “Follow” link above.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: The views expressed, including the outcome of future events, are the opinions of the firm and its management only as of today, August 28, 2020, and will not be revised for events after this document was submitted to Seeking Alpha editors for publication. Statements herein do not represent, and should not be considered to be, investment advice. You should not use this article for that purpose. This article includes forward looking statements as to future events that may or may not develop as the writer opines. Before making any investment decision you should consult your own investment, business, legal, tax, and financial advisers. We associate with principals of Technometrica on survey work in some elements of our business.





Original source link