How the war against TikTok could create collateral damage, stunting Shein, Temu, and even Apple

• TikTok has become a main character in the US-China tech war.
• US politicians from both parties are looking for ways to ban the app or curtail its influence.
• But attacks on TikTok are a distraction from the bigger task of safeguarding data for all Americans.

When the US last month spotted a Chinese surveillance balloon hovering about 66,000 feet over Billings, Montana, politicians and pundits alike used the opportunity to call out another China boogeyman: TikTok.

"A big Chinese balloon in the sky and millions of Chinese TikTok balloons on our phones. Let's shut them all down," Republican Sen. Mitt Romney of Utah tweeted.

House Foreign Affairs Committee Chair Michael McCaul similarly likened TikTok to a spy balloon that sends sensitive data to the "mothership in Beijing" when he introduced in February a bill that would require the White House to ban TikTok or any app that may be subject to the influence of China.

A few years after its arrival in the US, TikTok has become a main character in the US-China tech war. The short-video app is a common talking point for US politicians in both parties looking to stake a position on China.

But the TikTok-focused attacks are also sparking policy proposals that could have serious consequences for companies caught up in the ongoing competition between the US and China, policy experts told Insider. Draft bills to ban TikTok — like McCaul's DATA Act and a more recent bill from Sens. Mark Warner and John Thune — tend to be written broadly in a manner that could end up shutting out a wide array of foreign-owned tech companies, such as fast-growing e-commerce apps Shein and Temu.

The proposed bills in Congress could even affect some American companies with business functions in China, said Jenna Leventoff, a senior policy counsel at the ACLU, who coauthored a letter opposing McCaul's bill.

"This could apply to other large companies, like possibly Apple," Leventoff told Insider. "Apple has a lot of its technology made in China. The President or future administration could block Americans from doing business or using apps from a number of entities in China."

Apple works closely with Taiwanese manufacturer Foxconn in China to make iPhones and other products in the city of Zhengzhou, though the company has recently been looking to move some production out of the country, The Wall Street Journal reported.

China could also retaliate against US companies in tech or other sectors should the US go after one of its rising stars.

"The US habitually politicizes technology and trade issues and uses them as a tool and weapon in the name of national security," a spokesperson for the Chinese Foreign Ministry said on March 6. "Such practice violates the principles of market economy and fair competition. China will closely follow relevant developments."

An alternative path for lawmakers looking to protect Americans from foreign-owned apps would be to enact stricter data privacy laws for all companies operating in the US, experts told Insider. But US tech companies that rely on data collection for advertising sales or other business practices have fought to curb such regulations.

"The US is way behind most other industrialized nations in terms of creating sweeping data privacy regulation," said Aram Sinnreich, a communications professor at American University and coauthor of the forthcoming book "The Secret Life of Data."

"A lot of that is because of the countless millions of dollars that get spent by big tech firms like Amazon and Meta and Google lobbying the US government to allow those businesses to continue their data-extractive business models," he said.

Why TikTok has become the center of anti-China rhetoric

TikTok is a particularly effective scapegoat in Washington's anti-China rhetoric because it evokes an emotional response for many Americans. The app is integrated into many aspects of US culture, particularly for young people, sparking fears that China could wield it to influence the next generation of Americans.

"TikTok is a news-and-views type of site shaping opinions and helping others shape opinions," said Leland Miller, the CEO of the economic-research firm China Beige Book. "Nothing is bigger than TikTok and more important for a young cohort than TikTok is."

Outside of its cultural influence, officials are worried that TikTok's Beijing-based parent ByteDance could be compelled to give the Chinese Communist Party access to US user data via its National Intelligence Law.

TikTok has hurt its own cause when it comes to its reputation around data privacy. For example, the company misrepresented how US user data was managed and then its parent company monitored the locations of reporters who exposed its practices.

But it is also scrutinized more closely than other apps with China-based owners.

Temu and Shein, for example, have shot up to the top of the Apple App Store this year, grabbing top 10 spots in Apple's ranking in recent weeks. Both platforms, like TikTok, collect data, such as a user's name, phone number, IP address, and geolocation, from US customers as part of their day-to-day operations.

Yet, DC politicians haven't sounded the alarm about user data protections for either app, or spoken about how a TikTok ban could impact them.

Stronger privacy laws are a way out, but could face pushback from Big Tech

Lawmakers could protect American users and avoid outright bans of foreign-owned apps by enacting stricter data privacy laws at home, experts and policy advocates told Insider.

"It's a national embarrassment that we don't have a basic data privacy law in the United States," said Evan Greer, director at the tech activism organization Fight For The Future, which launched a petition opposing a TikTok ban. "Every day that lawmakers waste hand wringing about TikTok is another day that we don't have a national privacy law in the United States."

Some officials, including Sens. Ron Wyden and Jon Ossoff, have acknowledged that legislation focused on TikTok is a distraction from the larger issue of safeguarding Americans' data across all apps. 

Still, efforts by members of Congress to pass federal legislation around data privacy, such as the American Data Privacy and Protection Act, have faced an uphill battle.

Cutting off access to certain user data-tracking tools has been harmful to the businesses of US tech platforms in the past. Apple's 2021 user privacy changes stunted ad revenue at Facebook and Snapchat-maker Snap, for example.

But blocking companies from gathering private information from users could also be a more effective path to protecting Americans while maintaining an avenue for Chinese companies to participate in the global economy.

"We need to continue pursuing more secure technical standards and encryption," said Milton Mueller, program director of the Masters of Science in Cybersecurity Policy program at the Georgia Institute of Technology and coauthor of an Internet Governance Project report on TikTok and national security. "That kind of security is something that I think both gives the users of the internet control without undermining the basic functioning of the internet and the globalization of the internet."