May 15, 2021

Baptism of fire of TikTok and long-suffering Facebook

Baptism of fire of TikTok and long-suffering Facebook

Not a single popular social network did not manage in its biography without hassles with regulators. As soon as a platform for communication becomes interesting for advertisers and begins to bring shareholders a monthly income with 4-5 zeros, tax and security services pay attention to it.

The global pandemic and local cataclysms are notchange this trend. Therefore, the spring of 2021 began with India's litigation with Chinese TikTok and a statement from EU regulators about another leak of personal data of Facebook users.

ByteDance owes Indian tax authorities

The creator of TikTok is a Chinese developer andByteDance owner Zhang Yiming. He had a successful track record of attracting a large number of users to the platform in a minimum period of time. His first project, the smartphone news channel Tóutiáo, saw a record customer growth from 0 to 13 million from 2012 to 2014. Therefore, the promotion of TikTok (the international version of the Doyin in-China video-sharing app) began in 2017 on already well-rolled tracks.

The peculiarity of this network is the use of AI to determine the user's personal preferences based on the algorithm of his interaction with information and the formation of a personalized video content tape.

As of December 2020, the number of ByteDance clients exceeded 1 billion per month, and the company's capitalization reached $ 75 billion.

Naturally, such a tasty morsel could not be ignored by the regulatory authorities.

In February 2018TikTok was accused of illegally collecting personal data from children under the age of 14. Parental consent is required under US law. The company was forced to remove all videos filmed by minors and pay $ 5.7 million to the US Treasury.

But this was just a warm-up for the regulators.

According to official data by ByteDance, 43% of users in 2020 were from India. Such an explosive growth in the popularity of a mobile application in this country seriously worried the authorities.

In March 2021The Indian tax intelligence agency has ordered HSBC and Citibank to freeze the company's accounts on the pretext that its management plans to evade taxes. According to their calculations, the amount of fines in this case will be $ 11 million.

ByteDance tried to appeal this decision in court,claiming that the freezing of funds is harassment and carried out unlawfully. But the Mumbai High Court said the company would need to keep that amount locked up in a state-owned bank.

However, according to the materials of the court, at fourThe blocked ByteDance accounts in Mumbai were only $ 10 million. TikTok can use them to make a court-ordered deposit, but cannot use them for other purposes. In fact, the accounts remain frozen until the collateral is transferred in full to the state bank.

Indian regulators are confident that the company has hidden certain transactions and demanded excessive tax breaks.

Reference.

As of April 2021, TikTok India:

  • has a staff of 1335 people;
  • outsourced 800 specialists for content moderation;
  • serves about 145 million active users;
  • brings in declared advertising revenue of $ 95 million per month.

We will inform our readers how events will develop further.

Facebook phantom pains or personal data drain again?

The top privacy regulator in the EU said that on April 3, the personal data of 533 million Facebook users were published for free on a hacker resource on the dark web.

The information included:

  • phone numbers;
  • email addresses;
  • geolocation of users.

Databases of this kind are readily resold on the Internet. Advertising companies use them to target ads and send spam, while scammers use them to hack accounts and phishing attacks.

One way or another, but the purpose of stealing personal information is always the same - their further monetization.

This is not the first time that Facebook has been accused of mishandling or fraudulent user data:

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  1. In March 2018the company Cambridge Analytica, which is working on the election campaign of Donald Trump, illegally obtained data from 87 million social network accounts. Mark Zuckerberg then paid more than $ 5 billion in compensation to regulators.
  2. In May 2019, private materials of 50 million user accounts, who passed psychological tests in the myPersonality application, were freely available.
  3. In September 2019, the personal data of 400 million social network clients was leaked.
  4. In December 2019, Facebook “missed” the passwords of 267 million accounts of citizens of the US, Canada and the EU.

Regulators have lost count, and cannot determine exactly how much private information and when exactly Zuckerberg's service "lost".

Facebook is confident that the data is out of date and has already been published earlier, in 2019, even before the strict EU rules on the protection of personal information came into force.

However, this will not relieve the company of the need topay a $ 650 million fine to Illinois residents who won an April 8 lawsuit against the social network. A class action lawsuit alleged that Facebook used facial recognition tags to monetize in 2015, a flagrant violation of state privacy law.

Social media is gaining more and more influence andpower over its users. You have to pay for the pleasure of communicating, promoting your personal brand, and getting the latest news quickly. Private data becomes the equivalent of money.

We can only see the tip of a huge iceberg.How much personal information of users falls into the hands of third parties, no one knows for sure. And the fines imposed by regulators do not compensate for the most important thing - the devaluation of the law and privacy.

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