This doesn’t look great for TikTok, which is already under scrutiny in several regions.
Last month, TikTok began showing users in Europe, the UK and Switzerland new, in-app notifications informing them of the upcoming change to its data collection policies.
As you can see, within these new pop-up alerts, TikTok explained that, as of July 13th (i.e. tomorrow), it would look to use ‘legitimate interests’ as a legal basis for ad personalization, as opposed to seeking explicit user consent for utilizing personal data within its ad targeting process.
The difference here is significant – under EU law, the ‘legitimate interest’ provision comes under a different category to personalized data tracking, and avoids the need to ask users for explicit consent to use their personal info. That would essentially enable TikTok to continue serving personalized ads without having to ask for user permission, which is what the EU’s ePrivacy Directive is designed to facilitate, giving people more control over how their data is used.
The ‘legitimate interest’ provision is somewhat similar to ‘fair use’ within press coverage, with media outlets able to use certain content and references if it’s arguably within the public interest. Legitimate interest is the same, in that a company can argue that it’s within the interests of both the company and users that it utilizes such insights.
Targeted advertising is not what this provision was designed to cover, but TikTok was hoping to use the loophole to ensure optimal performance of its ads.
Indeed, in a statement on its decision to pause the update, pending an EU investigation, TikTok said that:
“We believe that personalized advertising provides the best in-app experience for our community and brings us in line with industry practices, and we look forward to engaging with stakeholders and addressing their concerns.”
Of course, TikTok knows full well that this was not what the ‘legitimate interest’ provision was designed for, and it was trying to sneak it in under the radar. Which makes some sense, in a certain reading of the law as it stands – but it’s not exactly a great way for the platform to endear itself to regulators, and ensure ongoing partnership within the sector.
As noted, amid TikTok’s ongoing rise, questions continue to swirl around the safety of the app, and how it uses people’s data, both in terms of targeted ads and, potentially, with respect to requests for info from the Chinese Government.
Last month, an FCC Commissioner in the US called on both Apple and Google to ban TikTok from their app stores, due to concerns that the app could be used as a surveillance tool, of sorts, by the Chinese Government. TikTok has since sought to reassure US users that their data is safe.
Also last month, TikTok was found to be failing in its duty to protect children from hidden advertising and inappropriate content, in breach of EU rules, another concern for the app in the European region.
This latest issue will not help to improve relations between the app and EU regulators, and could well spark a new round of scrutiny on its other business practices and impacts, which could again put its future in jeopardy.
It seems unlikely TikTok would be fully banned, given its rising presence and usage around the world. But as the CCP continues to bristle with various other governments, questions will remain – while issues and violations like this do nothing to help the app establish better working relationships with relevant authorities, who could decide on its ultimate fate.
It seems unlikely, but also not impossible. TikTok is the app of the moment, and the key place to be in many respects. But its future may still be questionable in a broader sense.
Elon Musk Sells of Tesla Stock in Preparation for Possible Twitter Deal
It seems that Elon Musk isn’t entirely confident that he’ll be able to pull out of his $44 billion Twitter takeover deal, with Musk reportedly selling almost $7 billion in Tesla stock in recent days in preparation for a transaction, if he is ordered to pay up.
As reported by The Wall Street Journal:
“Mr. Musk, Tesla’s chief executive and largest shareholder, sold around 7.9 million shares between Friday and Tuesday, the disclosures show, leaving him with a 15% stake in the company. The Tesla boss has been on a selling spree over the past year, during which he has cashed out roughly $32 billion worth of shares in the electric-vehicle maker.”
Musk has since confirmed the sell-off, explaining that:
In the (hopefully unlikely) event that Twitter forces this deal to close *and* some equity partners don’t come through, it is important to avoid an emergency sale of Tesla stock.
— Elon Musk (@elonmusk) August 10, 2022
The Musk/Twitter takeover is scheduled to be heard in the Delaware Court of Chancery in October, after Musk and his team sought to exit the deal based on Twitter’s inability to convince them that only 5% of its active users are fake/bot accounts.
In response, Twitter has outlined its ‘airtight’ case against Musk’s various claims, with the court scheduling an expedited trial based on Twitter’s counter evidence. Twitter’s counter filing has also suggested that this element is not a legal impediment to the closing of the deal, under its original terms.
That means that Musk’s takeover will come down to Musk’s legal team’s ability to convince the court that Twitter’s process of counting bots and fake accounts constitutes a material altering of the original terms of the proposal, which looks like it could be a difficult path to take.
Which is why Musk is now taking measures to prepare for a likely loss, which will eventually, probably, still see Musk become Tweeter in chief. Whether he wants to be or not.
Of course, you could also argue that this is due diligence, and that Musk is simply taking steps to ensure he’s covered, just in case he loses the case. Some have also suggested that Musk’s entire Twitter takeover bid has been an elaborate front in order to facilitate the sell off of Tesla stock options that were set to expire soon. These latest sell-offs could also play into that narrative, in enabling Musk to make even more money, without raising market concerns as he reduces his Tesla stake.
That’s super rich guy math, and I won’t even pretend to understand the complexities of how that might work – but it does seem like, at the least, Musk is slightly concerned that he’s not going to win his upcoming trial, and that he will indeed be forced to buy Twitter at his original agreed price.
Though Elon has also noted that he has a back-up plan, in case his Twitter deal falls through.
There’s nothing at X.com yet, but another Twitter user also shared this video clip in which Musk explained his plans for the website.
So Musk has a ‘pretty grand vision’ for what ‘X.com’, and ‘X Corporation’, could be, with Twitter helping to expedite that plan, whatever it is.
So even if Elon does lose his upcoming court case, he could still look to make bigger waves in the social media world – while it may also suggest that Twitter could become ‘X’ or something like it, in Elon’s broader plan.
Which kind of kills off this idea:
In any event, we’re now getting closer to a resolution one way or another, with the trial date looming, and Musk preparing for the next stage, whatever that may be.
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