FCC Commissioner on TikTok: ‘There are lots of reasons to be concerned’

FCC Commissioner Brendan Carr joins Yahoo Finance Live to discuss U.S. user data amid reports that China is accessing TikTok user data, banning TikTok from Apple and Google’s app stores by July 8, and the outlook for security concerns.

Video Transcript

- Welcome back. Brendan Carr, commissioner of the US Federal Communications Commission, has written to Apple and Google CEOs over what he calls the unacceptable national security risk that TikTok poses in the way it harvests and accesses data. Well, he joins me now, along with Yahoo Finance's Akiko Fujita. So Brendan, thank you for joining us. Now, this came about as a result of what you saw from Buzzfeed's investigation. Talk about the most compelling aspects of that that really led to this letter.

BRENDAN CARR: Well, you're right. For years now, I guess, TikTok in the US has been saying, don't worry, we store all US user data on servers here in the US. And what this BuzzFeed News report, really a blockbuster reporting, shows from leaked audio is that, according to the reports, everything is seen in China. So the question of where to store the data is a bit of a sleight of hand because it's being accessed by engineers with ByteDance in Beijing. And they're ultimately beholden to the CCP. And we know that they are in search of sucking up as much data as possible for whether it's business espionage or all sorts of potentially nefarious purposes.

AKIKO FUJITA: Yeah. Commissioner, what's the concern with that data being seen in China? What do you suspect is being done with it?

BRENDAN CARR: Yeah. A lot of people look at this and say, well, it's just funny videos. What sort of value is that in that? But what we see beneath the surface-- that's just the sheep's clothing-- is it's pulling biometric data, face recognition, voiceprint, search browsing history, keystroke patterns, location information. And we know is that the CCP, if it gets all this data, has all sorts of ends that it can achieve. It looks at, again, business industrial espionage, blackmail activity. So there's a lot of reasons to be concerned if this personal and sensitive data is ending up back in the hands of the CCP.

- And have we seen any examples of how it's actually being used in practice?

BRENDAN CARR: Yeah. We've seen a lot of concerning incidences. So for instance, the US military has already banned the use of TikTok on government devices. National security agencies have taken similar steps. The RNC and DNC have sent warnings. Schumer and Cotton got on a letter together. So there's broad based bipartisan concern about what can happen if the sensitive data falls into the hands of the CCP.

AKIKO FUJITA: Yeah. I mean, in many ways, it feels like this is a revival of that discussion that we had during the Trump administration. You have said specifically you want Apple and Google to remove TikTok from their app stores. Now, that's great. But you've got 80 million monthly active users who already have the app on their phone right now. I mean, data collection continues. Is this the first step towards an outright ban?

BRENDAN CARR: Yeah. This is a challenge, to the point that you said. And from my perspective, there's a lot of activity that's going on right now across the federal government that could look at this. But the reason I'm looking at Apple and Google in particular is while that broader national security review takes place, the Commerce Department, for instance, could take action there. We'll see.

I think right now, there's near-term action that Google and Apple can take almost separate from the national security, which is just look at how that data is being used. What are the representations? Is it being told that it's being stored here? Is it really being accessed by people in Beijing? And the abusive data practice-- again, it parallels the national security review, but it's somewhat separate. Just apply those terms of service.

And we've seen it before. When they've had applications that take data and surreptitiously move it to China or engage in unauthorized uses, they've taken steps to boot them from the App Store. So I think this is sort of parallel to that broader national security review. And I do hope that the Biden administration completes that Commerce Department review, which to your point, could go beyond just no longer allowing people to download it.

AKIKO FUJITA: Yeah. On that point, we have heard from TikTok say that they are in the process of migrating US user data to their Oracle servers. Now, your point has been that, well, they said they would do that before. That hasn't been completed yet. So it sounds like that migration alone isn't going to be enough to quiet those concerns you have. What more does the company need to do?

BRENDAN CARR: Yeah. Look, I've really lost a lot of faith and trust in TikTok because of the misrepresentations that they've made. They've long said we're storing it here. So I'm glad that they're moving it to Oracle, to US infrastructure. But they've said that the question is really where can it be accessed, not where it can be stored. And there's a lot of open questions that they still have to address on that front. That's what I'd be most interested in.

- And as you referenced, the number of lawmakers in that letter from both sides of the aisle raising concerns. Chuck Schumer, Marco Rubio, Adam Schiff, Ted Cruz, among others. If you don't get a satisfactory response to that July 8 deadline that you listed in your letter, what would the next steps look like?

BRENDAN CARR: Well, we don't necessarily have direct regulatory authority at the FCC, unlike what we do with Huawei, ZTE, and China Mobile, where we've taken action. So it's possible they could tell me to pound sand. But I'm not the only one that's interested in this. Again, I think Commerce is looking at it. The Congress is looking at it, as you noted. And so I think this is just one piece of a broader federal government effort that's bringing closer and I think much-deserved scrutiny to TikTok, its data practices, and the national security threat.

- Is there anything else that TikTok could do in terms of perhaps warnings or anything else to users that would be sufficient to really meet some of these challenges that you're seeing with national security risks?

BRENDAN CARR: It's going to be difficult. We looked at that with Huawei and ZTE. Are there disclosures? Are there ways to sort of cabin that devices off? And we've usually come to the conclusion that it's difficult to do. And so for Huawei and ZTE, we've said, you've got to get out entirely. In terms of these federal subsidy programs, China Mobile, China Telecom, we've taken similar actions. So I'm open minded if there's some sort of mitigation option out there. But it's going to be very difficult, particularly given the various apparent misrepresentations we've had so far about the actual scope and degree of people in China seeing US user data, personal sensitive data.

- Well, certainly those warning shots fired indeed. A big thank you there. Brendan Carr, the commissioner of the FCC, and Yahoo Finance's Akiko Fujita.