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TikTok’s India ban should be a warning for tech companies – Financial Times


TikTok creators in India are still mourning the sudden closure of the service in the country last year as tensions between New Delhi and Beijing flared.

After the viral social media app was shut down in June on security grounds when India and China clashed on a remote Himalayan border, the creators lost millions of followers overnight.

“I pray every single day for TikTok to come back. How can a small app manage to piss off the entire country?” asked one 29-year-old former TikTok star in India who had 1.5m followers. Along with other creators, he has since shifted to Instagram and YouTube Shorts, TikTok’s western competitors, as hope dwindles that the India ban on the service will be lifted.

For months, TikTok, owned by China’s ByteDance, waited for clarity from New Delhi. Despite answering its questions on security, people close to the company said the government had not given any indication on when it may be restored. By January, the company announced it was making big cuts to its 2,000 staff in India.

Then the tax man came knocking, launching a tax-evasion probe into the company and freezing its bank accounts in the country. ByteDance has denied the tax-evasion claims.

TikTok had once claimed India as a great success story. With more than 200m people on its platform, the country was its biggest market outside China and proof that a Chinese company could go global and challenge Big Tech in new markets.

In stark contrast to its Silicon Valley peers who pushed back against India’s requests for data localisation and decryption, TikTok had played by the book. When New Delhi asked, TikTok jumped. Move servers to India? No problem. Take down content the government deemed offensive? Easy.

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But when it came to nationalist politics, TikTok found that no amount of goodwill could get it back into New Delhi’s good graces. In the wake of the border clash, Narendra Modi’s government launched a “digital surgical strike” on TikTok, banning it and more than 200 other apps.

New Delhi may not have won the border skirmish, but in the words of a top rightwing television host, the ban showed that “New India” is “ready to fight the economic battle”.

Regulatory uncertainty is no stranger to companies working in India. Convoluted regulations designed to tilt the playing board in favour of local players have been the bane of ecommerce companies Amazon and Walmart-owned Flipkart.

But tech, in particular, has aggravated New Delhi, which feels that the foreign companies that dominate the social media landscape violate its sovereignty. Along with the ban on Chinese apps, India’s new digital rules are an attempt to win back control. Passed through an executive order, the rules have given the government extraordinary powers to control the digital sphere.

Messaging platforms such as WhatsApp and Signal are now obliged to break encryption, while others are required to take down content upon request within 36 hours. New Delhi has the power to control what is streamed on platforms including Netflix and published as news online.

Legal experts say the deliberately vague wording of the rules gives the government greater leverage to put pressure on Big Tech to abandon its commitment to privacy and free speech to stay in India. Non-governmental organisations warn the rules are part of a push towards “digital authoritarianism”.

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“Officials understand India is a large digital market for the world and use this to implement certain conditions that permit a high degree of control,” said Apar Gupta of the Internet Freedom Foundation. “It has a chilling effect on free expression.”

One tactic companies have chosen to navigate the stormy regulatory waters is by forming an alliance with a powerful tycoon.

Facebook sunk billions into Mukesh Ambani’s digital platforms company Jio, while Flipkart last week announced a tie-up with infrastructure mogul Gautam Adani.

One lawyer said an option for TikTok to resume service in India was for it to find a champion. But its branding as an “anti-national” platform has scared potential suitors away.

While rivals may be pleased, TikTok’s case should serve as a cautionary tale of the powerful nationalist forces driving India to seek greater control of the internet. Playing by the book is no sure defence. Seeking the protection of a partner might be a better bet.

stephanie.findlay@ft.com



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