Rough Times for TikTok: Chinese Giant to Splurge $500m on EU Data Centre

Written by | Friday, August 7th, 2020

TikTok, the embattled video-sharing app, has announced it would set up its new hub in Europe – its first data center on the continent – by 2022 that will house European user details, in effort to allay fears over data protection. TikTok, owned by Beijing-based ByteDance Ltd., that’s found itself at the center of Washington-Beijing tensions, has been accused by the Trump administration of gathering US user data and thus posing a national security threat. Also TikTok’s efforts to dominate the Indian market had earlier hit a major roadblock after the Indian government last month bannws TikTok and other well-known Chinese apps, including messaging platform WeChat and mobile browser UC Browser, saying they pose a “threat to sovereignty and integrity.”
The company’s first data center in Europe with be set up with a 420 million euros investment in Ireland. Promising to create hundreds of jobs, ByteDance said the facility would improve “the safeguarding and protection of TikTok user data” and shorten loading times for users in Europe. Once it goes online, European user data will be stored at that location, TikTok said. The outfit established its EMEA Trust and Safety Hub in Dublin earlier in the year and said the new investment “signals our long-term commitment to Ireland.” This move follows a sustained effort of ByteDance, the world’s most valuable startup, to distance its domestic Chinese operations from TikTok in order to appease overseas regulators. By expanding its operations within EU borders, TikTok seeks to portray itself a responsible internet citizen and a trustworthy service provider.
ByteDance has been accused by U.S. legislators and the Trump administration of hoovering up user data and thus creating a national security risk, and it is currently facing a six-week deadline to conclude a deal with Microsoft Corp. or another American company for the sale of its U.S. operations. It presently stores international user data on servers in the U.S. and Singapore. The ban by the Indian government followed a border clash between Indian and Chinese troops earlier in July that left at least 20 Indian soldiers dead. TikTok has a lot to lose in the world’s second most populous country. India has been the biggest driver of new TikTok downloads, reportedly generating close to 660 million installs since its launch in 2017.

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