On Jan. 22, TikTok announced the creation of TikTok USDS Joint Venture LLC, a majority U.S.-owned entity formed in response to an executive order signed by President Trump last fall. A stated goal of this new corporate structure is to ensure that U.S. user data is not accessible to non-U.S. entities.
TikTok has outlined four priority areas for its new U.S.-based entity: trust and safety, data protection, algorithm security and software assurance. TikTok investor/partner Oracle will play a significant role in supporting these efforts, including infrastructure support, transparency measures and third-party audits.
Despite these assurances, the announcement sparked immediate backlash due to updates in TikTok’s privacy policy.
Why are some U.S. TikTok users concerned about its privacy policy?
Much of the criticism stems from fine print in the updated privacy policy for the U.S.-based TikTok app that allows TikTok to access users’ precise location — if users allow device location services — without offering an explicit opt-out option. (In other words, for now, the only way to disallow sharing of precise location with TikTok is by proactively turning off device location services for the app via device settings.) While TikTok has stated that opt-out functionality is coming, users are understandably frustrated that it is not currently available.
Also, under its updated policy, TikTok says it may “process” highly granular personal data related to “racial or ethnic origin, national origin, religious beliefs, mental or physical health diagnosis, sexual life or sexual orientation, status as transgender or nonbinary, citizenship or immigration status, or financial information,” as TechCrunch and other outlets have reported.
Another concern is how broadly TikTok defines the purposes for using and storing information. Its policy states that data will be used and stored “in accordance with applicable law,” but offers little clarity on what that means in practice — especially given that privacy laws can vary widely by state.
Is TikTok’s privacy policy different from those of other platforms?
Yes and no.
Many platforms, including Meta, collect and process user data, and most apps request access to location information. However, the key difference for now is explicit choice. On many major platforms, users can opt out of certain types of data collection, particularly of sensitive information.
What’s the impact of TikTok’s U.S. privacy policy on users?
For TikTok U.S. users, day-to-day app functionality hasn’t changed, but trust in the platform has taken a hit. Some users say they are boycotting the app or deleting it altogether. Separately, some users have been reporting that their posts on certain topics are being removed. (See “TikTok US pushes back on claims it is censoring content,” from the BBC for more context.)
What’s the impact of the new U.S TikTok for advertisers?
Advertisers may feel the effects in two main ways: user behavior and brand perception.
If user boycotts gain traction and user engagement declines, advertisers may see fewer opportunities, even if short-term costs drop. At the same time, continuing to advertise on TikTok may be perceived by some consumers as an endorsement of the platform’s policies.
How should brands adapt to the new U.S. TikTok?
Brand response will largely depend on values, risk tolerance and short-term priorities.
- Values-driven brands that are particularly sensitive to consumer privacy issues may want to revisit their media mix, at least temporarily. Evaluating available content and core KPIs will help determine where dollars can be most effectively reinvested.
- Performance-focused brands may find it worthwhile to stay on TikTok, particularly if advertising costs decline due to reduced competition. Lower auction pressure can improve efficiency, but only if user activity remains stable. If cost efficiency is a primary KPI, brands should remain invested while closely monitoring performance, user trends and news, and have a clear contingency plan if conditions change.
- Brands on the fence should consider waiting a week or two before making major shifts. TikTok has indicated that privacy-related opt-out features are coming, which could ease many user concerns. And allowing time for initial reactions to settle may help separate facts from speculation. In the meantime, closely tracking performance and preparing a flexible reinvestment plan will ensure brands can move quickly if new information emerges.
Want to learn more and continue the conversation about your brand’s social strategy? Rise can help.
