TikTok admits to storing data of U.S. Creator Fund recipients on Chinese servers

TikTok‘s CEO is facing more animosity from his Congressional opponents thanks to statements he made back in March. During his appearance on Capitol Hill, Shou Zi Chew claimed that the data of U.S. TikTok users is stored on servers in Virginia and Singapore. But in a recent statement, the ByteDance-owned app admitted that it makes exceptions to that policy for users who are enrolled in its Creator Fund.

Chew’s initial claims came during a six-hour grilling in Congress, in which U.S. officials criticized TikTok’s data security practices. About three months later, a bipartisan group of U.S. Senators authored a letter in which they accused Chew of making “incorrect claims.” The letter argues that Chew’s statements about data security contradicted claims made by TikTok Head of Public Policy Michael Beckerman in October 2021.

TikTok responded to that letter by making a distinction between ordinary users and creators. Videomakers who participate in the app’s monetization features, such as its Creator Fund, are required to share some personal data with TikTok. Those details can be routed to servers outside of the U.S. and Singapore. While TikTok didn’t say exactly where it stores creator data, a Forbes investigation determined that “tax forms, social security numbers and other information from creators and outside vendors has been stored in China.”

In the eyes of the accusatory Senators, the Creator Fund data policy is evidence of Chew’s Congressional perjury. In its response, TikTok contested that idea by argued that it had already ironed out “limited exceptions” as part of its multi-year negotiation with the Committee on Foreign Investment in the United States

TikTok and CFIUS are attempting to work out a deal called Project Texas, which would assign Oracle as the shepherd of TikTok’s U.S. user data. Exceptions noted by TikTok include “public data, business metrics, interoperability data, and certain creator data, if a creator voluntarily signs up for a commercial program to be supported by TikTok in reaching new audiences and monetizing content.”

Therefore, in TikTok’s eyes, Chew did not perjure himself back in March. “We stand by the statements made by our company executives to Congress,” reads the app’s letter. “We were asked about, and our testimony focused on, the protected user data collected in the app—not creator data.”

The question of TikTok’s data security could make or break the app’s future operations in the United States. Chew and his deputies have struggled to convince Congress that TikTok’s U.S. user data stays out of China, and that could lead to a federal ban on the app or other restrictions on data movement. President Biden‘s Commerce Department recently added a new rule that asks the Commerce secretary to consider whether data that is “subject to the jurisdiction or direction of a foreign adversary” constitutes “undue or unacceptable risks.”

There is at least one positive for TikTok in this whole situation: The U.S. government may be softening on the idea of an outright ban. The latest piece of anti-TikTok legislation introduced in Congress would put restrictions on the app’s data transfers while still allowing it to operate in the United States.