TikTok to invest more than 12 billion euros in Europe

Short-video platform TikTok, owned by Chinese tech heavyweight ByteDance, announced on Friday that it plans to invest more than 12 billion euros ($13.1 billion) in Europe over the next 10 years to store European user data on local servers, a move experts said will better comply with local regulations and address concerns over data security.

They added that Chinese internet and tech companies making forays into overseas markets should attach great importance to guaranteeing the security of user privacy and strive to mitigate the potential risks related to cross-border data transmission.

The program called Project Clover will cover the cost of building three data centers, the implementation of privacy enhancing technologies and employment of an independent third-party security company — NCC Group — to audit and verify data controls and protections, as well as monitor data flows, TikTok said in a statement on its official website.

TikTok also revealed plans for its second data center in Ireland, and the third in the Hamar region of Norway. Last year, the company established its first European data center in Dublin, Ireland, where the migration of European user data commenced in September. TikTok expects this process to be completed by the end of 2024.

The first phase of its Norwegian data center will start the installation of servers and gradually transfer European users' data from next summer, it added. Currently, TikTok has over 150 million users across Europe and has gained wide popularity among the younger generation worldwide.

Ouyang Rihui, assistant dean of the China Center for Internet Economy Research at the Central University of Finance and Economics, said that TikTok's intensified efforts to establish European data centers and store user data locally indicate that the company pays close attention to data and personal information security, and is willing to provide more reliable privacy protection for European users.

"As governments around the world become increasingly aware of the tremendous amount of user data that big tech companies have been collecting and storing in recent years, the relevant laws and regulations on personal privacy information protection and data security are becoming more stringent," he said.

Ouyang added TikTok's latest measures aimed at ensuring user data security in Europe will help it better conform to local regulatory requirements, and improve compliance with the European Union's General Data Protection Regulation, a data protection and privacy law commonly known as the GDPR.

The GDPR, which took effect in May 2018, ensures that personal data can only be gathered under strict conditions and for legitimate purposes, and forces companies to make sure the way they collect, process and store data is safe.

The fast-growing social media app is also facing multiple fronts of pressure from the United States government, including a potential ban or divestiture of its business in the country.

The company has announced it will spend $1.5 billion on a plan known as Project Texas in a bid to bolster data security and gain user trust in its operations by storing US-based user data in the servers of US tech company Oracle.

Pan Helin, co-director of the Digital Economy and Financial Innovation Research Center at Zhejiang University's International Business School, said as the user data is stored on local servers, the potential risks concerning cross-border data transfer are expected to be significantly reduced, which is vital for improving TikTok's credibility among overseas users and reinforcing its competitiveness abroad.

Noting that compliance is becoming increasingly important as Chinese enterprises accelerate steps to expand their overseas footprint, Pan said these enterprises should learn more about relevant laws and regulations, and strengthen user information and data protection.