Canada Orders TikTok to Cease Operations Following Security Review

In a decisive move to address national security risks, the Canadian government has ordered the closure of TikTok Technology Canada, Inc., the Canadian arm of ByteDance Ltd., which operates the widely used TikTok platform.

Minister of Innovation, Science, and Industry François-Philippe Champagne announced the decision following a multi-stage security review under the Investment Canada Act. The decision, based on intelligence and evidence gathered over months, reflects increasing concerns over foreign-controlled social media operations in Canada, particularly around data privacy and potential foreign interference.

The Canadian government clarified that this order does not prevent Canadians from accessing the TikTok app. Instead, the closure specifically targets the business operations of TikTok Technology Canada, Inc., restricting ByteDance's formal presence within Canadian borders.

“The government is not blocking Canadians' access to the TikTok application,” Champagne explained, emphasizing that Canadian users have the personal choice to continue using the app. However, he encouraged Canadians to remain cautious about their data privacy and security, especially when dealing with apps run by foreign entities.

Background on the national security review

The decision was made following a national security review that scrutinizes foreign investments posing potential threats to Canadian interests. This review process, defined under the Investment Canada Act, was recently updated in March 2024 to include stricter guidelines for interactive digital media companies like TikTok.

The Act mandates a rigorous examination of foreign-controlled entities that may access or influence sensitive data. Canada's national security and intelligence agencies played a central role in advising on the decision, offering insights on potential data security and privacy risks associated with ByteDance's Canadian operations.

ByteDance Ltd., the parent company of TikTok, has faced similar regulatory scrutiny worldwide, with several countries expressing concerns about its handling of user data and its ties to the Chinese government.

In Canada, the company's data collection practices, coupled with the possibility of user data being stored in jurisdictions with different legal protections, raised red flags for regulators. Despite assurances from ByteDance on data protection, Canadian authorities have been proactive in assessing the risks posed by foreign entities in sectors that handle personal data and influence public discourse.

TikTok's response

TikTok rejected the allegations against it, stating that Canada's move only achieves the elimination of job positions filled by local talent. The social media firm said it plans to challenge the decision in court.

Shutting down TikTok's Canadian offices and destroying hundreds of well-paying local jobs is not in anyone's best interest, and today's shutdown order will do just that. We will challenge this order in court. The TikTok platform will remain available for creators to find an audience, explore new interests, and for businesses to thrive. – TikTok

Guidance for Canadians

In conjunction with the announcement, the government pointed to cybersecurity advice from the Communications Security Establishment (CSE) through the Canadian Centre for Cyber Security. The advisory urges Canadians to adopt vigilant cyber hygiene practices when using social media and messaging apps. The guidance emphasizes the following actions:

• Users are encouraged to read about apps in reputable media sources and review their data policies to understand what personal information they may be giving away.
• Prioritizing apps with solid privacy controls and enabling multi-factor authentication is recommended to secure accounts from unauthorized access.
• CSE advises users to be cautious with app permissions, limiting access to sensitive device features such as location, camera, and contact lists to protect against misuse.
• Users are urged to consider where their data is stored, as information stored outside Canada may be subject to foreign laws, potentially affecting privacy protections.

This development underscores Canada's enhanced scrutiny over foreign investments in sectors managing critical data, such as social media and digital communications. The government has consistently stated that while it welcomes foreign investment, it will take decisive action against those perceived as national security risks. The closure of TikTok Technology Canada, Inc. is a signal to other foreign-owned companies operating in Canada's digital landscape that compliance with Canadian data and security standards is paramount.