Sen. Tim Scott (R-S.C.) has introduced a bill in the Senate called the Know Your App Act which would increase consumer information without limiting consumer choice. The bill requires app stores to publicly display the country of origin of all apps available to consumers. A measure like that is something app stores could implement seamlessly, meaning the bill would create little to no extra burden on them. Increasing consumer access to information at little-to-no cost to platforms only enhances smart consumer choices.
The Know Your App Act requires app stores to display the country of origin of the principal owner of apps listed on their store. The principal owner must hold at least a 25 percent ownership in the firm that owns the application. Additionally, a list of “countries of concern” will be created by the secretary of commerce and the treasury secretary and submitted to Congress for approval. The list is defined by the risk of government data access. With this system, countries are given a disclaimer and the option to be filtered out by consumers.
It is important to note the “countries of concern” category is highly subjective. The definition given is a country that has “a national law that may subject a developer or application to control by the government of the country over content moderation, algorithm design, or user data transfers.” Would that include the European Union, since various laws, including the Digital Services Act, play a role in guiding platform moderation? Would that include the U.S. because FISA Section 702 allows intelligence agencies to access non-US citizen data?
Clarity is needed so the list of countries the treasury and commerce secretaries devise is not simply a “who’s-who” of state department enemies. Either the list must accurately reflect the complexity of global data privacy issues, or it should be fully left up to the consumer to determine which countries they trust without disclaimers coxing them in one direction or another.
Regardless, enhancing consumer choice is a key aspect of consumer policy, and based on polling, knowing the country of origin affects consumer opinion about apps. In a recent Pew Research poll, customers who knew TikTok’s parent company, ByteDance, was incorporated in China were over twice as likely to support banning the app. Additionally, when asked about their confidence in American vs. Chinese applications in keeping their data private, consumers had more confidence in American applications by a difference of 23 percent.
Consumers care about where the application they use came from, and that is likely because the Chinese state can compel domestic firms to release private data. Under the National Intelligence Law of the People’s Republic of China, article 7, all businesses registered or operating in China may have to forfeit information if demanded by Chinese Intelligence.
Efforts to ban TikTok are in legal battles, notably with potential First Amendment violations. A total ban on TikTok could unfairly remove consumer choice. Thus, obligating the disclosure of this information to new purchasers may be the perfect way to grant consumers the ability to avoid apps they don’t trust.
Beyond just TikTok, out of the 475 apps that made the “top five apps” for the first quarter of 2023, 33 percent were owned by Chinese parent companies. Popular apps like Lemon8, Temu, and Pinduoduo are all held by Chinese firms that are obligated by the Chinese state to hand over data when required. Pinduoduo, launched in the U.S. as an e-commerce and budgeting app in September 2022, collected user data without informing consumers.
Because of the inherent entanglement between Chinese firms and Chinese state power, all applications originating from China are subject to a certain level of skepticism. Requiring app stores to display the country of origin for all apps is a way to improve consumer knowledge without eliminating consumer choice.
