GOP senator urges FTC to investigate TikTok clone that pays users

GOP senator urges FTC to investigate TikTok clone that pays users
© Greg Nash

Sen. Josh HawleyJoshua (Josh) David HawleyDavis: The Hall of Shame for GOP senators who remain silent on Donald Trump China sanctioning Rubio, Cruz in retaliatory move over Hong Kong The Hill's Morning Report - Presented by Facebook - Negotiators signal relief bill stuck, not dead MORE (R-Mo.) urged the Federal Trade Commission (FTC) on Wednesday to investigate Zynn, a clone of short-form video app TikTok that pays users to watch videos and has rocketed up app store charts.

Zynn's layout is nearly identical to that of TikTok, an app from rival Beijing-based company ByteDance that has well over 100 million downloads in the United States. Zynn is created by Kuaishou, another Chinese company.

Kuaishou runs the second biggest video app in China, only trailing Douyin, the Chinese version of TikTok. Unlike TikTok, however, Zynn claims to pay users both to watch videos and get their friends to sign up.

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Hawley said in his letter to the FTC that Zynn's payment system "smacks of a textbook predatory-pricing scheme."

"The most substantial payments come from referrals: just like a traditional pyramid scheme, users receive exponentially larger payouts once they successfully convince others to install Zynn on their own devices," he wrote. "The more devices on which Zynn is installed, the more money early adopters can make."

The Republican senator also raised concerns about the company's ties to China.

He said that the app may be used to "empower Chinese leadership to pry into the private affairs of Americans by hoovering up enormous amounts of information," alluding to a 2017 law that requires Chinese companies to comply with data requests for state intelligence work. 

Beyond providing data to the Chinese Communist Party, Hawley pointed to reports suggesting that Kuaishou has censored videos containing content critical of China.

Hawley has leveled similar allegations against TikTok, introducing legislation earlier this year that would outright ban federal employees from using the app on government devices.

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ByteDance, the parent company of TikTok and Douyin, is headquartered in and operates out of Beijing, but is technically incorporated in the Cayman Islands.

Finally, the Missouri lawmaker wrote that given the similarities between Zynn and TikTok, the FTC should "suspect" that the newcomer may also not be abiding by the federal law governing privacy safeguards for children online.

TikTok last year settled with the FTC over allegations that one of its predecessors, Musical.ly, violated the 1998 Children’s Online Privacy Protection Act (COPPA), which makes it illegal for developers of apps geared toward children to collect personally identifiable information on users under the age of 13 without consent from parents or legal guardians.

TikTok agreed as part of the settlement to obtain parental permission before collecting personal information and to delete any information about users identified as under 13, although children's privacy groups allege that those privacy commitments have been broken.

No evidence was provided in the letter to suggest that Zynn is violating COPPA beyond its similarities to TikTok.

Like TikTok, Zynn does not require users to sign in to view videos.

However, in order to receive the money promised by the app, users must create an account with a Google, Twitter or Facebook profile or a phone number.

Zynn also requests access to location services when signing up, but does not require it.

The Hill has reached out to the app for comment on the letter.