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The looming Hong Kong showdown

Fully Charged
Bloomberg

Hi there, it's Shelly. The tech exodus from Hong Kong is very likely just getting started.

Last week, TikTok became the first internet company to withdraw from Asia's financial capital when it pulled its viral video app from mobile stores. The move was a response to China's decision to enact sweeping new powers in Hong Kong, in order to crack down on national security threats and police the internet there.

For TikTok, though, leaving Hong Kong won't have a major impact on the bottom line. The city accounts for less than 1% of global installations of the app, according to Sensor Tower, and some residents were already hesitant about handing over their data to the company's parent, Chinese tech giant ByteDance Ltd.

The greater contest is likely to come later, when U.S. companies like Facebook Inc., Alphabet Inc.'s Google, Twitter Inc. and Microsoft Corp. face increasingly difficult questions about how closely to guard users' data in Hong Kong. So far, most American tech players, seemingly blindsided by the law, have said they would temporarily pause requests for data from the Hong Kong government.

A Google spokesperson said last week that the company would "continue to review the details of the new law." And a Twitter spokesperson said the company had "grave concerns."

As of right now, the companies have stopped short of pulling operations from the city, or shutting down their sprawling, colorful offices. But Beijing and Hong Kong are likely to come knocking on the doors of U.S. tech giants, looking for information about users of interest. That could mean asking them to provide a protester's GPS location or IP address, or take down certain posts. If the companies comply, the information could have serious consequences for users, since the sweeping new national security laws overrides the city's independent legal system. 

And that's not the only headache for the tech industry in Hong Kong. The new law could also alter Hong Kong residents' unchecked access to the internet and make it harder for people and businesses to avoid the restrictions around China's so-called Great Firewall. The loss of more global tech companies in the city might wind up hastening its isolation from the rest of the world.

That may already be happening with TikTok. On paper, the company's withdrawal from a city once prized for its open internet looked like a love letter to democracy, a nod to Western politicians' sense of free speech and a stand against funneling user data to Beijing. But in reality, removing TikTok may actually serve to cut off another tool for protesters (that's even though the app had been accused of censoring content related to the pro-democracy marches, a claim the company denies).

For the most part, protesters have relied on Facebook, WhatsApp, Telegram and Google to organize. And it's only a matter of time before Beijing tests those companies' boundaries. When that time comes, the American internet giants will need to know where their red lines are and have a plan for how to answer. All these companies have long argued that freedom of expression is a fundamental human right. They may soon be forced to show how far they're willing to go in order to defend it. Shelly Banjo

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