Key Takeaways:
- Brands, creators, and technology platforms need to be prepared to adapt to the changing legislative scene, and think creatively, and commercially, about filling the gap left by TikTok’s possible absence.
- The EU’s groundbreaking AI Act aims to balance innovation with safety and fundamental rights. For the fashion industry, this means increased transparency and accountability in the use of AI technologies, potentially creating greater confidence and awareness for both businesses and customers.
TikTok’s Uncertain Future Keeps the Fashion Industry On Its Toes
This past week, there was a rare display of cooperation across party lines as the House of Representatives overwhelmingly approved a bill that could potentially restrict TikTok’s operations within the United States. The bill is the Protecting Americans from Foreign Adversary Controlled Applications Act and supporters argue that it’s not a ban, rather, the mandating of a divestiture by ByteDance (the parent company of the app) requiring TikTok to be sold within roughly six months to an entity not under the influence of the Chinese Communist Party, Russia, Iran, or North Korea.
The legislative measures taken against TikTok are driven by national security worries surrounding ByteDance. Despite its popular image as a platform for light-hearted content including dances and influencer promotions, policymakers have voiced concern that the app might be exploited by the Chinese government to gather personal data from or sway its 150 million American users. Should the bill be approved by the U.S. Senate and enacted into law, TikTok would face a deadline of approximately six months to sever ties with ByteDance. Failure to comply would result in app stores within the United States being barred from offering the TikTok app for download.
But there are still many hurdles to be cleared before this happens. First, the bill is largely unpopular with TikTok users, many of whom also happen to be young voters who could hold major sway in the 2024 US election, which senators are keenly aware of. Some TikTok users posted videos ahead of Wednesday’s vote showing them calling their representatives and threatening to vote for alternate candidates if they voted to pass the bill. And, on the other side, Beijing might resist ByteDance’s attempt to divest itself of China’s most successful international online service, the allotted six-month timeframe might also be too tight to secure a successful sale, and even if ByteDance were to find a suitable purchaser, it would still need to navigate an antitrust assessment by the Federal Trade Commission.
The TikTok turbulence has the fashion industry on high alert. The platform has become integral for brands to engage with consumers, especially younger demographics – with a reported spend of $4 billion on advertising in 2023. For many individuals, creating content on TikTok is their main source of income, and TikTok itself employs 7,000 people in the US.
The potential disappearance of TikTok could mean that any platform with a similar business model is poised to gain from TikTok’s absence in the digital advertising space. But while competitors like YouTube, Snapchat, Instagram, Facebook, X and others have introduced scrolling video features similar to TikTok’s format, they have not yet perfected the recommendation algorithm that gives TikTok its unique appeal. Even so, some key contenders are well-positioned for potential success, primarily Instagram and YouTube, with their respective Reels and Shorts features. There may be still-in-the-works apps that are able to harness the insights gained from TikTok, focusing on users’ preference for short-form videos and highly personalised content feeds.
Content creators are grappling with the looming possibility of a TikTok ban, adding another layer to the ongoing challenges they’ve encountered over the years. Creators have had to be swift to adapt to challenges like constant changes to the Instagram algorithm and Pinterest’s removal of affiliate links back in 2015. While seasoned creators understand the importance of diversifying across platforms, younger creators – whose primary audience might be on TikTok – may feel more pressure to expand their presence elsewhere. But this is easier said than done – transferring a substantial TikTok audience to another platform is no simple task and carries the risk of losing followers in the process. Also, each platform operates with its own unique monetisation methods, meaning that creators will need to learn how to optimise a new system in rebuilding their businesses elsewhere. But something that will not be as easily recreated is TikTok’s distinct focus on the “For You” page, which provides brand and creators alike with exceptional accessibility to new audiences, setting it apart from other platforms because of its reach capabilities.
How the fashion industry will react given this most recent update will be playing out in the months to follow. It seems that many believe that an outright TikTok ban won’t happen, and so are not reducing their presence on the app. Actually, many are intensifying their investments, making hay while the sun shines. Will it be worth it?
The EU’s AI Act: Balancing Safety with Innovation and Investment
Staying on the topic of legislation, the European Parliament has greenlit the world’s first set of extensive regulations governing the development and application of artificial intelligence (AI). The regulation, agreed in negotiations with member states in December 2023, was endorsed by MEPs with 523 votes in favour, 46 against and 49 abstentions. Originally introduced by European legislators in 2021, it gained momentum in the last two years, spurred by the swift evolution of large language models (LLMs) like OpenAI’s ChatGPT and Google’s Gemini chatbot.
In its statement on the newly agreed regulation, the European Parliament explained that the AI Act “aims to protect fundamental rights, democracy, the rule of law and environmental sustainability from high-risk AI, while boosting innovation and establishing Europe as a leader in the field. The regulation establishes obligations for AI based on its potential risks and level of impact.” The AI Act measures risk in four categories: unacceptable, high-level, limited, and minimal.
Anything at the level of “unacceptable” risk is effectively banned. This includes “all AI systems considered a clear threat to the safety, livelihoods and rights of people”, and include “real-time” remote biometric identification systems in publicly accessible spaces, predictive policing systems, emotion recognition systems, and Indiscriminate scraping of biometric data from social media or CCTV footage to create facial recognition databases.
Bans will start coming into effect from November. It is expected that like the GDPR regulations introduced by the EU in 2016, this act will set the tone worldwide. The AI Act is part of a wider package of policy measures to support the development of trustworthy AI, which also includes the AI Innovation Package and the Coordinated Plan on AI. The European Commission also makes it clear there will be a balance between safety and fundamental rights of people and businesses when it comes to AI, and will “strengthen uptake, investment and innovation in AI across the EU.”
For fashion, the AI Act has the potential to create a greater sense of confidence around the responsible use of AI for designers, manufacturers, retailers, e-commerce platforms, fashion influencers, and consumers. In accordance with the Act, brands and retailers that use AI to provide personalised recommendations or styling advice will need to review how that is disclosed to their customers, and any AI-generated content will need to be explicitly labelled. Ideally, there will be greater awareness around where AI has been, and can be, used and encourage brands to fully understand the tools they make use of and account for how they are being used.
With the AI Act being the first of its kind, and being applied to an area that is developing rapidly almost everyday, the hope is that the legislation has enough room for interpretation to remain future-proof, without being too wide open for companies to leverage the loopholes. And if done right, could pave the way for the future, and inevitable, technology revolutions in the years ahead.
Best of The Interline
Kicking off this week is the Founder and CEO of WhichPLM discussing the opportunities in efficiency and creativity that DPC and AI could provide for fashion, with the right investment and optimisation.
Jenny Holloway shares the key benefits of 3D and DPC tools and workflows. But behind the scenes, she asks whether they’re also proving fundamental to delivering on the vision for domestic supply chains, as one pioneering social enterprise discovered.
For her first episode as the new host of The Interline Podcast, Emma Feldner-Busztin talks to the co-founder of men’s and women’s suiting brand Batch LDN about building a community of conscious shoppers, producing on-demand, and what it takes to make “slow fashion” not just a viable business model but a unique experience for consumers.
Closing out the week: we analyse the AI rear-view. In 2017, we analysed what AI looked like, where it might be headed, and what it could all mean for fashion. Seven years on, how much did we get right?