The Prime Minister has indicated the Federal Government will not ban TikTok, but has warned Australians the wildly popular video-sharing app "connects right back to China".
TikTok hoovers up large quantities of user data and some analysts have warned its parent company may be forced to share that information with the Chinese Government.
Last month, Scott Morrison said the Government was looking "very closely" at the Chinese-owned app, and multiple agencies had been investigating whether it posed a security threat.
But the Prime Minister seemed to rule out a ban, telling the Aspen Security Forum: "There's nothing at this point that would suggest to us that security interests are being compromised, or Australian citizens are being compromised.
"We'll obviously keep watching them, but there's no evidence to suggest to us today that [a ban] is a step that is necessary."
However, Scott Morrison said US-owned apps were more transparent than TikTok, and warned data on the app could potentially be accessed at a "sovereign state level".
"People need to understand where the extension cord goes back to," he told the Forum.
"People should know that the line connects right back to China and they should exercise their own judgment about whether they should participate in those things or not."
India has already banned TikTok and the Trump Administration has threatened to do the same in the United States.
A US government panel has given TikTok's parent company until September 15 to sell the app's US operations to American giant Microsoft.
The deal could also see TikTok's Australian and Canadian arms being sold to Microsoft.
US President Donald Trump said the US Government should get a "substantial portion" of the sale price, drawing a furious response from Beijing.
