Australia has no intention of banning TikTok but intelligence agencies will continue to monitor the popular short-video app.
Prime Minister Scott Morrison has distanced himself from US President Donald Trump's threat to ban the Chinese-owned app.
"We'll obviously keep watching them but there's no evidence to suggest to us today that that is a step that is necessary," Mr Morrison told the online Aspen Security Forum on Wednesday.
"There's nothing at this point that would suggest to us that security interests are being compromised or Australian citizens are being compromised.
"But 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."
However, Mr Morrison said, Australians need to be "very aware" that TikTok and other social media platforms, including US-owned companies, reap enormous amounts of information on users and subscribers.
The prime minister confirmed last month Australia was looking at TikTok over national security concerns about the personal data it handles.
Earlier on Wednesday, China's ambassador to the United States, Cui Tiankai, told the forum that the US move to force the sale of TikTok violated free market principles.
"There is such a degree of political intervention - government intervention - into the market, there is such discrimination against Chinese companies, and these companies are just private companies," he said.
"To accuse China of not giving American companies a level playing field while at the same time they themselves are denying Chinese companies such a level playing field, this is extremely unfair."
Mr Trump has threatened to ban TikTok in the US on 15 September unless its American operations are sold.
The US president wants the government to get a "substantial portion" of the sale price.
