Is Time Up for TikTok?

Robert Brooks Contributor
Is Time Up for TikTok?
Read Time: approx. 2:57

This is the top story from our daily newsletter published on August 3, 2020. To have this and more delivered directly to your inbox scroll down and enter your email or click here to sign up.

Is Time Up for TikTok? Last Friday, President Trump said that he is considering taking action to ban TikTok, the wildly popular Chinese-owned video app. Tens of millions of people use TikTok in the United States and hundreds of millions of people use it globally, meaning it has become a threat to US tech-giants like Facebook and Snapchat. Besides competition, however, the app has been in the spotlight for national security and censorship concerns. TikTok adamantly claims it doesn’t censor videos based on topics sensitive to China and it would not give the Chinese government access to US user data even if asked. The company has also hired a US CEO, a former top Disney executive, in an attempt to distance itself from its Chinese ownership. Here’s what both sides are saying about the potential ban:

On the RightUS Senator Josh Hawley (R-Mo.) gave a speech on March 4, 2020 about the dangers of TikTok. In the “Dangerous Partners: Big Tech & Beijing” hearing Hawley begins by saying that “TikTok was the most downloaded app of 2019” and that “more teenagers are on the app than use Facebook.” While it “counts millions and millions of Americans as users… it is owned by a Chinese company that includes Chinese communist party members in leadership and it is required under Chinese law to share user data with Beijing.” Moreover, “TikTok has admitted that it has sent user data to China.” Hawley says, “To put it bluntly this is a major security risk for the American people.” So what kind of data is TikTok actually collecting? Hawley says “a heck of a lot more than you would think. Images of course. But TikTok also collects information about the messages you send, about the apps that you use, the other apps on your phone, it collects the sites that you visit, it collects your search history, it collects your keystrokes, it collects your location data. It stores all of this and maybe lots, lots more.” Hawley points out how “the Pentagon, the Department of State, the Department of Homeland Security, and the TSA have all banned their employees and service members from using TikTok on government devices. In fact, the Pentagon even went so far as to say that employees should have their children uninstall TikTok from their personal devices.” In summary, Hawley and those who agree with him believe banning TikTok is a necessary step to protect the data security of the American people.

On the LeftKevin Roose of the New York Times published an article on July 26, 2020 titled: “Don’t Ban TikTok. Make an Example of It.” Roose says: “I’ll be honest: I don’t buy the argument that TikTok is an urgent threat to America’s national security. Or, to put it more precisely, I am not convinced that TikTok is inherently more threatening to Americans than any other Chinese-owned app that collects data from Americans. If TikTok is a threat, so are WeChat, Alibaba and League of Legends, the popular video game, whose maker, Riot Games, is owned by China’s Tencent.” Roose argues that “since banning every Chinese-owned tech company from operating in America wouldn’t be possible without erecting our own version of China’s Great Firewall — a drastic step that would raise concerns about censorship and authoritarian control — we need to figure out a way for Chinese apps and American democracy to coexist.” Roose in turn proposes an idea: “Instead of banning TikTok, or forcing ByteDance to sell it to Americans, why not make an example of it by turning it into the most transparent, privacy-protecting, ethically governed tech platform in existence?” Roose says in addition to the ongoing “national security review by the Committee on Foreign Investment in the United States of ByteDance’s 2017 acquisition of, TikTok’s predecessor app… there is plenty more the US government could do to ensure that TikTok plays a responsible role in our information ecosystem without getting rid of it altogether. It could require the company to open-source key parts of its software, including the machine-learning algorithms that determine which posts users are shown. It could pressure TikTok to submit to regular audits of its data-collection practices, and open up its internal content moderation guidelines for public comment.” Roose points to American tech-giants like “Facebook, Instagram, YouTube, Twitter and Snapchat [who] are playing a huge role in the lives of millions of Americans, and for years, have operated with a degree of secrecy that few other companies of their importance have been allowed.” In conclusion, Roose says “The debate over TikTok’s fate should really be a debate about how all of the big tech companies that entertain, inform and influence billions of people should operate, and what should be required of them, whether they’re based in China or Copenhagen or California.”

Flag This: After Bloomberg reported Trump’s plans to order ByteDance to divest its ownership of TikTok on Friday, several media outlets reported Microsoft is in talks to purchase TikTok’s US operations. Microsoft then confirmed last night that it is indeed in discussions to acquire the US arm of the company. In a statement, Microsoft said itself and ByteDance have provided notice of their intent to explore a deal resulting in Microsoft owning and operating the TikTok service in the US, Canada, Australia, and New Zealand. The company said it expects those talks to conclude by Sept. 15. The question then becomes, would a TikTok spin-off solve anything? Tae Kim of Bloomberg thinks it would. Kim writes that a “Microsoft-TikTok combination would create a much more competitive US digital advertising market by establishing a powerful third player against the two dominant internet ad goliaths, Google parent Alphabet and Facebook. And let’s face it, the [Trump] administration may prefer a sale of TikTok — even to a giant like Microsoft — over banning an app that’s wildly popular with millions of Americans.” In his article above, Roose of the New York Times similarly points out that “In response to the mounting pressures, TikTok is wrapping itself in the American Flag” by “tripling the number of employees in the US since the start of 2020…with plans to hire 10,000 more people over the next three years in places like Texas, New York, and Florida.” There are others, however, who think that a TikTok spinoff wouldn’t solve anything. Samm Sacks, a cyber policy fellow at the centrist think tank New America says, “An American-owned TikTok could still legally sell data to third-party data brokers, for example, which could then feed it back to the Chinese authorities.” One final thing to think about is the timing of Trump’s announcement, specifically as it relates to TikTok as a rising competitor against US tech giants. If enacted, the TikTok ban would take place during the same month that Facebook’s Instagram is planning to unveil “Reels” in the United States. Reels is Instagram’s version of TikTok. A TikTok ban would beneficial for Facebook. It would also lead to less competition, which is one of the reasons Mark Zuckerberg and other tech CEOs were grilled by lawmakers last Wednesday. Trump is a wildcard, and apparently doesn’t mind implementing an outright ban, but we think a spin-off deal gets done for a few reasons. For starters, a lot of people use the app and a ban may actually have ramifications at the polls. Granted these users are younger and most likely not Trump supporters to begin with but it is something to consider. Secondly, job creation. At the end of May, TikTok signed a lease for 230,000 square feet in Times Square, making it the biggest tenant in New York City. A ban could lead to less of this and the evaporation of the 10,000 jobs mentioned above. Lastly, competition. If Trump forces a spin-off and Microsoft ends up with TikTok’s US assets that would lead to more competition in the digital advertising space. This is something Congressional democrats would applaud. With all of that said, a spin-off to the right partner, like a Microsoft would lead to less voter resentment, more jobs, and increased competition — maybe as close to a “win win” as you’re going to get in this day and age.