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Why won’t the U.S. ban TikTok? | Following the yuan
It is ridiculous to think that ByteDance’s hero product TikTok would see an outright ban in a market-driven, capitalist country.
This week, I’m happy to co-author a commentary with crisis PR consultant, in which she handles the meat of the matter, and I complained about Marco Rubio. Ok, I know, the newsletter is about *Chinese consumers*, but this is about one of their favorite products, Douyin’s cousin overseas (did I justify myself there? 🤔)
We also tried our hand at generative AI platforms including NightCafe Studio and Midjourney for some art used in this piece. So if there’s any legal issues with copyrights, it’s their fault. 😇
Let’s dive in! 🤿
As crackdown on Big Tech unwinds in China, the sector is taking a collective breather from state regulatory pressure, except for ByteDance, which faces an intensifying battle in a different country.
As the most successful social platform in the history of Chinese companies on the global stage, TikTok claims to have amassed one billion monthly active global users in Sep. 2021, of which around 94 million, or nearly 10%, were U.S. users (as Statista estimated). It’s a wet dream come true for Chinese entrepreneurs and VCs.
News publishers, brands, and marketers either jumped onto the TikTok bandwagon or have been dragging their feet to learn what’s trending, all because the platform got arguably the most valuable thing in business: young people’s attention. The Pew Research Center reported last October that 25% of adults in the U.S. who are under 30 get their news on TikTok, and 10% of all adults. As business whiz Scott Galloway rightfully quipped in his 2023 predictions: “When young people are asked to choose between TikTok and all of TV/streaming … they choose TikTok.”
The “ups” in business metrics for TikTok over the last three years have been met by an equal amount of “downs”in the social, political and regulatory spheres. A never-ending list of scandals about its toxic work culture, public relation snafu and infringement of data privacy by employees doesn’t garner the kind of public trust TikTok is trying so hard to get. While Chinese companies with ambitious “go global” dreams are envious of TikTok’s achievements, they are also taking notes of the criticism and missteps.
On the political side, the most ardent critics of TikTok are Republicans: FBI Director Christopher Wray, Federal Communications Commission Chairman Brendan Carr, and Sen. Marco Rubio, who seeks to ban the app from operating in the U.S. entirely. Critics like them tend to view the whole of China as a tainted blob on the world map, seek to benefit politically from China-bashing, and prefer to sever the two countries’ symbiotic cultural and business ties.
The concern for TikTok's dominance in the media landscape and potential to sway public opinions are not without merit: platforms with reach and a large user base have outsized political and social powers. However, how far does one take the argument that China related issues all could and should amount to a discussion on "Chinese influence operation" and "national security concerns"?
Last week, the Georgia Institute of Technology published a comprehensive national security threat analysis of TikTok that addressed the company’s financial background, threat level, data governance, and the pros and cons of a ban. The paper concluded that the app is a “commercially-motivated enterprise”, outlined how TikTok has adopted an “one company, two systems” approach and dismissed TikTok as a threat to U.S. national security.
The report has some notable gaps: the data access discussion dodges how meta data (user habits, the when, what and where) is used, and falls short of differentiating censorship from shadow bans or the limiting and capping of traffic to certain content, as well as content moderation. Despite its imperfections, the report’s overall framework is comprehensive and has provided neutral evidence to counter the toxic narrative parroted by the aforementioned China hawks.
Identified as a capitalist country, the U.S. should know business rules the best.
While TikTok has already been banned on government devices in a dozen states, as well as several campuses including University of Texas at Austin, an outright ban to cut all U.S. users’ access is outright ridiculous. The users, creators, and businesses increasingly rely on it; it’s their self-expression tool, search engine, and lifeline.
Banning TikTok would also signal the unraveling of confidence in building international companies in the U.S. The benefits of an open and unrestricted market are at odds with the political bantering and resulting consideration of banning TikTok by executive order.
Ironically, the likes of Rubio are dreaming of a scenario that could only happen in China, where the one-party central government could call off everything — U.S. IPOs and a burgeoning tech industry from late 2020 until recently — whereas the U.S. constitutional system and market-driven principles ensure that an outright ban is unlikely to happen.
TikTok carries the potential to boost communication and understanding for people in different countries and of different origins. Like Facebook, Twitter and Snapchat, it can amplify worrisome trends via algorithms, but the corrective and constructive conversations should be had within a business context. To hold up social responsibility, it should also lend a helping hand to certain regulators in clamping down content such as ‘dragon’s breath’ in Indonesia, which involves with liquid nitrogen in food and harms children’s health.
The most critical issue for TikTok in 2023 is the negotiation with the Committee on Foreign Investment in the United States (CFIUS), which has been steadily increasing its scrutiny of Chinese investment in U.S. businesses. So far, TikTok has gone as far as letting Oracle store its U.S. users' information just to make regulators chillax.
Rubio called TikTok a “potential spyware” in his Washington Post column, while in reality, open source intelligence tools can be used to gather extensive data about social media users, as the Georgia Tech paper noted. One doesn’t need to be Chinese to do that.
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