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Unfortunately, when the House Energy and Commerce Committee floated a bill that would force ByteDance to divest, someone at TikTok seems to have thought, “What a great opportunity to prove the China hawks right, and Megan wrong!”
What would a TikTok ban mean for you? Submit your response here.
The wise thing to do would have been to stay quiet and work the back channels, reassuring anxious members of Congress that most TikTok users are too busy trying to master the cha-cha to worry about politics. TikTok did the opposite. “We have more than 100 million users,” they thought. “We should use them!” And the app started flashing messages urging those users to call Congress to complain.
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House members were promptly flooded with calls, some of which seemed to come from teenagers. Teenagers are not, of course, a reliable voting base. But they do tear at the heartstrings when it seems as though they’re being manipulated by a creepy, authoritarian app. All these passionate demands to leave TikTok alone reinforced lawmakers’ fears that Commie psy-ops were shaping vulnerable American minds. The bill to require divestment passed out of committee unanimously, and House Majority Leader Steve Scalise (R-La.) says he might bring it to a vote as early as Wednesday.
As of Monday, TikTok was continuing its campaign, which I suspect is just making things worse. Though the bill might face stiffer resistance in the Senate, the more the company demonstrates that it can influence American public opinion on political issues, the more eager Congress will be to take that power out of CCP hands.
But even if it passes, and Biden signs it, there are still a lot of hurdles between here and actually closing a sale.
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For starters, this law or any similar law would have to clear the courts, where it would face extra scrutiny because it threatens a platform where tens of millions of Americans exercise their First Amendment rights to express themselves. This is not an insurmountable problem, especially if we’re talking about divestment rather than a ban — the United States has long limited foreign ownership of broadcast stations, and the Chinese owners of Grindr, the LGBTQ+ dating app, were pressured into divesting in 2020 because of national security concerns. But would it be resolved within the 180-day deadline that Congress means to allow Bytedance to sell?
Then TikTok would have to sell itself for a lot of money. Grindr sold for about $600 million. TikTok is one of the most successful social media apps in the world, and its price tag would be likely to run into the hundreds of billions.
Given the short time frame in the current bill, an initial public offering might be impractical, meaning ByteDance would need to find a buyer. The most obvious candidate would be one of the big tech firms, which have valuable stock to swap and lots of cash on their balance sheets, access to major capital, experience managing tech platforms, and existing products they’d probably love to integrate with TikTok. The problem is, this might run afoul of the Biden administration’s antitrust approach.
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Lina Khan, the chair of the Federal Trade Commission, is skeptical of big companies, and very skeptical of big companies that want to get even bigger by merging. Would she stand by and let a tech giant buy TikTok? And knowing the challenge they’d be likely to face, which tech companies would charge into the fray to make an offer?
This doesn’t mean that no buyer would be found — Bobby Kotick, the former chief executive of Activision, is reportedly already trying to put together a deal. But 180 days isn’t a huge amount of time to find, and finance, a competent new owner. And what would happen if the Chinese government tried to block the sale? The app would have to be shut down in the United States, costing its owners billions, enraging those who use it — and paradoxically making two arguments more compelling: first, that the CCP has nefarious uses for TikTok and, second, that any attempt to separate TikTok from the CCP raises serious First Amendment issues.
All of which makes the future rather murky, even if this bill passes in some form. If I had to wager, I’d say that TikTok will maybe someday be sold. But I wouldn’t necessarily bet on that happening someday soon.
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Last year, China sent $427 billion worth of goods to the United States, according to the Census Bureau. This number, however, leaves out one of China’s most important exports: its censorship regime. The country presses, at home and abroad, for foreign institutions and people — including media, universities, celebrities and companies — follow Chinese Communist Party rules on what can be said, or not said, about China. Never mention the Dalai Lama, for one thing. Stay quiet about Chinese human rights abuses. And pretend Taiwan doesn’t exist.
Individuals, institutions and companies that do not toe the party line fear losing access to their sources and their markets, and, obviously, the deeper the involvement with China, the greater the fear. Which is why Congress might force ByteDance, the Chinese owner of TikTok, to either divest the app or shut it down in the United States.
As I’ve written before, I find worries about Chinese interference plausible, but I also doubt they matter as much as the China hawks fear. Yes, about one-third of young American adults regularly get their news from TikTok, and, yes, there’s reason to believe that TikTok might have tuned its algorithm to keep content critical of China from going viral. It’s also reasonable to worry that TikTok might be boosting material that, say, sows political dissension within the United States.
But even if TikTok is acting like an extension of Chinese state-owned media, it isn’t one. Americans have many ways to get news, most of which aren’t owned by China. TikTok might have the capacity to nudge a few people toward more China-friendly views, but putting its thumb on the scales in that way might also destroy user trust. Even if it didn’t, we’re talking about a very modest nudge, not brainwashing.
Unfortunately, when the House Energy and Commerce Committee floated a bill that would force ByteDance to divest, someone at TikTok seems to have thought, “What a great opportunity to prove the China hawks right, and Megan wrong!”
What would a TikTok ban mean for you? Submit your response here.
The wise thing to do would have been to stay quiet and work the back channels, reassuring anxious members of Congress that most TikTok users are too busy trying to master the cha-cha to worry about politics. TikTok did the opposite. “We have more than 100 million users,” they thought. “We should use them!” And the app started flashing messages urging those users to call Congress to complain.
House members were promptly flooded with calls, some of which seemed to come from teenagers. Teenagers are not, of course, a reliable voting base. But they do tear at the heartstrings when it seems as though they’re being manipulated by a creepy, authoritarian app. All these passionate demands to leave TikTok alone reinforced lawmakers’ fears that Commie psy-ops were shaping vulnerable American minds. The bill to require divestment passed out of committee unanimously, and House Majority Leader Steve Scalise (R-La.) says he might bring it to a vote as early as Wednesday.
As of Monday, TikTok was continuing its campaign, which I suspect is just making things worse. Though the bill might face stiffer resistance in the Senate, the more the company demonstrates that it can influence American public opinion on political issues, the more eager Congress will be to take that power out of CCP hands.
But even if it passes, and Biden signs it, there are still a lot of hurdles between here and actually closing a sale.
For starters, this law or any similar law would have to clear the courts, where it would face extra scrutiny because it threatens a platform where tens of millions of Americans exercise their First Amendment rights to express themselves. This is not an insurmountable problem, especially if we’re talking about divestment rather than a ban — the United States has long limited foreign ownership of broadcast stations, and the Chinese owners of Grindr, the LGBTQ+ dating app, were pressured into divesting in 2020 because of national security concerns. But would it be resolved within the 180-day deadline that Congress means to allow Bytedance to sell?
Then TikTok would have to sell itself for a lot of money. Grindr sold for about $600 million. TikTok is one of the most successful social media apps in the world, and its price tag would be likely to run into the hundreds of billions.
Given the short time frame in the current bill, an initial public offering might be impractical, meaning ByteDance would need to find a buyer. The most obvious candidate would be one of the big tech firms, which have valuable stock to swap and lots of cash on their balance sheets, access to major capital, experience managing tech platforms, and existing products they’d probably love to integrate with TikTok. The problem is, this might run afoul of the Biden administration’s antitrust approach.
Lina Khan, the chair of the Federal Trade Commission, is skeptical of big companies, and very skeptical of big companies that want to get even bigger by merging. Would she stand by and let a tech giant buy TikTok? And knowing the challenge they’d be likely to face, which tech companies would charge into the fray to make an offer?
This doesn’t mean that no buyer would be found — Bobby Kotick, the former chief executive of Activision, is reportedly already trying to put together a deal. But 180 days isn’t a huge amount of time to find, and finance, a competent new owner. And what would happen if the Chinese government tried to block the sale? The app would have to be shut down in the United States, costing its owners billions, enraging those who use it — and paradoxically making two arguments more compelling: first, that the CCP has nefarious uses for TikTok and, second, that any attempt to separate TikTok from the CCP raises serious First Amendment issues.
All of which makes the future rather murky, even if this bill passes in some form. If I had to wager, I’d say that TikTok will maybe someday be sold. But I wouldn’t necessarily bet on that happening someday soon.
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