Commentary on Political Economy

Friday, 25 September 2020

 Trump’s TikTok deal would only make the problem worse

The TikTok logo and the U.S. flag. (Florence Lo/Reuters)
Opinion by Josh Rogin
September 25 at 8:33 am AET
President Trump correctly identified the problem presented by Chinese social media app TikTok. But his treasury secretary’s proposed solution does little to protect national security and would establish a terrible precedent in the larger fight to protect Americans’ privacy and freedom of speech from malign Chinese influence.
Chinese tech tools susceptible to Chinese government control and abuse are deeply embedded in the lives of millions of Americans, and that presents a real national security risk. To many, President Trump’s Aug. 6 executive orders announcing severe restrictions on TikTok, owned by Chinese tech giant ByteDance, and WeChat, owned by Chinese tech giant Tencent, seemed like election season China-bashing and a first step toward Chinese-style control of the Internet. For the national security community, curbing the proliferation of apps that are devouring Americans’ private information (under owners who aren’t in a position to disobey Chinese government orders) is long overdue.
While Trump’s national security officials were responsible for elevating the problem, Treasury Secretary Steven Mnuchin chairs the Committee on Foreign Investment in the United States, which must approve any deal. When Mnuchin personally took over the negotiations, the administration’s focus changed from solving the national security problem to coming up with a political and financial win. The latest version of the TikTok deal’s details, which the two sides dispute, solves little and could make the problem worse.
According to the latest reports, ByteDance has agreed to partner with Oracle and Walmart to create a U.S.-based company called TikTok Global, which would be majority-owned by U.S. investors and eventually go public on a U.S. exchange. The U.S. companies would be responsible for protecting the data of U.S. users. ByteDance investors would hold a minority stake.
There are glaring problems with the deal itself. It’s unclear whether TikTok’s algorithm is part of the deal, who would control the app and what “control” even means. The Chinese government has yet to sign off. ByteDance is challenging Trump’s executive order in U.S. courts, so far successfully. Trump has demanded a payoff to the U.S. government he called “key money” — described by others as a $5 billion “education fund” — which ByteDance said it was unaware of.
“The Chinese at least have a plan when they shake down companies, but there’s no plan here. There’s just a headline,” said Derek Scissors, resident scholar at the American Enterprise Institute. “We’ve imported from China the idea that corporations are to be used as political tools, but we are doing it badly.”
Setting aside the ad hoc and incompetent process, the basic structure of the deal is its biggest flaw. Even if the data could be protected, the deal doesn’t address TikTok’s bigger problems. TikTok has been repeatedly caught copying text from millions of iPhones, which is a spying issue. TikTok has also been repeatedly caught censoring content critical of Beijing’s human rights abuses, which is a free-speech issue. ByteDance has denied these practices continue and denies it is susceptible to Chinese government abuse.
But the evidence is overwhelming that the Chinese government uses Chinese tech companies not just to collect Americans’ data but also to shape our information space without our knowledge. TikTok and WeChat are part of Beijing’s efforts to advance its influence on U.S. phone and computer screens.
Chinese officials have long used data from Chinese tech companies to feed algorithms to monitor, influence and repress their own people. Now they are building the capability to do it to Americans, and that must be stopped. And TikTok is a minor challenge when compared with WeChat, which is tied into personal financial and payment systems and is used for communication by millions of Chinese Americans.
“The competition in the tech sphere over such core values as free expression and privacy requires that democracies vigorously defend principles of transparency and democratic accountability,” said Christopher Walker, vice president for studies and analysis at the National Endowment for Democracy. “All-encompassing global platforms such as WeChat and TikTok are a part of this equation.”
This doesn’t mean the United States should ban every Chinese app forever or build a balkanized Internet like Beijing has done. We can’t become the thing we are fighting. But the U.S. government must focus on establishing principles for foreign tech companies to follow, not demand payoffs and ad hoc arrangements. And if the Treasury Department must be in charge, then the treasury secretary must put national security ahead of filling Wall Street’s coffers.
The Trump administration has done the country a service by waking up regular Americans to the true and important idea that China’s tech companies are instruments of the Chinese Communist Party’s strategy against our values and our interests and that we must respond. Perhaps the next administration will respond in a way that actually solves the problem.

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