TikTok, capitalism, and whose side are you on?
A 50-0 vote in a House committee to advance a bill that would require the divestment of TikTok from its Chinese parent company or ban it from the United States is dividing political and technology circles. Undergirding the debate is a mixture of virtue signaling (being tough on a geopolitical adversary), privacy concerns (Chinese government laws relating to corporate data are ironclad), and very reasonable concerns about how TikTok could be used to influence the upcoming elections in the United States, not to mention more mundane political life.
The issue is making for odd bedfellows. My least favorite FCC Commissioner Brendan Carr is one of the leading voices contra-TikTok for example, while businessman Elon Musk has come out in favor of TikTok being left alone. Elsewhere, conservative venture capitalist Keith Rabois has pledged to not fund any Republican who doesn’t support a ban, while former President Donald Trump has flip-flopped on his former support of kicking the app out.
Gisting everyone’s views down to the nub, here’s where things stand:
TikTok is massively popular in the United States, but has shown that it cannot be trusted with the data it collects, as it is owned by a Chinese company replete with the standard Chinese Communist Party committee inside of it. Chinese law makes Bytedance data accessible by the Chinese government at its whim.
TikTok has used its platform to surveil journalists, and has made lots of noise about not sharing data with its parent company. Even though it has.
From a realpolitik perspective, there’s no reason to allow an app owned by a Chinese company that collects data on American citizens and can tinker with its algorithm to amplify, or suppress perspectives, news, and other content to exist on our shores. (Noah Smith and Matthew Yglesias have made this point well, arguing that the propoganda issue is the biggest concern at play. I don’t disagree.)
Freedom of speech concerns here are minimal from my perspective as we’re discussing a Singapore-based subsidiary of a mainland Chinese company. There are myriad limits on Chinese business if you are a company based in the United States. Partially echoing unilateral restrictions is not tyranny. Instead, it’s an admission that while having an open economy is nearly always the best way to run a nation, allowing nonreciprocal access to, and influence of, your citizens by apps owned by companies directly influenced by aggressive foreign adversaries is not mandatory.
And, finally, the people in favor of keeping TikTok on our shores are often those with direct financial concerns. Former President Trump backtracked on his sharply hawkish views on TikTok after meeting with a conservative donor who has a massive stake in the enterprise. Quelle surprise. Meanwhile, Musk’s comments can be dismissed given his need to maintain winsome relations with the Chinese government given his company’s massive operation in the country.
What keeps smacking me in the head is that all this could be resolved with a divestiture; there’s no need for a ban, TikTok just needs to find a new corporate home. That’s not impossible. In fact, when it comes to bowing to corporate structures that are designed to make a country’s government feel good, Chinese firms should be well prepared; after all, if you want to do business in China, get ready to form a joint operation with a local player who will own the majority of the operations in question.
So why not simply divest TikTok and collect a few hundred billion in the process? That’s the question that those in favor of allowing TikTok the hugely powerful perch it has inside American life as-is have to answer. From where I sit, the answer is obvious: TikTok is a business asset nearly without peer, but it’s also a window into, and potential lever against American life, which is too tempting a tool for China’s government to let slip. So it doesn’t want to.
Capitalism is good and I am all in favor of businesses succeeding, but when one side of a set of nation-state trading partners isn’t playing fair there’s little need to decide that the general outlines of our economic system are more important than our principals — and winning.
Featured image via Solen Feyissa.