TikTok’s Links to China Demand a Serious U.S. Response

The battle over TikTok has become a proxy for worsening U.S.-Chinese relations and the anxieties generated by that clash. Shou Chew, TikTok’s chief executive officer, was grilled for five hours last month by members of Congress concerned primarily about potential Chinese government interference in the company’s U.S. operations. The hearing took place amid growing fear in Congress and the Biden Administration that a Chinese technology company can’t be relied on to protect user privacy and may be exploited by the Chinese government to disrupt our democratic process. While the challenge posed by TikTok is clear, the way forward is not.

Some members of Congress have called for TikTok to be banned in the U.S. The chair of the House Energy and Commerce Committee, Cathy McMorris Rodgers (R-WA), led the hearing and set the tone. “We do not trust TikTok will ever embrace American values,” Rodgers said.

But expecting TikTok to “embrace American values” creates an inappropriate and unreasonable standard. If we expect every foreign company operating in the U.S. to embrace “American values” it’s not hard to imagine that other governments will demand the same.

What’s more, banning TikTok would undermine the historic U.S. commitment to free speech. As the ACLU and 15 other rights organizations warned, “If the government were to intervene to ban TikTok entirely, it would impair the rights of citizens to communicate in a manner of their choosing, giving rise to significant First Amendment concerns.” As Justice William O. Douglas said 70 years ago in a speech, “Restriction of free thought and free speech is the most dangerous of all subversions. It is the one un-American act that could most easily defeat us.”

Banning TikTok also would ignore the platform’s huge popularity. In fewer than six years, it has attracted more than 150 million U.S. users. Banning such a popular platform would be politically fraught. A recent Washington Post poll found that while there is considerable support for banning TikTok, especially among older Republicans, younger people strongly reject such a ban. As Commerce Secretary Gina Raimondo recently told Bloomberg about the prospect of a ban, “The politician in me thinks you’re going to literally lose every voter under 35, forever.”

Those who defend TikTok argue that it poses no greater threat to user privacy than any other social media company. This vastly underestimates the official constraints under which Chinese companies, like TikTok’s corporate parent, ByteDance, operate. Chinese companies must abide by laws such as the 2017 National Intelligence Law, and the 2014 Counter-Espionage Law, which give state agencies broad authority to demand disclosure of data in connection with investigations. Chinese authorities also have broad authority to cancel licenses, and conduct sweeping regulatory and tax investigations. In recent years, Chinese authorities have introduced a range of measures aimed at tightening control over major technology companies.

At last month’s hearing, Mr. Chew tried repeatedly to downplay the potential of Chinese government interference, asserting that ByteDance is a private company “not owned or controlled by the Chinese government.” But accepting the Chinese government’s promise never to demand that companies hand over user information is “similar to their argument that they don’t censor the Internet,” said Lokman Tsui, a fellow at the Citizen Lab at the University of Toronto, who called the Chinese government’s promise “preposterous and laughable.”

A second concern is that the Chinese government will use TikTok’s massive presence in the U.S. to promote Chinese propaganda. In November 2022, FBI Director Christopher Wray told members of Congress that “the Chinese government could use [TikTok] to control data collection on millions of users or control the recommendation algorithm, which could be used for influence operations.”

A recent report by four Australian academic researchers submitted to the Australian Senate Select Committee on Foreign Interference through Social Media concluded that ByteDance is “intertwined” with the Chinese government. “TikTok provides Beijing with the latent capability to weaponize the platform by suppressing, amplifying, and otherwise calibrating narratives,” the researchers said. Their report concluded that “in the absence of policy action, TikTok could be the next challenge to democracies’ resilience against authoritarian interference.”

TikTok’s inclination to censor has been widely reported—for example, in connection with its suppression of criticism of Chinese government leaders, as well as information relating to the human rights abuses in Xinjiang province. Forbes reported that ByteDance employees also surveilled several Forbes journalists who were reporting on the company, improperly gaining access to their IP addresses and user data. At last week’s hearing, when Chew was asked whether the Chinese government had compelled ByteDance to spy on American journalists, at first the executive said no, but when asked again, he said, “I don’t think ‘spying’ is the right way to describe it.”

Given these concerns, the best way forward would be for ByteDance to sell TikTok to a buyer outside of Chinese government control. Given the company’s remarkable growth, popularity, and market value, finding a buyer should be possible, despite the surrounding controversy. But hours before last month’s hearing in Washington, a Chinese Commerce Ministry spokeswoman said at a news conference in Beijing that the Chinese government would “firmly oppose” the sale of the app. Forcing such a transaction, she added, would “seriously undermine the confidence of investors from various countries, including China, to invest in the United States.” This declaration only underscored the government’s apparent self-image as a major player in the TikTok drama and the difficulty in devising a resolution.

As a starting point, the Biden Administration should press big U.S. financial firms that have invested in ByteDance to support a sale. These firms include Sequoia Capital, the Carlyle Group, BlackRock, and Kohlberg, Kravis and Roberts. ByteDance itself acknowledges that 60 percent of the company’s shares are owned by non-Chinese investors. The administration should convene these investment giants and urge them to use whatever influence they have with ByteDance and with Chinese officials to facilitate such a sale.

Subscribe to the Ethical Systems newsletter

If those efforts fail, Congress and the administration may have no choice but to tighten current restrictions on TikTok. On March 7, Sen. Mark Warner (D-VA) and Sen. John Thune (R-SD), along with 10 other senators, introduced a bill that would authorize the Commerce Department strengthen the U.S. government’s power to address discrete security risks posed by individual online transactions, and systemic risks posed by certain classes of transactions involving countries of concern in sensitive technology sectors. This bill is gaining attention in Congress and has White House support.

Another broader legislative proposal, backed by Representatives Cathy Rodgers (R-Wash) Jan Schakowsky (D-IL) and Gus Bilirakis (R-FL) would apply to TikTok and all other social media apps, limiting how much data companies can collect on people online. If this provision were enacted, it would force TikTok, and all other social media companies operating in the U.S., to collect far less data and reduce their ability to shape the flow of information through algorithmic amplification.

Another proposal by Senators Richard Blumenthal (D-CT) and Jerry Moran (R-KS) would expedite the investigation by the Committee on Foreign Investment in the United States (CFIUS) into TikTok which also could mitigate security risks without denying users access to the platform.

The administration also should strengthen the terms of TikTok’s plan to store U.S. user data on servers owned and operated by the American networking giant Oracle and located in the U.S. The White House could impose new reporting requirements enabling Oracle to monitor how TikTok’s algorithm recommends content, another possible hedge against the platform being used to spread Chinese government disinformation.

And finally, as my colleague Paul Barrett has recommended, Congress should authorize funding for the Federal Trade Commission to establish a digital safety unit to regulate social media companies like TikTok. It would ensure that they maintain procedurally adequate content moderation systems and establish new transparency requirements compelling them to disclose how their algorithms rank, recommend, and remove content.

Regulating a major social media company like TikTok would not be easy. But the complexity of the task does not make it unwise, let alone unnecessary. TikTok’s parent company being headquartered in China makes it different from its rivals and demand that it be treated differently.

Michael Posner is the Jerome Kohlberg professor of ethics and finance at NYU Stern School of Business and director of the Center for Business and Human Rights. Follow him on Twitter @mikehposner.

Reprinted with permission from Forbes.