TikTok’s CEO makes his case to a hostile Congress

Shou Zi Chew, CEO of the video-sharing app TikTok, appeared before the House Energy and Commerce Committee Thursday, to respond to concerns about the app’s links to the Chinese government, and its data-handling practices. As suggested by a prepared version of his remarks that was released late on Tuesday, Chew focused on the fact that TikTok is used by a number of small businesses in the US, and also promotes freedom of expression. “We do not believe that a ban that hurts American small businesses, damages the country’s economy, silences the voices of over 150 million Americans, and reduces competition in an increasingly concentrated market is the solution to a solvable problem,” Chew’s testimony stated. The TikTok CEO also assured Congress that ByteDance, the app’s Chinese owner, “is not an agent of China or any other country.”

In an interview with the Wall Street Journal last week, Chew argued that banning the app or forcing its owners to sell won’t accomplish anything that the company’s proposed solution, known as Project Texas, doesn’t already achieve. The Committee on Foreign Investment in the US, however, which has the right to block deals in the interest of national security, has rejected TikTok’s proposed solution, and said its Chinese owners must sell the app or it will be permanently banned in the US. As I’ve written previously for CJR, TikTok has spent more than a year on Project Texas, which involves storing data related to US users on US servers belonging to Oracle, a corporate software provider, and appointing a board of US advisors to oversee its recommendation algorithms, another focus of the government’s concern. A spokesperson for China’s Ministry of Foreign Affairs said in a briefing that the US has “failed to produce evidence that Tik Tok threatens US national security.”

The US government may have failed to show that TikTok threatens national security, but the Federal Bureau of Investigations and the Department of Justice are looking into reports that TikTok staffers used the app to surveil several US journalists, including Emily Baker-White, who currently works at Forbes. In a prior role at BuzzFeed, she wrote about TikTok’s handling of data, including the fact that multiple officials with ByteDance had gained access to data on US users. TikTok officials reportedly tried to use the app to track Baker-White’s movements and those of a Financial Times journalist, in an attempt to determine how they got access to the documents they used in their reporting. Baker-White said that a source close to the investigation told Forbes the Department of Justice’s Criminal Division is working with the Office of the U.S. Attorney for the Eastern District of Virginia, and has subpoenaed information from ByteDance.

Meanwhile, a group of senators introduced a bipartisan bill earlier this month that would make it easier for Biden to ban an app like TikTok for foreign security reasons. The proposed legislation, known as the RESTRICT Act, would allow the Department of Commerce to “review, block, and mitigate” software and hardware made by entities in adversarial nations such as China, Iran, and North Korea, if the software or hardware was defined as posing an “undue or unacceptable risk” to Americans. The White House appeared to endorse the bill, based on comments made by Jake Sullivan, a national security adviser. He said in a statement that the bill “presents a systematic framework for addressing technology-based threats to the security and safety of Americans,” and urged Congress to “act quickly to send [it] to the President’s desk.”

Senator Mark Warner, one of the sponsors of the bill, pointed out in a press conference that the law isn’t targeted specifically at TikTok, noting that other foreign companies have been scrutinized by the American government. “Before TikTok, there was Huawei and ZTE and before that there was Kaspersky Labs,” Warner told Forbes. One difference between TikTok and these other companies, however, is that Huawei and ZTE sold hardware, whereas TikTok is a social-media app. That difference could mean that a ban might not stick. Donald Trump issued an executive order banning TikTok in 2020, but as Baker-White notes, the company appealed, and won. TikTok’s lawyers said Trump didn’t have the authority to issue the order because of additions to the Emergency Powers Act known as the Berman Amendments, which were passed by Congress during the Cold War, and were meant to allow movies, books and music to move freely.

According to Bloomberg, TikTok’s senior management has talked about the possibility of separating from its Chinese parent in order to assuage the US government’s concerns about national security. However, such a move is said to be “a last resort,” Bloomberg reported. Analysts say TikTok’s US business could be worth as much as $50 billion, but the Chinese government would have to agree, and that doesn’t seem likely. China changed its laws in 2020 to prevent the sale of artificial-intelligence software, which includes the recommendation algorithms that power TikTok. In his interview with the Journal, Chew declined to say whether ByteDance’s founders were open to selling. The founders own twenty percent of the company, although special shares give them super-voting rights. An additional sixty percent of ByteDance shares are owned by global investors, and the remaining twenty per cent is owned by employees, Chew said.

As part of a public-relations campaign, TikTok invited some of its most powerful users to Washington while the House committee holds its hearings into the app, Politico reported, as part of an “11th hour lobbying blitz.” Dozens of TikTok influencers traveled to Washington and held a press conference on Capitol Hill, and according to Politico, their costs were paid for by the company. At the same time, the Journal reported that a group of Silicon Valley executives opposed to Chinese involvement in the US tech sector, including investor Peter Thiel, planned to meet for a private dinner on Wednesday to talk about China. Leading the effort, the Journal said, is Jacob Helberg, a former Google policy adviser and member of the US-China Economic and Security Review Commission, a congressional research and advisory panel.

In a New York Times column on Monday, Julia Angwin, co-founder of the data-focused media outlet The Markup, argued that banning TikTok is a fool’s errand. “Banning TikTok won’t keep us safe,” she wrote, adding that she wished “all the tech giants that prey on Americans’ data were getting the same scrutiny and enforced accountability.” The TikTok ban, Angwin suggested, is part of a “red scare” involving China. And while critics point out that the company spied on journalists, Angwin noted that American companies have committed similar sins. “Google has fired dozens of employees for data misuse, including obtaining user data,” she says, while Microsoft has admitted to snooping in a blogger’s Hotmail account to see who was leaking internal documents. At Twitter, an ex-employee was convicted of using his access to spy on Saudi dissidents, and a staffer in India used his access to internal data to spy on Indian dissidents.

The Washington Post noted that the plan to force ByteDance to sell TikTok is similar to an earlier move by the Committee for Foreign Investment in the US, which forced a Chinese company called Beijing Kunlun Tech to sell Grindr, the popular gay dating app, because of concerns that the personal data of American users could be used for spying or blackmail. After Grindr was sold to an American-owned company, however, the app’s data was acquired by a conservative Catholic group, and used to identify and track gay priests, an investigation found earlier this month. Buying and selling such personal data is legal in the US. Eric Seufert, a venture investor, said on Twitter that banning TikTok would “represent clumsy, sledgehammer policy, and it wouldn’t address the core of the problem epitomized in TikTok. A Federal privacy law that sets rigorous standards for how data can be aggregated, activated, and utilized is urgently needed.”

The fact that TikTok’s CEO plans to refer to a ban on the app as “silencing speech” is no coincidence. Emily Baker-White reports that the latest attempt could face the same challenges that doomed Trump’s proposed ban in 2020, including the argument that the First Amendment rights of TikTok users supersede the national security implications of the app’s Chinese ownership. Adam Segal, a national security and Chinese policy expert at the Council on Foreign Relations told the Washington Post that “many of the legal issues that TikTok used to block the forced sale under the Trump administration would still be relevant. And there’s still the high possibility that the Chinese wouldn’t allow a sale” for their own national security reasons. In which case, talk about banning the app or forcing its sale could amount to a lot of sound and fury, signifying very little.

Note: This was originally published as the daily newsletter for the Columbia Journalism Review, where I am the chief digital writer