The TikTok Wars

Popular Chinese social media app in the spotlight over user data theft, censorship will either be banned by Trump or bought by Microsoft
August 5, 2020 Updated: August 17, 2020

Commentary

The TikTok story is becoming stranger by the day. On the one hand, it’s part of an ever-expanding war for global influence between Beijing and Washington.

On the other, it’s a litmus test for who we are as a nation.

Weaponized Social Media

President Donald Trump has threatened to ban the China-based social media app unless it’s acquired by a U.S. company. Like the banned Chinese-owned smartphone and network equipment makers Huawei and ZTE, TikTok has been accused of stealing data and user information for exploitation by the Chinese Communist Party (CCP).

The United States fears that the up to 100 million U.S. users of the app would be subject to manipulation by propaganda, censorship, and having their personal data used for advertising purposes without their permission. It also raises their risk, and that of their contacts, to cyberattacks from China.

In other words, Beijing has weaponized social media.

That’s the common thread in the TikTok escapade. It’s now become accepted as fact that any company from China is a potential and perhaps even probable spy for the CCP. TikTok is just one more Trojan horse, according to Secretary of State Mike Pompeo. That’s a reasonable conclusion. But there are more layers to consider, as well as a twist to the deal.

Microsoft Is Not the Answer

For one, Microsoft is the likely buyer of TikTok. But given Microsoft’s deep and decades-old relationship with Beijing, that may not solve the problem. The founders of ByteDance, the China-based owners of TikTok, are themselves Microsoft alumni.

Allowing Microsoft to acquire TikTok may not even solve the problem of protecting user data from harvesting by China. In fact, Microsoft’s lofty position in China is due at least in part to its willingness to bow to Chinese censorship demands. Like many other U.S. companies that give in to the demands of the CCP, Microsoft is a willing partner to the most corrupt human-rights abuser on the planet.

For another, it would certainly add to Microsoft’s power in digital and social media space, giving it tremendous influence over content allowed on TikTok and its millions of U.S. users. The last thing we need is another tech giant accruing more power and influence over the American people.

From a U.S.–China relations perspective, China is accusing the United States of trying to prevent Chinese companies from expanding in the world and prevent China’s rise as a global power. That’s certainly a reasonable assessment on the part of Beijing; it’s probably true to some extent.

However, given the nature of the CCP and its history of abusing Western companies and flouting intellectual property laws, it’s undoubtedly also a wise policy on the part of the United States.

But the twist in the TikTok deal is something very new.

A Piece of the Action?

Trump has recently said that the U.S. Treasury should get a cut of the TikTok sales proceeds. How much money the United States should get from the estimated $50 billion company is unknown. Such a condition of a sale is unheard of in the United States.

Trump’s reasoning is that access to the U.S. market is what allowed TikTok to become so valuable, so any windfall profits should be shared with the U.S. government. By that reasoning, any company in the United States that gets bought or sold may owe a chunk of the sales price to the U.S. Treasury.

From a seller’s perspective, capital gains taxes do just that. But what about the buyers? What should they be required to pay? The federal government isn’t in the position—or shouldn’t be—to get a cut of business deals. That’s what fascist and communist countries do.

But there’s another aspect to the forced sale.

ByteDance is partially owned by U.S. investors. The Microsoft purchase would essentially be the result of the federal government forcing one group of American owners to sell to another American outfit.

Adding to Microsoft’s Power Is Unwise

That’s difficult to justify in a variety of contexts. For instance, Congress is seriously considering breaking up the near-monopolistic tech giants such as Twitter, Facebook, and others because they already have too much power with little or no competition in the marketplace.

Do we want to extend Microsoft’s already long reach, especially given its fealty to Beijing?

Besides that, it’s already the dominant operating system player on the globe. If anything, the federal government should be looking at ways to limit the company’s power and influence in the marketplace.

On the other hand, where does the federal authority to dictate which U.S. company can buy what company stop? Obviously, anti-trust laws provide the necessary authority to protect the U.S. market and consumers.

But, as Huawei demonstrated, national security is also a big factor. In the case of TikTok, both factors are in play. Trump’s demand for “a piece of the action” is, however you look at it, dangerously misguided and contrary to who we are as a country.

James R. Gorrie is the author of “The China Crisis” (Wiley, 2013) and writes on his blog, TheBananaRepublican.com. He is based in Southern California.

Views expressed in this article are the opinions of the author and do not necessarily reflect the views of The Epoch Times.