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TikTok Train Wreck: Current Deal Solves Nothing and Won't Hold

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TikTok Train Wreck: Current Deal Solves Nothing and Won't Hold

Tweets of the Week on China + HBO's The Wire, The Onion on Xi, and a Cpop BLACKPINK Cover

Jordan Schneider
Sep 21, 2020
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TikTok Train Wreck: Current Deal Solves Nothing and Won't Hold

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The current deal does not solve any of the concerns I initially had about TikTok’s US operations.

TikTok’s sort of sale to Oracle + Walmart doesn’t do anything to address algorithmic manipulation of political content, access to American’s data, or content moderation. As this recent ASPI report laid out in painstaking detail, Bytedance isn’t a company that can be trusted to live up to the expectations America should have for its social media giants, much less reject demands the Chinese government may put on it. My favorite recent example of this came when, after filing a lawsuit to challenge the CFIUS ruling, Bytedance promised that it would “strictly follow" (严格遵守 ) Beijing’s new export controls, even though their implementation could have potentially have cost them a $50bn payout. [Full disclosure, I received a small honorarium for reviewing the ASPI report prior to its publication.]

There’s a real chance the current deal is going to blow up again once the right-wing media ecosystem gets a sense of how big a cave this is.

Of course, Trump has caved on China-related issues in the past. He gave ZTE a reprieve on account of “too many jobs in China lost,” but no-one outside of China tech nerd circles has heard of ZTE. “Caving” on phase one of the trade deal also got a pass because there was a broad political constituency who wanted tariffs lifted. But on TikTok, the fundamental problem with Bytedance’s political position is that there isn’t a congealed constituency in favor of continued Chinese ownership and operations. On one side, you have US tech giants and China hawk Congresspeople hungry for new issues to ‘get tough’ on. While Oracle’s connection with Trump may have been enough to win his approval for a few days, their lobbyists won’t be able to keep Congress quiet. What’s more, TikTok can’t really pull the hard line shenanigans Uber did to politically mobilize its user-base (see: De-Blasio Mode) because its users don’t care if Microsoft operates its app or not.

Senators across the aisle aren’t going to roll over, as in this environment there is no incentive to be ‘soft on China.’ Once the media narrative starts to portraying Trump as ‘weak,’ the one thing he can’t stand being called, he’ll blow this deal up. I’d give the Oracle + Wal-Mart deal only a one in two chance of getting through, more likely now though than late last week as the Supreme Court fight will increasingly take up the news cycle.

If Trump says no deal, I’d say there’s a 40% chance it actually sells its business + data + algorithm to someone like Microsoft, and a 60% chance it just ceases operating in the US thanks to Beijing vetoing the type of sale that would make Congress happy.

America’s the real loser here. Up until TikTok, CFIUS reviews hadn’t really faced presidents willing to overrule national security concerns of foreign acquisitions thanks to corporate lobbying. But now, on top of everything else Trump has done, we get a last-minute sullying of yet another US national security institution.

The TikTok situation could have served as a forcing function to create credible standards for social media companies, both foreign and domestic, to secure their users’ data and provide transparency into their algorithms. If the current deal stands, we’re just supposed to trust that Oracle will do internal checks on TikTok’s source code which they A. have a financial incentive not to question and B. won’t understand in the slightest as Bytedance has committed to not transfer its technology.

It used to be nice to think that in the 21st century, American crony capitalism was limited to small-time stuff like the occasional hundred grand in a Congressman’s freezer. But even in 2013, Secretary Kerry found it hard to credibly cajole overseas in light of a government shutdown.

Twitter avatar for @jordanschnyc
Jordan Schneider 司马乔丹 @jordanschnyc
From @Andrew_Imbrie ‘s new book
Image
3:02 PM ∙ Sep 21, 2020

Thanks to the Trump administration’s behavior, US diplomats trying to preach clean government won’t face “quizzical looks,” they’ll face belly laughs. It will take years of spotless governance before we’re able to hold our heads up again on these issues.

Lastly, with all the talk of Trump getting a likely non-existent $5bn payoff, I wonder what Chinese regulators would demand from Bytedance in exchange for letting them sell the source code. Double secret party control? 10,000 more party member hires?

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China Twitter Tweets of the Week

Twitter avatar for @MattSchrader_DC
Matt Schrader @MattSchrader_DC
Regular reminder of this, the most prescient piece on geopolitics ever written.
theonion.comReport: China To Overtake U.S. As World’s Biggest Asshole By 2020WASHINGTON—According to a new report released Monday by a panel of top economists and social scientists, the People's Republic of China will overtake the United States as the world's dominant asshole by the year 2020.
4:17 PM ∙ Sep 18, 2020
903Likes308Retweets
Twitter avatar for @ShiraOvide
Shira Ovide @ShiraOvide
Walmart has the correct take on this Tiktok thing. Give Walmart a tech newsletter. nyti.ms/3iObZ0J
Image
11:07 PM ∙ Sep 20, 2020
870Likes232Retweets
Twitter avatar for @nujabrol
Anuj Abrol @nujabrol
If Kanye he was pitching Silicon Valley on YeCombinator, here’s how I’d frame his narrative I present the @kanyewest pitch deck
10:08 PM ∙ Sep 20, 2020
3,054Likes791Retweets

Thread. Anuj weaves in the legendary ‘JESUS TOK’ tweet.

Twitter avatar for @garrytan
Garry Tan @garrytan
In the U.S., 81% of EE grad students are international, 79% in CS are, and in most eng and tech fields, they are majority. Our immigration policy is reverse brain drain. Federal state and local policy are all working in lock step to kill the Golden Goose
techcrunch.comGangster capitalism and the American theft of Chinese innovation – TechCrunchIt used to be “easy” to tell the American and Chinese economies apart. One was innovative, one made clones. One was a free market while the other demanded payments to a political party and its leadership, a corrupt wealth generating scam that by some estimates has netted top leaders billions of dol…
8:56 PM ∙ Sep 20, 2020
124Likes27Retweets
Twitter avatar for @patrick_lozada
Patrick Lozada @patrick_lozada
I know we're all doing WeChat injunction hot takes, but can we pause and acknowledge that Elaine Peng seems like a very nice lady doing very nice things for people in her community? courtlistener.com/recap/gov.usco…
Image
2:26 AM ∙ Sep 21, 2020
Twitter avatar for @bokane
Brendan O'Kane @bokane
Been rewatching The Wire with Chinese subtitles (mostly pretty impressive!) and I’m struck by how much of the show is ultimately about “relationships” (an untranslatable word that roughly means 关系).
5:46 PM ∙ Sep 20, 2020
177Likes10Retweets
Twitter avatar for @bokane
Brendan O'Kane @bokane
(It really is striking to see how readily the back-scratching and favor-trading goes into Chinese, usually in terms of “欠我一個人情” / “owing me one.” Almost as if all of the exoticizing discourse about 关系 has always been total bullshit or something.)
5:54 PM ∙ Sep 20, 2020
Twitter avatar for @jordanschnyc
Jordan Schneider 司马乔丹 @jordanschnyc
TIL a core Bytedance value is freedom of expression! Just curious, what happens when you search 言论自由 on Douyin? @devlewis18 @LichtSpektrum ?
Twitter avatar for @v_ness
Vanessa Pappas @v_ness
@mosseri We agree that this type of ban would be bad for the industry. We invite Facebook and Instagram to publicly join our challenge and support our litigation. This is a moment to put aside our competition and focus on core principles like freedom of expression and due process of law.
6:19 PM ∙ Sep 18, 2020

Even if you don’t quite have freedom of expression on Douyin, you still get dope content:

Twitter avatar for @DailyCpop
Daily C-pop News @DailyCpop
#DuanAojuan sings a sweet cover of BLACKPINK and Selena Gomez's latest single #IceCream to start your morning!
Image
12:01 AM ∙ Sep 20, 2020
36Likes10Retweets

Lastly, in researching the article above, I came across this colorized snapshot from 1920 of Teapot Rock, the namesake of the oil field that President Harding’s Secretary of the Interior loaned out to Sinclair Oil in return for kickbacks. Gorgeous!

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TikTok Train Wreck: Current Deal Solves Nothing and Won't Hold

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