Millions spent on lobbyists, a billion spent on safeguards. Will it be enough to stay in the United States?
The act of scrolling through your For You feed on TikTok might come with an additional sense of impending doom these days. After years of hand-wringing over the enormously popular app’s ties to China and the potential national security threat they present, it looks like someone is going to do something about it.
TikTok is grappling with an increasingly real prospect of being banned in the United States. This wouldn’t just be a mostly performative prohibition of installing the app on federal or state government-owned devices. It could also be more impactful than the legally questionable ban that former President Donald Trump tried and failed to enact in 2020. The ban TikTok is now facing would forbid its China-based parent company, ByteDance, from doing business in the United States, which would block Apple and Google from hosting the TikTok app in their app stores. It wouldn’t make it illegal for you, the consumer, to use TikTok. It would just make it much harder to do so.
Banning an app is more the provenance of countries like, well, China, which has banned a number of American apps and websites, including Facebook, Instagram, YouTube, and Twitter. It’s also not certain that the US government actually would take such a huge step. But you’ve surely heard that it could happen, and you’re probably wondering if and how it would — or even why it’s necessary.
Seemingly every Big Tech company is facing unprecedented levels of scrutiny these days, but TikTok faces opposition that its peers don’t. At a time when US-Chinese relations aren’t great, TikTok’s popularity is a threat to America’s technological superiority, especially when it comes to the internet. But US lawmakers are much more likely to point to the perceived threat to national security, believing that the Chinese government is using the app to spy on Americans and push harmful content onto them through the app’s powerful yet mysterious For You recommendation algorithm.
To deal with these conflicts, ByteDance has spent over three years negotiating with the Committee on Foreign Investment in the United States, or CFIUS, an inter-agency group that reviews transactions involving foreign parties for national security threats. ByteDance hopes to reach an agreement that would allow TikTok to continue to do business here while minimizing the chances of interference from the Chinese government. While ByteDance says there is a draft agreement with CFIUS, it still hasn’t been finalized. It didn’t help matters when, in the last days of 2022, ByteDance had to admit that some of its employees improperly accessed US citizens’ TikTok data as part of an investigation into leaks to journalists.
ByteDance is spending a lot of money trying to convince detractors that it doesn’t take marching orders from China and that it wouldn’t give the Chinese government US user data or influence US users. The company has spent millions building up and expanding its Washington, DC, presence, and more than $1 billion on “Project Texas,” an effort to rebuild the app on US servers in order to wall it off from ByteDance and China as much as possible, while also promising several layers of independent oversight and transparency.
“We are confident that the proposal under consideration by CFIUS will fully satisfy US national security concerns,” TikTok spokesperson Brooke Oberwetter told Recode.
It looks like 2023 will finally be the year when we find out if ByteDance can convince an increasingly hostile audience that TikTok isn’t a national security threat — or what happens to TikTok if it can’t.
TikTok’s spending big on lobbyists and Project Texas
The only thing that may have grown faster than TikTok’s popularity in the US is the company’s DC presence. ByteDance spent just $270,000 on federal lobbyists in 2019, a year when TikTok agreed to a settlement with the FTC over children’s privacy law violations for a then-record fine of $5.7 million and when lawmakers started to raise concerns over its ties to China. In August of that year, Trump issued his executive order proclaiming TikTok to be a national security threat and, using the International Emergency Economic Powers Act, ordering it to be sold to an American company or banned within 45 days. This obviously didn’t happen: President Joe Biden eventually rescinded the order, which was controversial to say the least, leaving it to CFIUS to make a deal with ByteDance.
TikTok has doubled down on its lobbying efforts in the meantime. The company spent $2.61 million on federal lobbyists in 2020, hiring people with connections to Republican and Democratic lawmakers alike (some were former lawmakers themselves). That spending nearly doubled to $5.18 million in 2021, and it reached $4.28 million in the first three quarters of 2022. In late 2021, TikTok signed a lease for its first DC office. In April 2022, it grabbed an additional floor. That October, it hired Jamal Brown, who was the press secretary for Biden’s presidential campaign and then the deputy press secretary for the Pentagon, as a policy communications director.
“This is kind of the template for how modern tech lobbying goes,” said Dan Auble, senior researcher at Open Secrets, which tracks lobbyist spending. “These companies come on the scene and suddenly start spending substantial amounts of money. And ByteDance has certainly done that.”
While ByteDance has spent a lot on federal lobbying, some of its peers — Meta and Amazon, for instance — still spend a lot more. Meta, for instance, spent over $20 million on lobbying in 2021, and Amazon spent over $19 million. Far more of ByteDance’s money has gone into Project Texas. In its effort to convince regulators that its app is walled off from China and ByteDance, TikTok partnered with Texas-based company Oracle, which is hosting US user data on and running traffic through its cloud infrastructure as well as reviewing the source code for TikTok’s recommendation algorithm and content moderation tools. Access to data and other parts of TikTok will be strictly limited to only essential personnel, and both Oracle and the US government will have some oversight.
TikTok’s Oberwetter said this solution is “under consideration” by CFIUS and that the company believes it’s a “comprehensive package of measures with layers of government and independent oversight to address concerns about TikTok content recommendation and access to US user data, and to ensure that the TikTok software is operating as intended and is free of backdoors that could be used to manipulate the platform.”
On paper, these measures seem like they’d do enough to satisfy CFIUS, which was reportedly very close to finalizing the agreement several months ago. Samm Sacks, a senior fellow at Yale Law School’s Paul Tsai China Center, said the deal seemed to be structured around not trusting China or even ByteDance at all, and building a “set of robust protections” around that.
“For all of the complaints about the [national security] threat, there is a solution that would address it, and you don’t have to take TikTok’s word for it,” Sacks said. “[Project Texas] turns the keys over to somebody else.”
It’s not clear when or even if CFIUS will officially sign off on the plan. In lieu of an agreement, TikTok has delayed its plan to hire consultants who are supposed to monitor its operations and report back to the US government. That’s not a great sign that a deal is imminent, even as TikTok insists that it would satisfy all of CFIUS’s concerns.
TikTok’s detractors aren’t buying it
What’s holding up the federal government? Politics, mostly. For some lawmakers and security officials, there may be nothing ByteDance and TikTok can do to convince them that the app isn’t an arm of the Chinese Communist Party. The lack of trust is understandable. For years, TikTok has been dogged by reports that it isn’t as independent of ByteDance or China as it wants the public to believe. Then, the late December revelation that ByteDance employees accessed TikTok user data to track US-based journalists couldn’t have come at a worse time. It was just the sort of incident lawmakers and agency officials suspicious of ByteDance and TikTok needed to make their case that the app couldn’t be trusted under any circumstance.
TikTok says the matter was an “egregious misuse” of user data by a few employees who violated company policy and are no longer employed there. It claims that the security controls Project Texas is implementing would have prevented this from happening in the first place, since ByteDance employees would not have been able to access that data.
It’s worth pointing out that ByteDance isn’t the first tech company to spy on journalists. As Forbes noted in its piece revealing what ByteDance had done, Uber and Facebook have been accused of similar actions over the years, and Microsoft searched a French blogger’s Hotmail account in 2012 to find out which Microsoft employee was sending him trade secrets. None of those services faced a potential nationwide ban over it, but none of them were owned by a Chinese company, either.
That leaves us with a few ways this could all play out. The most likely is that the CFIUS deal finally goes through. Biden could always pull a Trump and suddenly put out an executive order banning the app, but that’s not likely. It didn’t work when Trump tried it, and Biden isn’t as outwardly hostile to TikTok as his predecessor was. He’s invited TikTok creators to the White House several times, and a nonprofit associated with the Biden administration even has an official TikTok account, which was posting videos touting Biden’s accomplishments as recently as last November.
Not everyone’s counting on CFIUS. Sen. Mark Warner (D-VA), chair of the Senate Intelligence Committee, has expressed plenty of reservations about TikTok, and says he’s losing patience with CFIUS. If a deal can’t be reached, “Congress could soon be forced to step in,” he told Recode. Rather than a ban on just one app or company, however, Warner would like to see legislation that sets standards or rules for any app that falls under a set of criteria, including being owned by a company based in a country of concern. That would include TikTok, but it wouldn’t be limited to it, Warner’s office said.
For some lawmakers, nothing short of a TikTok ban or forcing ByteDance to sell TikTok to an American company will do. Sen. Marco Rubio (R-FL) has been consistent about that for years, and now he’s joined by Rep. Raja Krishnamoorthi (D-IL) and Rep. Mike Gallagher (R-WI), chair of the House’s new select committee on China. Gallagher’s office told Recode that he would support a sale to an American company as long as it included control over TikTok’s algorithm. Gallagher hopes to work across the aisle and with the Biden administration on this, and will be trying to set up a meeting with TikTok “in the coming weeks.” But the Congress member is not budging on his insistence that TikTok can’t operate here while it’s owned by a Chinese company.
“ByteDance must completely divest and there must be an end to Chinese ownership and control of the app,” Gallagher’s office said.
TikTok’s Oberwetter pointed out that banning one app won’t solve broader issues, such as data privacy, security, and harmful content. Legislation that regulates an industry rather than one company within it could kill two birds with one stone. Many bills have been introduced over the years that could do this. None of them have passed.
What a TikTok ban actually means
There are already “TikTok bans” in the US, but they’re very limited and chances are they don’t apply to you unless you’re a government worker or a massive fan of South Dakota’s tourism TikTok account, which was deleted as part of that state’s ban. The ban in the omnibus bill that passed at the end of 2022 and the bans that about half of all states have enacted so far only apply to government-issued devices.
If it came down to truly banning the app for the rest of the country, the most likely path would be to classify TikTok as a national security threat. The government has done this to other Chinese companies, like telecommunications equipment manufacturer Huawei. But banning the sales and use of hardware is more straightforward than an app, which is distributed over a global internet that’s notoriously impossible to regulate or control. And there’s no guarantee it would survive a court challenge.
“Courts do not view this type of legislation kindly, or did not when Trump proposed a similar ban. But that was three years ago and antagonism toward China has only increased in the intervening years,” said Sarah Kreps, director of Cornell University’s Tech Policy Institute.
And again, even if the federal government did ban Apple and Google from hosting TikTok in their app stores, there would probably still be ways to access the platform on the web or in alternate app stores (on Android devices, at least). It would be a lot harder, though, and that could discourage most users from trying.
TikTok has a few things going for it, too. With more than 100 million users in the US, there would surely be outrage if the government banned the app they love and spend hours on every day. TikTok’s user base might skew young, but a lot of them are old enough to vote. And they’re all able to write angry letters to or protest outside the offices of lawmakers who ban the fun video-sharing app they love. Not to mention the businesses that are increasingly relying on TikTok for their digital ad campaigns and might not be thrilled to see it taken away. Lawmakers and FBI directors might not have much use for TikTok, but millions of others do.
For all the money TikTok’s spending to make its case to DC, its most effective advocates might be the people it doesn’t pay at all.