TikTok Panic Threatens Speech

Will Duffield

TikTok is a social media app that hosts short‐​form videos and serves them to users via algorithm. Because TikTok is owned by the Chinese tech firm ByteDance, its surging popularity with teenagers and young adults in America has prompted concerns that it could be used for illicit data gathering and influence operations. These concerns, and a broader crisis of confidence in American culture, have launched host of proposals to ban TikTok. A ban would frustrate the many millions of Americans who use TikTok to express themselves, and efforts to crush the app risk giving the government new powers to police speech across the internet.

TikTok’s Project Texas aims to assuage concerns about ByteDance’s ownership of the platform by creating an American subsidiary called TikTok U.S. Data Security Inc.. The subsidiary will own American user data and manage TikTok’s deployment on Oracle’s cloud, where Oracle can monitor TikTok’s algorithm. Although Project Texas adequately addresses concerns that TikTok’s algorithm could be re‐​tuned to spread propaganda, worries that the CCP might use TikTok to gather information about Americans for nefarious purposes are harder to dispel.

A Foreign Crisis?

Like many apps, TikTok collects data from user devices, including users’ locations and stored media. This data is necessary to make TikTok work, but it can also be misused. Unlike most other apps, TikTok’s parent company ByteDance is headquartered in China, where it is subject to China’s National Intelligence Law. Under the law, China can require its citizens and corporations to provide data relevant to intelligence work.

There isn’t any evidence that TikTok is spying for the CCP. Its only demonstrable misuse of customer data – tracking employees leaking information to journalists – are reminiscent of Travis Kalanick’s excesses, not the KGB’s. Nevertheless, the National Intelligence Law makes concerns about data gathering hard to fully allay. So long as TikTok is owned by ByteDance, the law might be invoked to compel ByteDance to circumvent or undermine Project Texas, and data is notoriously leaky.

Other countries have found themselves in similar situations with American tech firms and America’s National Security Letter process. This Patriot Act authority allows the FBI to demand data from private firms without approval by a court, and imposes a gag order on the letter’s recipient. The Ninth Circuit recently held that Twitter could not even disclose the number of NSLs that it had received. This power makes some foreigners understandably nervous about doing business with American tech firms. However, this is the first time America has found itself on the receiving end of such a power.

Thus, the concern that China’s NIL will be used to access American TikTok user’s data directly implicates America’s place in the global order it has created. It has created, in a word, a crisis. It is not a national security crisis, or, in any reasonable likelihood, a data security crisis down the road. China has countless ways of accessing or simply purchasing whatever data it might gather through TikTok. Instead, however, TikTok’s rise has spurred a domestic crisis of confidence in the open internet and an American‐​led liberal order.

Before TikTok, China’s NIL didn’t matter to America because few Americans used Chinese apps or websites. In a sense, TikTok, and a few other firms such as consumer drone maker DJI, are tragic success stories. They have succeeded in offering novel, useful products to customers worldwide despite growing under the CCP, yet their success makes them geopolitical footballs. American legislators see a threat in their products’ appearance in American homes, while China won’t allow them to become truly global companies, free from the cloud government influence. TikTok isn’t a small founder‐​run operation like Telegram, which while born in Russia, escaped its orbit and is now registered in the Cayman Islands and headquartered in Dubai.

TikTok’s success is no reason to throw out the system that allowed it to grow. The vast majority of globally successful companies are still American. An international order that allows the free exchange of apps and web services benefits America far more than a splinternet of national champions. Banning TikTok will invite reciprocal action and opportunistic demands for divestment and local spin‐​offs of US firms. America has many more global internet giants to lose than China.

Banning TikTok will also do little to curtail Chinese access to Americans’ data. TikTok isn’t collecting anything unique. Absent limits on domestic data collection and resale, banning TikTok or other Chinese apps amounts to requiring China to buy Americans’ data on the open market like everyone else. China can also simply continue to steal data far more important than anything collected by TikTok, such as in the 22 million federal employee background check records stolen in the 2015 Office of Personnel management data breach or the credit records of 145 million Americans stolen in the 2017 Equifax hack. The cure, then, is both homeopathic and worse than the disease.

Different Flavored Bans

However, if TikTok is banned, how it is banned matters, both for American firms abroad and American liberties at home. The most likely route to a ban is CFIUS review. CFIUS, the Committee on Foreign Investment in the United States, has the power to place conditions on, reject, or even unwind the acquisition of American firms by foreign buyers.

In 2019, CFIUS ordered Chinese firm Kunlun Tech to sell gay dating app Grindr, reversing its 2018 acquisition of the American startup. CFIUS has the power to force ByteDance to sell TikTok because TikTok is a product of ByteDance’s 2017 acquisition of American short form video app Music​.ly. Project Texas is a product of the committee’s negotiations with TikTok, but while it once seemed capable of assuaging their concerns, a divestment order requiring ByteDance to sell its stake in the platform now seems more likely.

While this is not technically the same as banning TikTok, it will set in motion a chain of events likely to lead to the app’s demise. China is unlikely to allow its unicorn to be expropriated by America, and will block any sale to American buyers. In this situation, ByteDance and TikTok will eventually be driven out of the country by mounting civil fines for failing to comply with the divestment order. A CFIUS divestment order doesn’t require congressional action beyond the hostility displayed in last month’s hearing with TikTok CEO Shou Zi, making it the most likely path to a ban. While CFIUS action doesn’t further empower government, unwinding an acquisition of this size six years after the fact would be unprecedented, and would certainly prompt Chinese efforts to punish American firms. Although American social media platforms are banned in China, many American tech firms manufacture products there, so the CCP has plenty of potential leverage if treatment of TikTok prompts a tit‐​for‐​tat spat.

However, if CFIUS fails to dispatch TikTok, there are even worse solutions to the crisis waiting in the wings. Two bills have been introduced that would expand the government’s power to police speech and speech infrastructure to get at TikTok.

Proposed Legislation

In the Senate, Senator Mark Warner’s RESTRICT Act would empower the Secretary of Commerce to prohibit or demand “mitigation measures” from almost any service provider in the commutations stack that touches an adversary nation — Russia, China, Iran, North Korea, Venezuela, and Cuba, to start. It initially attracted cosponsors on both sides of the aisle but has since received criticism from civil liberties organizations and the right. Jennifer Huddleston and I published an in‐​depth analysis of RESTRICT with our colleagues in the Trade Policy Center titled “TikTok Legislation Is a Blank Check for Government Encroachment Upon Americans’ Wealth, Privacy, and Safety”. We write that RESTRICT “raises troubling and far‐​reaching concerns for the First Amendment, international commerce, technology, privacy, and separation of powers”. Thankfully, some of its early proponents have already walked back their support.

Senator Josh Hawley’s proposal is the cleanest legislative solution, but runs into Bill of Attainder issues (the Constitution prohibits legislation targeting particular people or firms) because it waives the Berman Amendment specifically for action relating to TikTok. Montana’s TikTok ban, currently awaiting Governor Gianforte’s signature or veto, runs into the same problem and more. SB 419 would fine app stores that offer TikTok to Montanans $10,000 each time the app is downloaded, likely running afoul of the dormant commerce clause and the First Amendment.

In Congress, H.R. 1153, the DATA Act, is more limited than RESTRICT, but still gives the government new powers to sanction foreign election interference. The DATA Act would modify the Berman Amendment, a limit on the International Emergency Economic Powers Act, or IEEPA, that prevents it from being used to ban “informational materials”. IEEPA gives the president wide latitude to sanction international trade during national emergencies, but, thanks to the Berman Amendment, it can’t block the import (or export) of speech. DATA would change this by exempting “sensitive personal information” from the Berman Amendment. Although this sounds narrow, it includes private “electronic communications, including email, messaging, or chat communications”, effectively excluding chat applications such as Telegram from the Berman Amendment’s protections.

When President Donald Trump tried to ban TikTok in 2020 he used IEEPA to prohibit transactions with ByteDance and its subsidiaries. TikTok sued, and the US District Court for the District of Columbia issued a preliminary injunction against the ban in part because the Berman Amendment made it likely that TikTok’s challenge would succeed. President Biden revoked Trump’s ban order before the matter could be litigated further.

Losing our Religion

The Berman Amendment isn’t just a bar to banning TikTok — it’s also a time capsule. In 1988 when the amendment was passed, America felt much rosier about its place in the world.

America was so sure of its cultural advantages that it specifically exempted the exchange of ideas from IEEPA’s sanctions regime. In 1994, flush from the collapse of the USSR, Congress expanded the amendment to include the internet. It is hard to see the America that passed and extended the Berman Amendment banning TikTok. And yet, despite the continuing dominance of American culture and technology platforms, our attitude toward the free exchange of ideas has shifted. We no longer appreciate our strengths.

China recognizes our cultural power; indeed, this is the main reason the CCP bans TikTok along with western social media. It’s all filled with American speech, ideas, and culture, a glowing digital billboard for freedom. Senator Rand Paul made note of this quality in a recent op‐​ed, writing, “Go to TikTok and search for videos advocating Taiwan’s independence, criticism of Chinese Premier Xi Jinping. Videos are all over TikTok that are critical of official Chinese positions. That’s why TikTok is banned in China.” Unfortunately, Sen. Paul is lonely in this recognition. Most elites on the left and right respectively treat Russian and Chinese propaganda as hyper‐​persuasive despite all evidence to the contrary, and ignore the power of American speech. This faltering belief in American values and the value of American culture is a far greater threat than TikTok.

Instead of searching for a Goldilocks method of banning TikTok without further empowering the government, inviting blowback, or violating the constitution, America should lean into its advantages and learn to live with their costs.

This doesn’t mean doing nothing, but fiddling with the Berman Amendment is bound to give government new ways to censor speech it deems “foreign disinformation” and “election interference”. The Twitter Files and repeated disclosures by platform representatives have made it clear that the government already pushes platforms to remove too much in the name of national security. Instead of banning TikTok, we could prohibit service members and government employees from installing a wide variety of foreign apps on their personal devices, condition approval of ByteDance’s acquisition of Music​.ly on data collection limits, or impose industry‐​wide rules about what data platforms can gather in the first place.

Regardless of how a ban might be achieved, TikTok simply isn’t uniquely concerning enough to justify compromising the open international market for apps and web services or jettisoning our deeper commitments to the free flow of information. America remains dominant in the production of culture and technology. TikTok doesn’t change that, but our reactions to it could.

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