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Wednesday, April 10, 2024

The Messy Feud Over Who Controls TikTok

In August, Trump signed executive orders that labeled both TikTok and another Chinese-owned app, WeChat, as national security threats. Unless they could broker a deal that would transfer majority control of the services over to American tech partners, both apps would be banned from the United States. The scramble that followed involved multiple competing companies and interests and raised the already heightened tensions between two feuding countries.

This week on Gadget Lab, WIRED staff writer Louise Matsakis joins us to talk about TikTok, WeChat, and how this fight might shape diplomatic relations between the US and China for years to come.

Show Notes

Read Louise’s coverage of the TikTok controversies here and here.


Louise recommends the book The Overstory, by Richard Powers. Lauren recommends the show Schitt’s Creek. Mike recommends SF Urban Hiker’s Stairway Project and also just going on a hike yourself.

Louise Matsakis can be found on Twitter @lmatsakis. Lauren Goode is @LaurenGoode. Michael Calore is @snackfight. Bling the main hotline at @GadgetLab. The show is produced by Boone Ashworth (@booneashworth). Our executive producer is Alex Kapelman (@alexkapelman). Our theme music is by Solar Keys.

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Michael Calore: Lauren.

Lauren Goode: Mike.

MC: Lauren, are you on TikTok?

LG: I am on TikTok. Unsurprisingly, it was my young niece who got me into TikTok. I don't really post to it though, and I think my account's private. Are you on TikTok?

MC: That's a hard no, as we all know. But I guess it's a good thing that you actually downloaded the app on your phone, because it's fate hangs in the balance, which is what we are going to be talking about today.

LG: Exciting.

[Gadget Lab intro theme music]

MC: Hi everyone. Welcome to Gadget Lab. I am Michael Calore, a senior editor at WIRED, and I am joined remotely by my cohost, WIRED senior writer Lauren Goode.

LG: I think you mean aspiring TikTok star, Lauren Goode.

MC: Send her all your sponsored content requests. We are also joined this week by WIRED staff writer Louise Matsakis. Louise, welcome back to the show.

Louise Matsakis: Hey, thanks for having me again.

MC: Of course. Today we are talking about TikTok. Since the app is owned by the Chinese company ByteDance, there has been some concern that it collects data about American users and shares it with Chinese intelligence services. So in August, President Trump signed an executive order labeling both TikTok and another Chinese owned app, WeChat, national security threats—unless they could broker a deal that would transfer control over to American tech partners. And if they couldn't, both apps would be banned in the United States.

That deal has not exactly worked out. We'll get into the issues about data collection and what China actually wants later in the show. But first, let's talk about the apps themselves, and let's start with TikTok. Now, Louise, we talked about TikTok when you came on the show back in July, and please, if you can, quickly take us through the history up to this moment.

LM: OK. So the history with TikTok starts a few years ago when this Chinese company called ByteDance, which is sort of like, I hate this analogy, but maybe the Facebook of China in a lot of ways. They bought an app called Musically, which was this lip-syncing app popular among teens and tweens. So a couple of years later, as relations between the US and China started to heat up, Congress took an interest in TikTok, and they said, "Hey, millions of Americans are using this app. Maybe we should be concerned about that." For a while, it was sort of a little bit of interest here or there, some senators put out some statements, but there wasn't really too much happening.

And then the pandemic happened. So once the pandemic happened, obviously relations between the US and China completely exploded, and the Trump administration decided that TikTok would be a great pawn to use in relations with China, essentially. So as you said, Trump signed these executive orders, and then there was this great scramble to buy TikTok. So a bunch of companies express interest, from Google to Twitter to Microsoft, which for a while, seemed like the main contender.

But then TikTok decided to reject the offer from Microsoft, and now basically it has decided to go with Oracle and Walmart. So Oracle and Walmart have said that they're going to make an investment in TikTok, and that's supposed to resolve the national security concerns raised by the companies' Chinese ownership. However, as you mentioned, this deal has sort of fallen apart, and there's a lot of confusion. I'm sure you have plenty of questions, but that's a lot. I'll leave it there to start.

LG: Louise, I'm wondering what the involvement of companies like Oracle, Microsoft, and Walmart say about the way this deal is going. Because you would think it would be some of the younger social media companies that would raise their hands and say, "This is a natural fit." But we're talking about these stalwart companies at this point. So what does that say about how this has all gone down?

LM: Yeah. So let's take them one by one. So I think it makes sense for Microsoft here, because unlike Google, Facebook, and Twitter, some of these bigger companies, they have not gotten a lot of interest from regulators about antitrust concerns. So Microsoft is not one of the companies that a lot of people are worried about having too much power right now, for better or worse. So I think Microsoft realized that there wasn't going to be as much scrutiny if they went for it, unlike Facebook. I think that if Facebook said, "Hey, we want to buy TikTok," The Trump administration would be like, "Absolutely not. You already have two of the largest social networks in the country. We're not going to give you a third to resolve the national security concerns."

Walmart might seem a little weird here, however, I think that they're trying to compete with Amazon. And I think that they're looking at, in China, livestreaming ecommerce is really popular. A lot of people buy stuff from social media apps. So I think Walmart wants to replicate that with TikTok, potentially. Then Oracle, the sleepiest, most boring dad-tech company, what the hell are they going to do with TikTok? Great question. I think it's worth mentioning that Oracle is a big ally of the president. So I think that's a big reason why they're involved here, is that Trump already likes them.

Their CEO served on his transition committee. One of their cofounders is a big Trump donor; he actually hosted a fundraiser for the president earlier this year. So that, I think, looks even worse given how much of a circus this has been, that they went with an ally, but I think that's the reason that they landed on Oracle here. It's not a company that has antitrust concerns about getting involved with TikTok, and it's a company that the president already likes. Super weird, but that's where we are at the moment.

LG: You have to wonder how many teens and tweens on TikTok know what Oracle is or what it does. I want to assume they're all smart, but it's a different kind of tech company.

LM: For sure. I think one thing that is important to note is that Oracle has a data business where they're collecting consumer profiles for advertising purposes. So it sort of makes sense that they might be interested in a consumer app that's already collecting a lot of consumer data for that reason. So there's sort of, if you squint a little bit, you can make sense of this, but it's very strange and it's definitely a result of how weird this whole process has been.

MC: So at first, everybody was talking about a sale, and now what we're talking about is a partnership. How did that happen? What's the difference?

LM: Yeah. So let's talk about that for a second. So Microsoft, it seems like from all of these rumors, was more interested in a traditional acquisition. Where they would get the app, all of its user base here in the US and maybe some other markets, as well as the algorithm, which is the thing that makes TikTok so unique. It's, I would say, the most algorithmically driven social network out there by far. Then what happened is that the Chinese government said, "If you would like to export stuff, such as a recommendation algorithm, you need a special license to do that." So I think then Microsoft said, "We don't have that special license. We don't want to anger Beijing, because unlike a lot of our competitors in California, we actually operate in China, and we have a large operation in China." LinkedIn is available in China. So I think that was part of the reason.

And also, I don't think that ByteDance really wants to give up control. So I think it was helpful for them that Oracle came in and said, "Hey, we're just going to take a stake or maybe going to have some safeguards here or there, where we're going to be able to look at the code, maybe examine how the algorithm works, but we're not trying to buy the app outright from you for $20 billion or whatever." So I think that's sort of how we got there. The problem is that that's not what the president wanted, that's not what the president said would be acceptable, and as a result, a lot of Republican lawmakers have actually spoken out and said this deal should not be accepted, because it is not an outright sale.

LG: I'm wondering if the security concerns or any kind of security related investigations have continued during this process of a deal being brokered. Wasn't the original idea that there were supposedly these big security concerns of what was going to happen in terms of data leakage to the Chinese Communist Party. And now it's like, everyone seems more focused on the machinations of the deal itself rather than what's actually happening on TikTok, what's the latest on that?

LM: Yeah. So that's a really good point. I think part of the problem is that the Trump administration was never very specific, so they never cited any concrete evidence about, TikTok has done X, Y, Z, so we don't want them to do that in the future. And it's kind of ironic because Oracle keeps talking about, we're going to keep all the TikTok data in our cloud and that's going to make it safe. And the reality is that, at least according to TikTok, they've already been keeping Americans data in the US.

So it's not really clear that this deal would change that much or resolve any of those security concerns, especially if ByteDance retains majority control of the company, which they've said on social media, they very well intend to. So basically, we have a gigantic circus here and it's not really clear that anything has happened, except Trump has been able to get a pretty sweet deal for one of his political allies.

MC: Now, what about all the "extra money" that they were talking about at the beginning of this process, there was $5 billion in fees that were supposed to go to the US treasury or some other giant. Some set up an education fund for computer science students in the US, is that still going to happen or was that ever going to happen?

LM: Yeah. I'm glad you brought that up. So earlier in the summer, Trump was talking about getting a finder's fee, essentially, a ransom for orchestrating this deal, which he created the need for in the first place. And then he said, actually, some lawyers I talked to told me that was illegal, so nevermind. And it kind of seemed like that part of the saga was over, but then at a campaign rally last weekend in North Carolina, Trump started talking about this again. And he said that TikTok had agreed to give the US government $5 billion to start this education fund to teach young Americans about the truth about American history or something.

Very quickly, it seemed that ByteDance and TikTok had no idea what he was talking about, then Oracle and Walmart put out a statement where they basically tried to close this discrepancy by using maybe some of the same words that Trump used, but I won't say that the outcome was the same. So they said that Oracle, Walmart, TikTok and some other TikTok investors would set up some sort of like AI education thing that would be about math, computer science, maybe also history, one of the words that Trump used. And then they talked about TikTok paying $5 billion in taxes, something that they would have to do anyway.

So we got some of the same key words there. However, what they are describing is not what Trump was describing. It was just kind of another part of this crazy soap opera. But I think it was very distracting, it was very confusing, it really undermined the whole process and was a great headline for a minute, but I don't think anyone really knew what he was talking about there.

MC: I'm sensing a theme.

LM: Yeah. A little bit.

MC: All right. Well, let's take a quick break and when we come back, we'll talk about China, tech and the government.


MC: Welcome back. For the most part, we focused on the TikTok battle from an American perspective. It's not the first time the US government has made a fuss about Chinese tech. Take Huawei, for example. Last year, the Trump administration effectively banned Huawei from partnering with us companies like Google, citing the same kind of concerns about data collection that we've heard in the TikTok debate.

And so these technology companies find themselves bearing out the brunt of rising tensions between the US and China. But how real is the threat to our national security? Is an app filled with dancing teens really a Trojan horse for Chinese espionage? Louise, you wrote a story last week where you said that Trump's handling of this TikTok saga will have lasting consequences for relations between the two countries. What are some of the possible futures here?

LM: So I think the big one that a lot of people talk about is a more fragmented internet. And one thing I worry about in that is that I think the model that China wants other companies to adopt is this idea of the internet being state controlled. So you go to a different country and the internet will be different because the government of that country has different priorities, they have different things that they want, and that's sort of the road that I fear that we're going down, right? It's not really anything specific about TikTok, it's the fact that TikTok is from China that angers president Trump and his administration.

So they're kind of taking control of the internet here, right? They want to change what sorts of apps are available to you for their own political gains. And I think that that is a future that China really likes. And I think that that's something to be really concerned about and would that continue under a Biden administration? A lot of the experts I spoke to last week actually said that it probably would. I think that alone, the TikTok action here looks kind of haphazard and confusing because that's just sort of how the Trump administration rules. But I think that it's helpful to put it in the greater context with Huawei, like you said, Mike, ZTE, some of these other Chinese tech companies like Tencent, which owns WeChat. It's kind of been a really long whack-a-mole approach here and I worry that's only going to continue and it's really lacking in any principle.

LG: Louise, you bring up WeChat, which is a hugely important app in China. And there are also millions of Chinese Americans here in the US who may potentially use WeChat to communicate with family and friends. And so I'm wondering how the actions against WeChat are being perceived by those communities.

LM: Yeah. So right now the WeChat ban, which is very similar to the TikTok ban is being held up in court. A federal judge decided last week that there were serious first amendment implications here, and that it wasn't clear how banning the app was necessarily going to do anything for national security. So right now the ban is on hold. But I think that it really is part of a wider pattern here, which is signaling to Chinese Americans and to Chinese nationals who may be in the US for school or for work, that they're not welcome here, and I think that that's really concerning.

And I think that a lot of the time, these actions from the Trump administration kind of veer into the territory of xenophobia and because we're not very clear about what we want, and it's just about raising the concern about China and making China always seem like the enemy, that we're really risking more racist actions against Chinese people in the US, people of Chinese descent, and that's really concerning to me. And I think that a lot of Chinese Americans look at this ban and say, "Will I be unable to contact my grandma, my relatives, my friends?"

It's also a huge risk for people who do business in China. I've heard from a lot of business people that they're really worried because WeChat is such an everything app that is used for, not only FaceTime-ing grandma, but also doing business and financial transactions and that sort of thing, so I think there's a lot there. But for what it's worth, I feel kind of more conflicted about WeChat than I do about TikTok. I think that TikTok, it's kind of clear that they've made a good faith effort to be more transparent about their content moderation, to host data in the US. Whereas WeChat has definitely been used as kind of a vector for the Chinese government to continue to control it's citizens, even when they've left its borders.

And there's a lot of propaganda and WeChat, there's a lot of misinformation. It's a way that the Chinese government has tried to control minorities overseas, such as people from Tibet or Muslims who live in Xinjiang, so I don't know, I feel a little weirder. I don't think it's great to block WeChat, but I feel a little bit more conflicted about, is this an app that we want to go to bat for? I don't know. It's complicated, but I think that it's definitely part of a long stretch of actions here that I think are detrimental to Asian Americans.

MC: I'd like to ask about how these actions can affect Americans specifically, because you talk about in your coverage, I think you say around the time that the White House began taking an interest in TikTok, it was really the perfect opportunity for the US government to set a benchmark for what sorts of information that social media platforms can collect on users. Whether those platforms are run by companies in the US or companies in other countries, but the policy experts that you spoke to in your stories feel as though the White House missed that opportunity. Can you talk about that?

LM: Yeah. Let's just be frank here, is not been a priority for the Trump administration to deal with data security and privacy in a more general way. Where we're not seeing Trump talk about a national privacy law, we're not seeing them talk about a very principled approach, a set of ideas that you could compare any app against, right? You could say TikTok is not adhering to this data security standard, so that's why we want to take action against it, that's not the sort of approach we're seeing. We're seeing people like Peter Navarro, who is a White House official go on Fox News and say the CCP is essentially Satan, and that's why we need to block this app. It was totally a chance to kind of set the agenda here about privacy, about data security, about espionage in a very principled way, but instead we just kind of got this very one or two app focused agenda that was all about China.

I really think that what happened here is that we saw some trade talks between the US and China sort of fall apart, at every step of the way the US was kind of losing. And I think that the administration latched on to TikTok as a pawn, a hot potato that they could use to maybe get some of what they wanted. They put China on notice, I think that this was something that Beijing was not expecting. So I don't know if you can call it ultimate failure necessarily, but I just think that we totally flew by the opportunity to do anything more general here. And look, how long has it been since Europe puts GDPR in place? Two years? We are so behind at this point.

LG: Louise, before we let you go, can you just tell us really quickly, what actually is going to happen to the TikTok app or the WeChat app on people's phones in the coming weeks? Should you be rushing to download it? Should you be concerned that you're not getting software updates and therefore there could be security issues? What do you actually need to know about you using apps right now?

LM: So the apps are not going to disappear from your phone, for right now there's still in every app store that you know and love. I don't know if they're going to go anywhere soon. I think that one thing that's good for people to know is that the president has no authority to actually block something from the internet, right? So the app might no longer be in the app store, but there's probably going to be a way to access it from your browser still.

I think it's going to be really hard for any administration in the US to actually make TikTok totally disappear from the American internet, but it's kind of unclear what the fate of the app is on the American app stores in the next couple of weeks, I really don't know what's going to happen. Anytime I've tried to predict anything with this saga, I'd been really wrong. So I have no idea, but I think it's fair to say that the app is still going to be here in a few weeks, hopefully, but maybe it'll disappear from app stores eventually.

MC: All right. Let's take a quick break and then we'll come back with recommendations.


MC: All right. Louise, you're up first, what is your recommendation for our listeners?

LM: So my recommendation is a book called The Overstory by Richard Powers. It's a book about trees, but it's also kind of a great American novel. And it's been both really sad to read during the wildfires, but also really beautiful. I will never look at trees the same way after reading this book.

MC: This is actually on my Goodreads list.

LM: It won the Pulitzer Prize, I highly recommend it.

MC: Very nice. Lauren, what is your recommendation?

LG: Recommendation is probably pretty obvious, but it's Schitt's Creek. So the Emmys were earlier this week and Schitt's Creek won a whole bunch of awards, I don't even know how many Emmys they won exactly, but it was a lot. And it's a delightful show, I'm on season three, episode one, right now. It originally aired in Canada. It was co-created by Eugene Levy and Dan levy, who star in the show. And then it was brought to Netflix and it kind of had this new life once it was brought to Netflix.

And it's been on Netflix for a while, but it just, I don't know, it just started to get a lot of attention and love more recently and it's worthwhile. I've heard people say and I agree with this, that it's a slow start, the first few episodes, I wasn't really into it. I started it and then I stopped it. And then because we're home now all the time, I picked it up again and now I find it to be such a delight. So I recommend Schitt's Creek.

MC: Seasons three and four, I feel like where it finally hits its groove.

LG: Well, that's been my experience so far. And at the last episode of season two, felt very much like a series finale in a way and I was like, "Oh no. Was that…?" And then I was very happy to see that there are many more seasons coming or at least. How many seasons are there actually, Mike? I don't even know.

MC: I think there's five. Not entirely sure.

LG: It's five. O, great. I have a few more to go. That's great.

MC: Fact check me on that.

LG: That's my recommendation.

MC: Such a great.

LG: What's yours Mike?

MC: My recommendation is a website/social media account called SF Urban Hiker, and this is specifically for people who live in San Francisco. There's a woman named Alexandra Kenin who lives here in the city and just loves to go on long urban hikes. And she documents them and she plots them on a map so you can do them with her. She also runs a travel agency of sorts, it's like a guided tour service that is shut down right now. So during the pandemic, she has been going out and logging all of the publicly accessible staircases in San Francisco. There were like 840 of them out there, and she's been climbing all of them and rating them. So in San Francisco, there's usually not very far to walk to find a really good staircase with an awesome view and a pretty good cardiovascular challenge.

So I've been going on her map, finding all the staircases in my neighborhood and walking up and down them. As I was doing this, I was like, "I should really recommend this on the podcast." But then I wanted to make sure that it wasn't something that only people in San Francisco could enjoy, so I looked it up. And if you live in pretty much any major city, so if you live in like New York or Chicago or Miami or Austin, Texas, or Denver, Colorado, there are websites and social media accounts dedicated to Urban Hiking in your city.

So I highly recommend that you pause Netflix for an afternoon, I know, shocking and go outside and do a hike, because there's always one that takes you into a part of your environment that you've never been to before. That's the real joy. Is like you live in this neighborhood, you spend all your time in this neighborhood, sometimes you go over to that neighborhood, you go there one day and you see a whole bunch of awesome stuff and you see a new view that you've never seen before. And it's really fun way to explore your city, so if you live in the suburbs, sorry, you're totally missing out, try some urban hikes.

LG: That sounds lovely, Mike. I think I'm going to have to come up to San Francisco one of these days and we'll have to go for a socially distanced, masked, urban hike. And then when Louise makes her way to the West Coast, we're going to do it all together.

MC: Yeah.

LM: Sounds good.

MC: I'll bring you up and down some staircases.

LG: Yeah. We'll make a TikTok about it.

MC: All right. That's our show. Thanks again to Louise for joining us.

LM: Thanks for having me.

MC: And thank you all for listening. If you have any feedback, you can find all of us on Twitter, just check the show notes. This show is produced by Boone Ashworth and our executive producer is Alex Kapelman. Goodbye and we will be back next week.

[Gadget Lab outro theme music]

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