Photo credit: Solen Feyissa
In the last week of April, Congress passed and President Biden signed a bill that would ban TikTok in the United States if parent company ByteDance does not sell it to a U.S. company within 12 months.
New York Times senior writer David Leonhart provides an easy-to-understand summary of why this bill was passed. This is a highly unusual move since TikTok is a popular social media platform. About one-third of Americans under 30 get their news regularly, and Congress rarely punishes a single company for questionable or potentially questionable conduct.
FBI Director Christopher Wray clearly stated the main reasons for taking this action. He told Congress that under President Xi Jinping, private companies are treated as extensions of the state, so “this is ultimately a tool under the control of the Chinese government.”
The argument for banning TikTok seems straightforward: protecting national security.
Zephyr Teachout, a professor at Fordham Law School, argues in the Atlantic that the United States has a long history of protecting its infrastructure and communications platforms from foreign control. Since the Constitutional Convention in 1787, the Framers feared that foreign powers would exploit America’s open form of government to advance their own interests.
As recently as 2011, that concern was expressed in our justice system. As a circuit court judge, Judge Brett Kavanaugh wrote in Blueman v. FEC that the United States is anxious to limit foreign participation in such activities and “thereby prevent foreign influence over the United States political process.” He said that he has significant profits.
Those who argue that the law violates constitutional rights rely on past court decisions regarding constitutional rights to oppose the law. In 2020, President Trump tried to force the sale or ban of the TikTok app, but a federal judge blocked the effort, saying it would shut down a “platform of expression.”
A federal judge recently blocked a Montana law banning TikTok, saying it could violate the First Amendment.
The ACLU sent a letter to Congress urging them to vote against the bill, citing that decision and arguing that the law applies “prior restraints” that prevent access to received speech on TikTok. To invoke a prior restraint, a court must determine that the prohibition is necessary to prevent serious and imminent harm to national security. Nothing was offered to pass the law.
Leonhardt cited a Network Infection Research Institute report that said TikTok would likely promote or demote certain topics based on the perceived preferences of the Chinese government. They conclude that TikTok is a Chinese propaganda tool. That may be true, but does it rise to the level of imminent harm to national security?
The conservative-liberal CATO Institute found the report a misleading study based on flawed methodology. Jeff Yass is a former director of the Cato Institute and a prominent TikTok advocate who has made major donations to Republican campaigns. He needs to do so because, as Susquehanna’s founder, he owns roughly 15 percent of ByteDance, according to a NYT reporter’s article.
IIf you like this work, Become a Patreon Patron or One-time donation To help reach others. – Thank you, Nick
ByteDance is a private Chinese company, but U.S. companies have invested in it since it was founded in 2012, a year before TikTok was launched. Susquehanna and investment firms General Atlantic and Sequoia Capital have collectively poured billions of dollars into ByteDance.
Three of the company’s five board members are American, with two of the seats held by the heads of GA and SC. Other U.S. investors include private equity firm KKR, Carlyle Group and hedge fund Cortue Management.
When you think of TikTok as a Chinese company, understand that it is run by an American board of directors and funded by American investments. It has 600 million users outside the United States and will generate approximately $10 billion in advertising revenue worldwide in 2022. It doesn’t exist in China.
ByetDance owns 100% of TikTok, but 60% is owned by global institutional investors. The company’s founders own 20%, the Chinese government owns 1%, and the rest is owned by its 150,000 employees based in about 120 cities around the world. Byte Dance is a global business network valued at $225 billion as of March 2024.
TikTok is a creature of global capitalism, and since ByteDance is based there, it is likely subordinate to an authoritarian communist government. TikTok in the US is therefore subject to regulatory rules that serve China’s interests rather than US interests.
This condition has attracted the attention of politicians, academics, and reporters. Their explanations and solutions revolve around a dialectical world where two objective truths collide. In other words, while nation-states seek to ensure their own survival, they also pursue the wealth generated in the global market by the social media platforms of the Internet.
As previously explained, the Internet has heralded a historic increase in national security threats. However, the global Internet market also contributes significantly to the economic growth of China, the United States, and other countries.
The struggle to define and control TikTok’s influence on national security and wealth is at the heart of the Chinese and American governments’ efforts to control the global internet social media octopus.
And it’s a growing giant. As of January 2024, 66.2 percent of the world’s population were internet users, of which 94 percent were social media users. China has the largest number of users, followed by India, the United States, Indonesia, Brazil, and Russia. Despite strict government control of the Internet, it is clear that social media, even under state control, has significant participation.
For those who have the resources to build a large website infrastructure, access to a country’s population is a lucrative source of income. Investors have poured billions of dollars into social media companies, with Alphabet, Amazon and Meta each having market capitalizations of more than $1 trillion. Digital commerce is growing in communist and capitalist countries alike. China’s Tencent, which owns WeChat and QQ, is the world’s fourth-largest internet company with a market capitalization of $351.2 billion, and ByteDance is not far behind.
China’s approach to TikTok is typical of how it and other governments such as Russia and Iran are dealing with the benefits and dangers of social media. All three countries ban major foreign Internet social media platforms such as Facebook, Google, Twitter, YouTube, and most other sites in the mainstream of the Western Internet. However, domestically controlled or censored apps are allowed.
For example, TikTok is not available in China, but ByteDance offers its sister app Douyin, which does not exist outside of China. Even tacit acceptance of government censorship has not affected sales. Research firm eMarketer estimates that Douyin earned $21 billion in ad revenue in 2023, which is about two-thirds of Alphabet’s ad revenue from YouTube.
The allure of big profits from China’s vast population has forced some of America’s biggest internet companies to make serious compromises. Apple derives one-fifth of its total revenue from within China. However, a New York Times investigation found that Apple had compromised Chinese customers’ data and aided Chinese government censorship. As a result, approximately 55,000 active apps have disappeared from Apple’s App Store in China since 2017, although most are still available in other countries.
China also demands “golden shares,” which would allow government officials to be directly involved in private companies’ decision-making, including having a say in what they offer. Chinese authorities have acknowledged its existence but have not disclosed how it is used.
Additionally, every website on the Internet in China goes through one of three state-owned companies. Therefore, all web searches may be subject to significant restrictions and results may be censored.
IIf you like this work, Become a Patreon Patron or One-time donation To help reach others. – Thank you, Nick
The United States offers a wide open internet for social media apps to exist compared to China and similar states.
Overall, Freedom House ranks the United States 9th.th It is the most tolerant country for internet freedom, ranking just below the democracies of Canada, the United Kingdom, Japan, and Germany. As previously noted, our courts have used the First Amendment to limit state interference with access to information on social media apps.
According to the Congressional Research Service’s report, “Free Speech and the Regulation of Social Media Content,” which examined the court’s decision, social media “generally enjoys the full protection of the First Amendment when making editorial decisions.” He said he was treated “just like an editor.”
This interpretation means that, like newspapers, social media apps have the right to express their own opinions, but are not obligated to print or post the opinions of others. Social media can therefore ban speech that endangers public health, such as hate speech that incites violence against citizens or disinformation that exposes the public to a deadly pandemic.
Constitutional rights also protect private property.Contributed by Republican Senator Paul reasonaccuses the government of violating the Fifth Amendment right to due process by banning TikTok and depriving TikTok’s current U.S. owners of property through the forced sale of TikTok to an American company. There is. For a court to uphold such a government action, TikTok would need to be charged and convicted.
However, there is no clear protection for companies that incur losses by freely choosing the businesses in which to invest. Hirsch’s NYT article points out that TikTok investors could lose billions of dollars if a court rules that the government can ban TikTok as a national security risk.
A sale to a U.S. company may not be an option, as China has previously halted such sales and the country’s foreign minister has denounced the current offer as unacceptable. China has passed a new law blocking the export of technology similar to the algorithm used by TikTok.
The TikTok brouhaha comes as China and the US overtake the internet’s social media platform. However, in the future there will be conflicts between countries over the control of social media on the Internet. The advent of the digital age has exposed the existential conflict between ensuring national sovereignty, protecting the rights of citizens, and maximizing the profits of global markets.
Authoritarian and democratic governments are experimenting with two paths to effectively resolving these conflicts. Central to their approach is how to manage domestic decision-making.
In countries without an independent judiciary and where the legislature is subordinate to the executive, access to the Internet is denied or censored. In democratic republics, where these three sectors are not controlled by a single political party or executive branch, access is open and subject to varying and limited regulation.
The difference between these two approaches is that they allow for public debate about controlling access to the Internet. In this way, social media apps that challenge the institutional and market status quo allow society to respond rationally, rather than having responses determined by a select few.
