Battle over TikTok now a survival contest between Biden, Trump and China, Plus Beijing intervenes to save state-backed Shenzhen developer -- China Boss News 3.15.24
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What happened
The US House of Representatives on Wednesday passed a bill requiring divestiture of the popular app TikTok by an overwhelming 352-65 majority vote. The bill is now headed to the Senate, where, analysts say, it will meet new resistance.
TikTok scored an own goal last week when the platform’s managers used pop-ups and push notifications to mobilize users, including children, to put up an 11th hour fight against the bill on its behalf.
Within hours House staffers were being “bombarded” by calls from people, who they suspected were mostly teenagers, demanding them to stop “a total ban.”
Some of the callers threatened violence, while others threatened to kill themselves, according to Spectator’s Matthew Foldi who listened to voicemail recordings released from the calls.
Tellingly, the bill that the app’s users were urged to “speak up now” against, was not an actual ban.
Rep. Mike Gallagher (R-Wisc.), the bill’s cosponsor, told Politico that it “if its Beijing-based owner ByteDance sells the app then “TikTok will continue to survive.”
But that’s how TikTok’s publicity managers portrayed it to their subscribers, which vividly demonstrated to lawmakers what detractors had been saying all along - that the platform can be misused as a tool of disinformation and manipulation.
Worse, it seems the app can even radicalize children.
“I will kill you if you fucking shut down TikTok. I will really really fuck you up. So don’t shut down TikTok. Bye bye!,” a teenage boy’s voicemail said, according to Foldi.
Another caller was only six years old.
Why it matters
Strange bedfellows
TikTok’s political disaster in the House is all the more shocking when you consider that - until recently - it had had “several ‘revolving door’ lobbyists who previously held federal government positions working for prominent members of Congress on both sides of the aisle,” according to Anna Massoglia, Editorial and Investigations Manager at nonprofit Open Secrets, a U.S. lobbying tracker.
As of July 2023, Massoglia said “TikTok parent company ByteDance [had] spent a record $2.4 million on federal lobbying,” and “lobbyists working for TikTok’s interests include former Sens. Trent Lott (R-Miss.) and John Breaux (D-La.) as well as former Reps. Jeff Denham (R-Calif.) and Rep. Bart Gordon (D-Tenn.).”
But Politico last weekend also revealed that former Trump aide Kellyanne Conway had joined the Club for Growth - a conservative federal political action committee - “to advocate for TikTok in Congress.” Conway has met with lawmakers to discuss the app on at least ten occasions in recent months.
And Senator Rand Paul continues to “rile his GOP colleagues” by with firm opposition to a TikTok divestiture or ban.
Paul has eerily twisted himself into a knot by taking a stand on the principle of free speech that would ultimately protect Beijing’s totalitarians.
But the recent “flip-flop” of Donald Trump, “who flirted with a US ban on the Chinese owners of TikTok while president,” The Guardian said, is almost astounding.
The rope that hangs this gang of new China friends together is tied to billionaire investor and Club for Growth donor Jeff Yass, who “holds a 15 percent stake in TikTok’s parent company ByteDance,” according to Politico’s Washington reporter Daniel Lipton.
“That translates into a personal stake for Yass of 7% in ByteDance . . . worth roughly $21 billion based on the company’s recent valuation, or much of his $28 billion net worth,” the Wall Street Journal said.
Stakes couldn’t be higher
“Yass and his wife have ‘donated more than $24 million to [Senator] Paul or committees that support him since 2015,” WSJ staff added, citing federal campaign fund disclosures.
And Trump has recently “praised Yass as ‘fantastic’ when they were both at a Club for Growth retreat” while he “court[ed] Yass” for campaign financing, according to Daniel Lippman at Politico.
Major donors, like Yass, are more important than ever to Trump, whose small-dollar donations are currently “a fraction of what he raised” leading up to the 2020 election.
Meanwhile, the app’s immense popularity has made it challenging in an election year for Congress and the Biden Administration to address national security concerns.
Analysts, like Nazak Nikakhtar, a former Commerce official and partner at Wiley Rein LLP, say that “ByteDance, which is headquartered in Beijing, is beholden to a group of laws that could give the Chinese government access to sensitive TikTok user data, even if it's stored elsewhere.”
Moreover, President Biden is acutely aware that China could use TikTok to influence the 2024 US elections, as US director of national intelligence, Avril Haines, on Tuesday told the Senate. He has pledged to sign the bill if it makes it past the Senate.
But, ultimately, Bytedance’s American head is on the chopping block, as experts say China will refuse the divestiture of its “magic sauce” - the algorithms which Beijing considers a prized national security asset.
Paul Triolo of Albright Stonebridge told CNBC’s “Street Signs Asia” that “[a]ny kind of divestiture and then merger with another company or acquisition would have to be approved by the Chinese government, which would probably reject that and is probably advising ByteDance that it would reject that.”
The most obvious support for that view is the promise that China’s commerce minister made last year to “‘firmly oppose’ a move by the U.S. to mandate a sale of TikTok” after the U.S. Committee on Foreign Investment in the United States (CFIUS) told ByteDance to divest.
But lest we forget, there are over 7 million American businesses caught in the middle of TikTok’s existential crisis, according to the Washington Post.
Brandon Hurst, 30, a Los Angeles plant shop owner, told WaPo that “‘[t]hese representatives and senators don’t understand that what they’re doing won’t just harm people they call ‘content creators.’”
“Banning TikTok would shut down a lot of small businesses, including mine,” he said.
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