Speaker 1: Welcome to Tech Stuff, a production from iHeartRadio. Hey there,
Speaker 1: and welcome to tech Stuff. I'm your host, Jonathan Strickland.
Speaker 1: I'm an executive producer with iHeart Podcasts and How the
Speaker 1: Tech Are You? So I had been working on a
Speaker 1: totally different episode for today, but then yesterday the US
Speaker 1: Senate did what I originally said I thought they wouldn't do,
Speaker 1: which is that they passed a bill that mandates byte
Speaker 1: Dance the Chinese company must sell its subsidiary TikTok to
Speaker 1: some other entity that is not identified as a foreign
Speaker 1: adversary to the United States or face a ban across
Speaker 1: the nation. That bill is now going to President Biden's
Speaker 1: desk for his signature, which seems to be pretty much forthcoming.
Speaker 1: I mean he said he was going to sign it
Speaker 1: into law. In fact, it may have already happened by
Speaker 1: the time I get this episode published, and then that
Speaker 1: means this bill will in fact become law. This is
Speaker 1: a huge moment in technology, in business, in politics, both
Speaker 1: domestic and international, and I figured it would make sense
Speaker 1: to kind of go through and talk through this. So
Speaker 1: first up, let's talk about byte Edance and TikTok, because
Speaker 1: we've learned some things about byte dance in particular recently
Speaker 1: that really have shaped perspectives in very recent weeks. So
Speaker 1: let's start off with a guy named Jean E. Ming.
Speaker 1: He got his start working for a travel website in
Speaker 1: China called Kuksoon, and he spent a brief period working
Speaker 1: for Microsoft, but then ventured out into the entrepreneurial landscape himself.
Speaker 1: So the traditional story is that he created various apps
Speaker 1: in an attempt to kind of find one that really stuck,
Speaker 1: and one of those was a real estate app, not
Speaker 1: too different from what you might see in an app
Speaker 1: like Zillow right, but this one was called ninety nine
Speaker 1: Fong Fang. That app was not a success. It ended
Speaker 1: up eventually going out of business in a couple of years,
Speaker 1: but it would end up being really important to the
Speaker 1: TikTok story for multiple reasons. For one thing, engineers at
Speaker 1: ninety nine Fong developed tools that were meant to help
Speaker 1: for search as well as recommended real estate listings based
Speaker 1: upon user information, which you know a lot of that
Speaker 1: sounds fairly standard for a real estate app, but the
Speaker 1: story goes Jeong Yi Ming decided that maybe you could
Speaker 1: pair a recommendation algorithm that didn't work for real estate,
Speaker 1: but it would work for something like serving someone up
Speaker 1: news that you know. You would learn about a user's behavior,
Speaker 1: their interests, the things that are important to them, and
Speaker 1: you could aggregate news for those users, and you could
Speaker 1: match people to content. Essentially, he was just thinking about
Speaker 1: how the best apply recommendation algorithms. How do you judge
Speaker 1: what someone likes? And then how do you keep them
Speaker 1: at your app by serving them the stuff that makes
Speaker 1: them stay there? How do you make that happen? So
Speaker 1: to that end, again, the traditional story goes. Jiang Yiming
Speaker 1: launched a news aggregator app called Totyoo, and he and
Speaker 1: his former college roommate Leong Rubo decided to found a
Speaker 1: company that would sort of be the umbrella corporation for
Speaker 1: the various apps they were developing, and this would become
Speaker 1: Bite Dance. They sought seed money from investors, and then
Speaker 1: a company founded by an American politically conservative mega donor
Speaker 1: enters into the picture. So we're in around twenty twelve
Speaker 1: at this point ninety nine. Fong really started around two
Speaker 1: thousand and nine. Byte Dance starts around twenty twelve. Now,
Speaker 1: the conservative mega donor is a fellow named Jeff Yas
Speaker 1: And you know, I get it. I know tons of
Speaker 1: y'all out there hate politics in your tech stories, but
Speaker 1: unfortunately this time we have to include politics because it
Speaker 1: plays a huge part in what we're talking about. Me
Speaker 1: we're talking about a ban on TikTok, a legal ban,
Speaker 1: so we have to talk about politics, and Yes in
Speaker 1: particular has had a really huge impact on the TikTok story.
Speaker 1: So Yes co founded an investment company called Susquehanna International
Speaker 1: Group with some of his fellow students at the State
Speaker 1: University of New York at Binghampton back in the nineteen seventies.
Speaker 1: And this company would actually become wildly profitable. It would
Speaker 1: become one of the massive investors in the stock market
Speaker 1: here in the United States, and it would turn Yass
Speaker 1: into a billionaire in the process. So here we are
Speaker 1: in twenty twelve and Susquehanna International Group invests in this
Speaker 1: fledgling Chinese company called Byte Dance, ultimately spending enough to
Speaker 1: purchase a fifteen percent state in the company. And you know,
Speaker 1: that's a healthy chunk of ownership, and today it represents
Speaker 1: a truly massive investment considering the stratospheric altitude that Byte
Speaker 1: dances valuation would reach. So Yas is heavily invested in
Speaker 1: byte Dance, and some argue that the majority of Yas's
Speaker 1: estimated wealth is tied up with this investment. So he
Speaker 1: clearly has a huge incentive to protect Byte Dance. That's
Speaker 1: where his billions of dollars are tied up. Now Moreover,
Speaker 1: the New York Times published a piece not too long
Speaker 1: ago about some court records that were accidentally made public.
Speaker 1: These records relate to a lawsuit in which some former
Speaker 1: ninety nine Fong engineers allege that their work has been
Speaker 1: repurposed to power byte Dances various apps, most notably TikTok,
Speaker 1: and that these engineers were not fairly compensated for the
Speaker 1: use of their work. The court records show that Susquehanna
Speaker 1: had invested in ninety nine Fong, So Susquehanna's involvement and
Speaker 1: thus Jeff Yass's involvement with Xiang y Ning, TikTok and
Speaker 1: byte Dance has gone much further back than was first known.
Speaker 1: This goes back to two thousand and nine, so Susquehanna
Speaker 1: apparently invests in ninety nine Fong, but that app, like
Speaker 1: I said, went belly up. And then, according to these
Speaker 1: court documents, Susquehanna essentially created byte Dance and put Xiang
Speaker 1: Yi Ming in charge of it. So, in other words,
Speaker 1: the court records say the origin story for a byte
Speaker 1: Dance is not the same thing as what has been
Speaker 1: generally believed, and that Susquehanna wasn't just a passive investor
Speaker 1: in this Chinese company, but actually took a very prominent
Speaker 1: role in the creation of byte Dance itself. Anyway, those
Speaker 1: court records were never meant to be made public. They
Speaker 1: should not have been made public. So the court subsequently
Speaker 1: removed those records from public access, but not before The
Speaker 1: New York Times was able to review them and publish
Speaker 1: an article about them. So now let's move on. So
Speaker 1: ByteDance begins to form in twenty twelve. It's based in China,
Speaker 1: and we're still quite a ways out from TikTok at
Speaker 1: this point. TikTok's own history is very convoluted. For one thing,
Speaker 1: it's really the story of a few apps kind of
Speaker 1: merging together Voltron's style to create what we know of
Speaker 1: as TikTok today. One of those apps was called Musical
Speaker 1: dot l y or Musically and some of y'all might
Speaker 1: even remember that app. I remember it was really big
Speaker 1: with some of my actor friends back in you know,
Speaker 1: twenty fifteen or so. This app was originally founded by
Speaker 1: Luyu Yong and Alex Hu in China, and the app
Speaker 1: started off originally that they wanted to create an app,
Speaker 1: a totally different app, not musically. They wanted to make
Speaker 1: an app that was an educational tool, something that could
Speaker 1: deliver short informative lectures and such to users. But they
Speaker 1: found that folks didn't want to know learning, so they
Speaker 1: decided to change directions and they made an app designed
Speaker 1: for very short form video content that you could create
Speaker 1: and share short form videos or you could browse short
Speaker 1: form videos, and that these would be you know, less
Speaker 1: than a minute long, somewhere between fifteen seconds and sixty seconds,
Speaker 1: and they included the ability for users to post videos
Speaker 1: with specific music clips. They had a library of music clips,
Speaker 1: so it was kind of like adding a soundtrack to
Speaker 1: your video content. And this led to people using Musical
Speaker 1: dot Le to post lip syncing videos. That's really where
Speaker 1: the app took off. It also coincided with a popular
Speaker 1: lip syncing program that was happening in the United States
Speaker 1: at the time. So again when I say it got
Speaker 1: really popular, the app really got popular in America. In China,
Speaker 1: it actually didn't move the needle very much at all.
Speaker 1: So with the American market going banana for lip syncing videos,
Speaker 1: the founders decided to establish an office in the good
Speaker 1: old US of A. So they did so in Santa Monica, California.
Speaker 1: This is kind of where the heart of TikTok being
Speaker 1: an American company comes in. So they create this office
Speaker 1: in Santa Monica. The app continues to go incredibly popular.
Speaker 1: At one point, an estimated half of all US teens
Speaker 1: were using Musically and it became the number one app
Speaker 1: on the iOS app store, so it was a really
Speaker 1: big deal. Meanwhile, back in China, ByteDance was working on
Speaker 1: kind of a similar app, not the exact same thing
Speaker 1: as Musically, but along the same lines, and they called
Speaker 1: it dou Yin, which, from what I understand, means shaking
Speaker 1: sound and a cursory description of dou Yen makes it
Speaker 1: sound an awful lot like TikTok. It's an app that
Speaker 1: lets users create and browse short form videos, often ones
Speaker 1: that include popular music in the background. Do youan though,
Speaker 1: also allows people to live stream, which you can do
Speaker 1: on TikTok now too, or you know, watch a live stream,
Speaker 1: not just to do one yourself. And dou Yan also
Speaker 1: has some kind of incredible advanced features that are not
Speaker 1: in TikTok, like being able to search videos based on
Speaker 1: the face of someone who's appearing in the video you're watching,
Speaker 1: or being able to purchase goods that are featured in
Speaker 1: one of those videos just through a couple of presses
Speaker 1: at the screen, or even like to book a stay
Speaker 1: in a resort or a hotel that is featured in
Speaker 1: a video. And as you would imagine it also as
Speaker 1: a Chinese app, has incredibly tight restrictions on the type
Speaker 1: of content that you can post there. Essentially, anything that
Speaker 1: would bring into question the authority or legitimacy of China's
Speaker 1: government is strictly forbidden. As it would later turn out
Speaker 1: that kind of stuff would sort of be forbidden on
Speaker 1: TikTok as well. We're going to have to come back
Speaker 1: to that in a bit. So in September twenty seventeen,
Speaker 1: byte Dance launches TikTok, which is a sister app to
Speaker 1: dou Yin. It's the international version of du Yan and
Speaker 1: as such, it doesn't have all the features and it
Speaker 1: doesn't have all the restrictions that Duyin has. But the
Speaker 1: company had also become aware of Musical Lee and there
Speaker 1: was this clear market in America that was just waiting
Speaker 1: for exploitation, and Music Lee had already tapped into it. Right,
Speaker 1: it makes way more sense if we can get musically
Speaker 1: and we can get access to that, then we get
Speaker 1: access to those users and we don't have to build
Speaker 1: up our audience from scratch. So Byte Dance, through its
Speaker 1: subsidiary Totial, makes an offer to acquire Musical Lee in
Speaker 1: November twenty seventeen. Now, the price tag was not made public,
Speaker 1: but estimates put it somewhere in the neighborhood of eight
Speaker 1: hundred million dollars to one billion smack a Rouse, which
Speaker 1: is a princely sum indeed. Now. At the time, Musical
Speaker 1: Lee released a statement that said the company would continue
Speaker 1: to operate independently in the United States. While, in the
Speaker 1: words of a tech Crunch article, quote taking advantage of
Speaker 1: the distribution in tech that its new parent offers end quote,
Speaker 1: in reality, things would get a bit murkier Byte Dance
Speaker 1: intended to leverage the recommendation algorithm that it had developed
Speaker 1: for Totyoo, possibly by taking it from ninety nine Fong,
Speaker 1: although the company would dispute this and then incorporate this
Speaker 1: recommendation algorithm into the app Musical Lee in order to
Speaker 1: supercharge it and to tap into that massive audience, and
Speaker 1: they decided that it made more sense to fold Musical
Speaker 1: Lee into the company's own efforts to launch TikTok. So
Speaker 1: byt Dance made the call to merge these apps together
Speaker 1: and to drop the Musical Lee name in the process
Speaker 1: and instead use the name TikTok. That was a pretty
Speaker 1: gutsy move in America, right because Musical Lee was young,
Speaker 1: but it was firmly established as a brand already, at
Speaker 1: least for its target audience, So making a change like
Speaker 1: that was risky. And really you could say TikTok was
Speaker 1: kind of the product of three different apps. You had
Speaker 1: Musical Lie, you had Duyen, and you had the original
Speaker 1: version of TikTok. The international variant of dou Yen by
Speaker 1: Dance would make great use of its recommendation algorithm on
Speaker 1: the new app, and this is the algorithm that the
Speaker 1: engineers who worked for ninety nine fond claims came from
Speaker 1: their work, which is a claim again that Bitedance continues
Speaker 1: to dispute as well as Susquehanna International Group they disputed
Speaker 1: as well, that again was found in those court records.
Speaker 1: So TikTok essentially becomes a thing officially in early twenty eighteen.
Speaker 1: When we come back, we'll shift over to politics again
Speaker 1: for a bit, because unfortunately that's what this whole mess
Speaker 1: revolves around. But first, let's take a quick break to
Speaker 1: thank our sponsors. All Right, we're back. Let's plunge on
Speaker 1: into the political bit of this story, and that all
Speaker 1: gets started in China itself. So back in the mid
Speaker 1: twenty tens, China started to pass laws that were meant
Speaker 1: to tighten up national security in various ways, and that
Speaker 1: included stuff like, you know, cybersecurity laws and cracking down
Speaker 1: on digital espionage, you know, that kind of stuff. And
Speaker 1: in twenty seventeen, China passed a law called the National
Speaker 1: Intelligence Law of the People's Republic of China. At least
Speaker 1: that's the Western translation this law, and the law covers
Speaker 1: a lot of ground actually, but the bit that really
Speaker 1: sticks out, at least with regard to you know, the
Speaker 1: TikTok mess would really be articles seven and ten. So
Speaker 1: Article seven states that all Chinese citizens and companies and
Speaker 1: organizations are to cooperate in intelligence gathering efforts, and that
Speaker 1: seems to mean that if the Chinese government wants information
Speaker 1: on something and a Chinese company has access to this information,
Speaker 1: that company is obligated to hand it over to the government.
Speaker 1: Article ten says that that goes for you too, two
Speaker 1: companies that are owned by Chinese interests but are actually
Speaker 1: operating overseas. So essentially, the law says it doesn't matter
Speaker 1: if the business practices are outside of China or not.
Speaker 1: If the company that's conducting these matters ultimately is a
Speaker 1: Chinese company, then it is subject to this law, whether
Speaker 1: the business is happening inside China or someplace like the
Speaker 1: United States. Now, how and how frequently the Chinese government
Speaker 1: enforces this law isn't exactly clear, but the implication worries
Speaker 1: a lot of folks internationally for good reason. You know,
Speaker 1: Chinese companies make a lot of stuff, and a lot
Speaker 1: of that stuff ends up in complex critical systems like
Speaker 1: telecommunications infrastructure, for example. So for that reason, countries like
Speaker 1: the United States began to reconsider the wisdom of allowing
Speaker 1: telecommunications companies to use Chinese components in their various systems,
Speaker 1: out of fear that these companies could end up being
Speaker 1: complicit in spying on America on behalf of China, with
Speaker 1: or without that telecommunications companies, you know, knowledge or active cooperation,
Speaker 1: just by using these components that could be snooping on stuff.
Speaker 1: So we in the States started to see calls for
Speaker 1: telecommunications companies to remove and replace these Chinese components with
Speaker 1: stuff from other companies, and that got underway. All right,
Speaker 1: So China passes a law that seems to say any
Speaker 1: Chinese company, et cetera, et cetera, has to comply with
Speaker 1: government requests to gather and share intelligence. Byte Dance is
Speaker 1: a Chinese company, and TikTok is a byte Dance subsidiary.
Speaker 1: So our seed has been planted. Now let's pop on
Speaker 1: over to the old us of a. In twenty eighteen,
Speaker 1: the US government, led by President Donald Trump, got involved
Speaker 1: in a protracted trade war with China, and the issue
Speaker 1: at hand was really a trade deficit, and to go
Speaker 1: into the history of that would require a whole lot
Speaker 1: more time and expertise than I have, just do a
Speaker 1: bad job of describing it, but we can summarize it sloppily.
Speaker 1: I might add by saying that for a few decades now,
Speaker 1: the United States imports from China drastically exceed its exports
Speaker 1: to China. We're bringing in more stuff from overseas than
Speaker 1: we are selling to overseas customers. So the worry is
Speaker 1: that ultimately this could have a huge negative impact on
Speaker 1: American economy and jobs, as well as national security. Whether
Speaker 1: that actually is the case is a lot more complicated,
Speaker 1: and I frankly would go dizzy trying to suss it
Speaker 1: all out. So Trump's administration sought to reverse the trade
Speaker 1: deficit trends, and in order to do that, his administration
Speaker 1: levied tariffs on Chinese imports. And again, going into whether
Speaker 1: or not this was actually a good idea or a
Speaker 1: bad idea would require a lot more time and knowledge
Speaker 1: than I possess, and I don't know ultimately if it
Speaker 1: was a good or bad idea, But I do know
Speaker 1: there were a lot of folks who are at least
Speaker 1: called experts in the field, who debated that topic amongst themselves,
Speaker 1: So I don't know that there's a clear answer anyway.
Speaker 1: As you can imagine, the Chinese government was not thrilled
Speaker 1: about this move. The Chinese government responded by saying that
Speaker 1: Trump's actual goal wasn't to correct some sort of unbalanced
Speaker 1: trade playing field, but rather to directly attack China's economic growth.
Speaker 1: They're saying, oh, you're not trying to fix things. You
Speaker 1: just don't want us to succeed, so you're attacking us,
Speaker 1: which I'm pretty sure is not a really sincere argument,
Speaker 1: but that was the one that was put forth. Things
Speaker 1: got really complicated from an economic standpoint. But this provides
Speaker 1: a pretty good backdrop for what would come next. So
Speaker 1: we get up to the summer of twenty twenty. This
Speaker 1: trade dispute has been going on for two years. President
Speaker 1: Trump says he wants to ban TikTok. He claimed he
Speaker 1: would do this by executive order, and in fact, he
Speaker 1: did issue an executive order to force byte Dance to
Speaker 1: either sell TikTok off or face a ban. In fact,
Speaker 1: for a while he was just saying he was going
Speaker 1: to ban it. That was it, and what no sale
Speaker 1: was just going to be a ban. Byteedance approached Microsoft
Speaker 1: to potentially buy the US portion of the TikTok business
Speaker 1: to kind of spin that off and Microsoft could take
Speaker 1: control of it. But Trump initially rejected that move, but
Speaker 1: Microsoft would remain part of the conversation about a potential
Speaker 1: buyout for about another month. Like this was happening in
Speaker 1: August of twenty twenty, things would move really fast. By
Speaker 1: September twenty twenty, things got real messy. So again Trump
Speaker 1: says he's going to ban the existence of TikTok in
Speaker 1: the United States. And the first time he said that
Speaker 1: was really toward the end of July twenty twenty, but
Speaker 1: then literally just a few days later, Trump reverses his
Speaker 1: stance and he says, you know what, I would allow
Speaker 1: for the sale of TikTok to an American company. Maybe
Speaker 1: we don't ban the app, maybe we do allow it
Speaker 1: to get sold as long as it's to an American company,
Speaker 1: And he establishes a deadline of September fifteenth, twenty twenty,
Speaker 1: and that if a suitable buyer did not emerge by
Speaker 1: that point, he would shut TikTok down with this ban
Speaker 1: by executive order. Now why he wanted to ban TikTok,
Speaker 1: that's a lot harder to say, because it's hard to
Speaker 1: parse what he was trying to convey. He's difficult to
Speaker 1: understand at points. So generally speaking, it seemed that Trump
Speaker 1: believed that although TikTok belonged to a Chinese company, it
Speaker 1: was operating in the United States and that was the issue,
Speaker 1: not from a national security point of view. In fact,
Speaker 1: at one point he said, quote, it's a great asset,
Speaker 1: but it's not a great asset in the United States
Speaker 1: unless they have approval in the United States end quote.
Speaker 1: I don't know what that means. I do not know
Speaker 1: what he was trying to communicate at this point, but
Speaker 1: he did seem to feel that the United States was
Speaker 1: owed some money for the success of TikTok, right like,
Speaker 1: based on what I've read and what I've watched that
Speaker 1: was right around that time period. His argument largely boiled
Speaker 1: down to, hey, Americans are what pushed TikTok to incredible success,
Speaker 1: so America deserves some of that cheddar Now, I don't
Speaker 1: really think that argument holds much water. You know. That's
Speaker 1: like saying to someone that because they were so successful
Speaker 1: in the company, the company deserves all the credit. I
Speaker 1: don't think that really makes sense, but that is what
Speaker 1: I gathered from the material. I mean, that's based upon
Speaker 1: what Trump himself was saying. So again, this was not
Speaker 1: being conveyed in the context of national security. It was
Speaker 1: being conveyed and they got big, So I want the money.
Speaker 1: Microsoft and Oracle were both in talks to acquire the
Speaker 1: US based operations of TikTok from Byteedance, and for a
Speaker 1: while it really did look like something along those lines
Speaker 1: was going to happen. But then TikTok filed some legal
Speaker 1: challenges to this executive orders. Arguments included an accusation that
Speaker 1: Trump's administration failed to produce any evidence that TikTok is
Speaker 1: actually a threat to national security. They're saying like, yeah,
Speaker 1: you're saying that the conditions exist for this to be
Speaker 1: a threat to national security, but you failed to point
Speaker 1: at any actual evidence that it's happening. So just because
Speaker 1: something could happen doesn't mean that you have to ban it. Right, Like,
Speaker 1: any one of you out there could get in your
Speaker 1: car and purposefully drive into crowds of people, but that
Speaker 1: doesn't mean the government has the right to come in
Speaker 1: and say, you know what, we revoked your driver's license
Speaker 1: because you could do this. Even though you haven't done it.
Speaker 1: That's the same sort of thing. Tytuk was saying, Hey,
Speaker 1: you can't ban us on the basis of a threat
Speaker 1: to national security if you can't prove that we're a
Speaker 1: threat to national security. And TikTok would also bring up
Speaker 1: other arguments, saying that this was an unconstitutional move in
Speaker 1: the first place, that it violated First and Fifth Amendment rights,
Speaker 1: and the ban would get moved moved back, like the
Speaker 1: deadline would be moved back a couple of times throughout this,
Speaker 1: and TikTok successfully petitioned a court for an injunction against
Speaker 1: the order to prevent the ban in late September twenty twenty,
Speaker 1: so everything was on hold. Then we get to early
Speaker 1: November twenty twenty, where the US held its previous election
Speaker 1: and President Trump lost that election, a matter of which
Speaker 1: there was some debate. Anyway, this obviously redirected political momentum
Speaker 1: at this point. Right the president who would issued this
Speaker 1: executive order is no longer going to be president after
Speaker 1: January twenty, twenty twenty one, so a lot of the
Speaker 1: pressure that had been on TikTok was alleviated. Was now
Speaker 1: the guy who had made the order wasn't going to
Speaker 1: be in charge anymore. Biden would ultimately revoke that executive
Speaker 1: order with an executive order of his own that happened
Speaker 1: in the summer of twenty twenty one, but he did
Speaker 1: call for an investigation into TikTok to actually determine if,
Speaker 1: in fact there were any threats to national security present.
Speaker 1: And things kind of quieted down for at least a
Speaker 1: couple of months, right like, there was this investigation that
Speaker 1: was going to go on, but otherwise things kind of
Speaker 1: calmed down. But then we get to the end of
Speaker 1: twenty twenty one. That's when we got the Facebook whistleblower event,
Speaker 1: where documents from within Facebook now Meta indicated that a
Speaker 1: lot of shady stuff was going on at a corporate level,
Speaker 1: and it generally raised concerns about social platforms across the spectrum,
Speaker 1: which included TikTok. So leaders were starting to raise some
Speaker 1: pretty tough questions about how these companies collect, use, and
Speaker 1: protect or failed to protect user information, and the specter
Speaker 1: of potential Chinese surveillance resurfaced. Now Over at TikTok, efforts
Speaker 1: were underway to distance the company from byteedance, at least
Speaker 1: on surface appearances. So those efforts got the nickname Project Texas.
Speaker 1: The whole idea was that TikTok's US operations would flow
Speaker 1: through servers that were owned and operated by Oracle, and
Speaker 1: Oracle's an American company that's based in Texas, thus the
Speaker 1: nickname Project Texas. This project had its roots in the
Speaker 1: days when Oracle was in consideration to acquire TikTok's US
Speaker 1: operations from byte Dance. Now that never happened, but the
Speaker 1: move to silo TikTok's US data from the rest of
Speaker 1: international operations did continue, and the effort really ramped up
Speaker 1: in twenty twenty two. However, subsequent reporting by Fortune revealed
Speaker 1: that several former TikTok employees claimed the efforts were quote
Speaker 1: unquote largely cosmetic. One former data scientist at TikTok named
Speaker 1: Evan Turner said that TikTok regularly received direction from byte
Speaker 1: Dance while outwardly posing as being largely independent of their
Speaker 1: parent company. So to outward appearances, they were saying, no,
Speaker 1: we're completely distinct, we are US based and US operated,
Speaker 1: but then behind the scenes, Bite Dance was very much
Speaker 1: pulling the strings. Now. Turner claimed that while he he
Speaker 1: regularly had to send reports to byte Dance, and that
Speaker 1: these reports included these spreadsheets that had tons of American
Speaker 1: user data on them, primarily at least apparently in an
Speaker 1: effort to refine the recommendation algorithm to drive better engagement. So,
Speaker 1: you know, that's not great. It's not great to hear that,
Speaker 1: but it's not quite a national security threat, right if
Speaker 1: that's in fact, all that was going on was that
Speaker 1: this was an effort for engineers back at byte Dance
Speaker 1: to make even more addictive recommendation algorithms. That's not the
Speaker 1: same thing as collecting information for the purposes of surveillance.
Speaker 1: But you know, we don't know if that's all that
Speaker 1: was going on. Actually, we don't even know if that
Speaker 1: was going on. That's been under dispute as well. TikTok's
Speaker 1: CEO a man named Shaozi Chu who originates from Singapore,
Speaker 1: which is not, despite what some American politicians appeared to believe,
Speaker 1: part of China. He has appeared before Congress and claimed
Speaker 1: that TikTok is as American as apple Pie, which I
Speaker 1: think is more Canadian than American, but whatever, And he
Speaker 1: has maintained that the company TikTok does not work closely
Speaker 1: with byte Dance, so there's definitely conflicting information going on here.
Speaker 1: He previously served as chief financial officer for a byte Dance,
Speaker 1: so that also raises concerns, right, like, yeah, he's from Singapore,
Speaker 1: he's not a Chinese citizen, but he was also the
Speaker 1: CFO for byte Dance, a Chinese company that does reserve
Speaker 1: a seat on its board for a member of the
Speaker 1: Chinese Communist Party. That in itself is not unusual for
Speaker 1: big companies in China. So the fear is that perhaps
Speaker 1: he's hiding the real relationship between the parent company and
Speaker 1: the subsidiary. In fact, you know, I mentioned earlier that
Speaker 1: law about intelligence in China, and I mentioned that it
Speaker 1: has sections that say, part of the responsibility is that
Speaker 1: China these organizations have to gather intelligence, whether they are
Speaker 1: domestic or foreign in operation, but they also are supposed
Speaker 1: to do so in secret. They're not supposed to admit
Speaker 1: or reveal that that's in fact happening. So you could
Speaker 1: make the argument that, well, of course, he says TikTok
Speaker 1: doesn't gather information on behalf of byte Edance because he
Speaker 1: can't because of the nature of the Chinese company, and
Speaker 1: that there's this law that says he cannot say that
Speaker 1: even though he himself is not a Chinese citizen, he's
Speaker 1: the CEO of a company that is owned by a
Speaker 1: Chinese company. So it gets very complicated. But that's not
Speaker 1: exactly hard evidence of wrongdoing, right. You can't say for
Speaker 1: sure that because this is you know, potentially possible, that
Speaker 1: it's really you know, plausible, or that really is happening.
Speaker 1: And TikTok representatives have said that the various allegations that
Speaker 1: were made by former employees that were reported on in
Speaker 1: Fortune all related to times that itsed before Project Texas
Speaker 1: was fully operational, and that those complaints are no longer relevant,
Speaker 1: that none of that actually applies to the TikTok of today.
Speaker 1: So you've got that too. All right, We're gonna have
Speaker 1: to take another quick break when we come back. I've
Speaker 1: got a lot more to say about the things that
Speaker 1: escalated and eventually led to this legislation that could potentially
Speaker 1: ban TikTok, But first let's take another quick break. Okay,
Speaker 1: we're back. So in late twenty twenty two, we had
Speaker 1: another scandal involving TikTok and Byte Dance. Forbes published a
Speaker 1: piece that said that Byte Dance had used TikTok to
Speaker 1: spy on Forbes' journalists, and that Byte Dance essentially had
Speaker 1: this list of journalists who were covering byte Dance, and
Speaker 1: they decided to use TikTok to figure out where these
Speaker 1: journalists had been going. They wanted to identify their IP
Speaker 1: addresses and then track these journalists, and this was supposedly
Speaker 1: in order to figure out who the journalists were meeting
Speaker 1: with within Byte Dance to find the source of internal
Speaker 1: leaks from within the company, and they were using TikTok
Speaker 1: as the data gathering tool to do this, which is
Speaker 1: kind of like the nightmare scenario. Right here we have
Speaker 1: the smoking gun of byte Dance using access of TikTok
Speaker 1: to track people, including American citizens. So Forbes publishes these
Speaker 1: claims and Byte Dance responds by firing or forcing to
Speaker 1: resign the people who were connected to the tracking efforts
Speaker 1: within the company. So, like the guy who supposedly oversaw
Speaker 1: the efforts and his direct boss, they left the company. Now,
Speaker 1: whether this was an indication that the decision to track
Speaker 1: journalists was actually localized to a lower spot on the
Speaker 1: corporate higher and thus like executive level you know, c
Speaker 1: suite level leaders had no knowledge of this project, or
Speaker 1: if this was like a cover up where you know,
Speaker 1: the people were fired in order to preserve plausible deniability,
Speaker 1: I don't know, but Byte Dance's leadership was essentially saying
Speaker 1: this was unacceptable. We didn't approve this. You know, the
Speaker 1: executive leadership did not approve this. This was done by
Speaker 1: lower level management. We're dealing with it internally to make
Speaker 1: sure it never happens again. But whether that was sincere
Speaker 1: or not, it certainly did not win byte Dance or
Speaker 1: TikTok any confidence points in the United States. Now, we
Speaker 1: started to see movement in the US as various government
Speaker 1: agencies and college campuses and some other organizations began to
Speaker 1: ban TikTok to some extent. So with government agencies, the
Speaker 1: usual move was to forbid staff from installing TikTok on
Speaker 1: government owned devices, but employees could still have TikTok on
Speaker 1: their personal devices. Personally, I think this is entirely reasonable.
Speaker 1: I think it's the same as if you get a
Speaker 1: company issued laptop and they say, hey, don't go installing
Speaker 1: Stardu Valley on this thing, because that's not what this
Speaker 1: is for. And I'm like, I think that's totally reasonable.
Speaker 1: It's not your computer. It belongs to the corporation or,
Speaker 1: in the case I'm talking about here, to the state
Speaker 1: or federal government, and therefore they do have some authority
Speaker 1: over what should and should not be installed on that
Speaker 1: over at college campuses, the general approach to banning TikTok
Speaker 1: was to block TikTok traffic across college servers. So you
Speaker 1: could still access TikTok through cellular data or through some
Speaker 1: other Wi Fi network, You just couldn't do it through
Speaker 1: college operated Wi Fi. So there were, you know, limits
Speaker 1: to these bans. In May twenty twenty three, the state
Speaker 1: of Montana became the first in the United States to
Speaker 1: ban TikTok. The state government argued that TikTok represented a
Speaker 1: threat to the private data and security of Montana's citizens,
Speaker 1: and that the Chinese government in general was a huge
Speaker 1: threat to national security, and the law stated that app
Speaker 1: stores that would continue to offer TikTok to Montana citizens
Speaker 1: could face a fine of up to ten thousand dollars
Speaker 1: per day of violations. The law was due to take
Speaker 1: effect on January one, twenty twenty four. However, in November
Speaker 1: twenty twenty three, a federal judge blocked the law, citing
Speaker 1: concerns that Montana could be violating the First Amendment of
Speaker 1: the US Constitution, and the judge argued that it was
Speaker 1: not the state of Montana's responsibility to determine matters of
Speaker 1: national security. That is a federal concern, not a state
Speaker 1: level concern, and that further, the move in Montana appeared
Speaker 1: to have a greater connection to xenophobia than a legitimate threat.
Speaker 1: There was no evidence, again shown that TikTok actually did
Speaker 1: represent a threat, just this kind of overall vague glegation.
Speaker 1: The First Amendment argument is one that is likely to
Speaker 1: come up again, you know, assuming that Biden actually does
Speaker 1: sign this into law, which I believe he will. I mean,
Speaker 1: he said he would as soon as it was announced
Speaker 1: that it had passed the Senate. He said he would
Speaker 1: sign it into law today. So again, by the time
Speaker 1: you hear this, that might already be the case. The
Speaker 1: American Civil Liberties Union or ACLU, maintains that a ban
Speaker 1: on TikTok amounts to a violation of the First Amendment.
Speaker 1: So I just can't imagine a world in which TikTok,
Speaker 1: you know, kind of rolls over and says, oh, well,
Speaker 1: we had a good run. That's not going to happen.
Speaker 1: I mean, obviously there's going to be a fight on
Speaker 1: this to force further decisions among the judicial branch about
Speaker 1: whether or not this law is constitutional. Anyway, the political
Speaker 1: move to ban TikTok grew in momentum in the back
Speaker 1: half of twenty twenty three and into twenty twenty four.
Speaker 1: The House of Representatives passed a bill back in March
Speaker 1: that was to force byte Dance to divest itself of
Speaker 1: TikTok the US operations of TikTok within six months or
Speaker 1: face a national ban, which would essentially amount to the
Speaker 1: United States government for seeing app stores and communications networks
Speaker 1: from allowing TikTok traffic in the US kind of a
Speaker 1: grander scale of what we're seeing on college campuses, just
Speaker 1: going across the entire nation. That would not only stop
Speaker 1: new downloads of the app, but also all TikTok transmissions
Speaker 1: in general in the US. Though I suppose you could
Speaker 1: use a VPN and connect to another country, like a
Speaker 1: server in another country to get around some of that,
Speaker 1: but it's a bit of a hassle, and I don't
Speaker 1: know what that would do to your recommendation algorithm. Honestly,
Speaker 1: I don't know if it varies from country to country.
Speaker 1: But anyway, at the time when the House first passed
Speaker 1: this bill, I thought that the US Senate would be
Speaker 1: unlikely to follow suit. The deadline meant that a rapidly
Speaker 1: approaching ban would be really big news at the same
Speaker 1: time as the election cycle, and a TikTok ban is
Speaker 1: really an unpopular move among a significant population of US citizens.
Speaker 1: You know, folks who could potentially vote, assuming that they're
Speaker 1: eighteen or older, or not vote, like just choose not
Speaker 1: to vote because they're ticked off. And I think a
Speaker 1: lot of senators worried that supporting a bill that would
Speaker 1: be you know, coming into effect right around that time,
Speaker 1: would be political suicide with elections coming up this coming November.
Speaker 1: But then US Senator Maria Cantwell proposed that the House
Speaker 1: amend its approach and extend the deadline to one year
Speaker 1: instead of six months. Now. The reason given was that
Speaker 1: one year is a more reasonable timeline for byte Dance
Speaker 1: to secure a buyer for the company, which is true.
Speaker 1: I mean, six months is not much time, but some
Speaker 1: senics were suggesting that another reason for this change would
Speaker 1: be it pushes the effects of the bill out beyond
Speaker 1: the election cycle. Whatever the justification, the US House voted
Speaker 1: to extend that deadline, and then the House lumped the
Speaker 1: TikTok bill in with a bunch of other measures that
Speaker 1: were meant to provide aid to Ukraine and Israel. The
Speaker 1: bundle of bills then passed to the Senate. The Senate
Speaker 1: voted in favor of them, seventy nine in favor, eighteen opposed,
Speaker 1: and by said he would sign the bill into law
Speaker 1: today and the clock started ticking. So some other things
Speaker 1: we do need to consider before we wrap up here.
Speaker 1: While much of the rhetoric around TikTok has centered on
Speaker 1: this threat to national security from an intelligence gathering perspective,
Speaker 1: you know, the idea that TikTok could be used to
Speaker 1: spy on America, there's another component that also deserves consideration,
Speaker 1: and that's the foreign control over domestic broadcast operations. So
Speaker 1: if you go all the way back to nineteen thirty four,
Speaker 1: the United States has maintained that it's just not a
Speaker 1: good idea to allow a foreign government or a foreign
Speaker 1: government's representative, like a foreign owned company to have ownership
Speaker 1: of broadcast businesses within the United States. Now, this all
Speaker 1: started with radio licenses. The Communications Act of nineteen thirty four,
Speaker 1: Section three ten A prohibits such a thing with foreign
Speaker 1: governments or its agents and radio licenses. Now, the concern
Speaker 1: is that a foreign controlled communications entity could spread propaganda
Speaker 1: to the US public, potentially threatening national security in the process.
Speaker 1: And so another aspect of this ban on TikTok resides
Speaker 1: in the company's potential role as a means to spread
Speaker 1: messages that benefit China's goals, whether that's to downplay China's
Speaker 1: own involvement in international affairs or to promote certain narratives
Speaker 1: that align with China's own strategies. It can include disrupting
Speaker 1: US elections by attempting to either push people to support
Speaker 1: specific people whom China has deemed as being of greater
Speaker 1: benefit to China itself, or just discouraging people from participating
Speaker 1: in the democratic process at all. It could include shaping
Speaker 1: public opinion on matters ranging from trade to international conflicts,
Speaker 1: including stuff that's going on right now, like between Israel
Speaker 1: and Palestine. And you know, I'm sure a lot of
Speaker 1: y'all out there are aware that China is very much
Speaker 1: using social platforms to do this kind of thing, like
Speaker 1: that's not under dispute. It is happening. But here's the deal.
Speaker 1: China's doing this on platform that include ones that China
Speaker 1: does not have any control over. Agents working on behalf
Speaker 1: of China, either with or without the nation's direct support,
Speaker 1: have used platforms like x formerly known as Twitter, as
Speaker 1: well as Facebook and YouTube and others to spread this
Speaker 1: kind of messaging. And China does not have ownership in
Speaker 1: these companies, but they're still leveraging them to achieve that goal.
Speaker 1: So one could argue that whether China has a stake
Speaker 1: in TikTok or not ultimately is immaterial because the problem
Speaker 1: exists either way, and that problem is much larger than
Speaker 1: who ultimately owns TikTok, which brings us to the whole
Speaker 1: issue of the US's overall terrible lack of data protection
Speaker 1: and privacy laws. But that's a matter for another episode. However,
Speaker 1: we do have to acknowledge that there has been evidence
Speaker 1: of China interfering with how TikTok promotes and shares videos
Speaker 1: relating to sensitive topics in China. Late last year, the
Speaker 1: Network Contagion Research Institute published to report that claimed that
Speaker 1: they analyzed hashtag ratios on TikTok quote across topics sensitive
Speaker 1: to the Chinese government end quote and compare them with
Speaker 1: ones from other social platforms, and they said that they
Speaker 1: found anomalies that could mean quote TikTok systematically promotes or
Speaker 1: demotes content on the basis of whether it is aligned
Speaker 1: with or opposed to the interests of the Chinese government
Speaker 1: end quote. So according to this research, it is possible
Speaker 1: that TikTok is a more active tool for China to
Speaker 1: spread messaging internationally or to suppress messages that it deems sensitive.
Speaker 1: And while China can leverage other platforms to try and
Speaker 1: spread messages, it doesn't have that level of control on
Speaker 1: other platforms beyond TikTok. So you could say that in
Speaker 1: that regard specifically, this is a very China centered problem.
Speaker 1: Now we have to go back to jeff yas So
Speaker 1: back in twenty twenty, Donald's Trump calls for a ban
Speaker 1: on TikTok, and his reasons for doing so are at
Speaker 1: best muddled, But he's really firm on the fact that
Speaker 1: he is gosh darn it gunna ban TikTok. But the
Speaker 1: band gets postponed due to legal challenges, and Trump gets
Speaker 1: voted out and the matter kind of fizzles. Now, as
Speaker 1: we have this new ban that's one backed by Congress
Speaker 1: and two supported by Joe Biden, Trump has spoken out
Speaker 1: against the ban. So why does he oppose a ban
Speaker 1: now when he was calling for one four years ago. Well,
Speaker 1: his reasons for opposing the ban are I would argue,
Speaker 1: equally as muddled as his reasons calling for one in
Speaker 1: the first place. Generally, he seems to say we shouldn't
Speaker 1: ban TikTok because a lot of people happen to like it.
Speaker 1: And I mean that's true, there are a lot of
Speaker 1: people who like TikTok, But I don't know that that's
Speaker 1: the argument you make to oppose a ban, but it's
Speaker 1: the one that he offered. Now he has associated this
Speaker 1: ban with Joe Biden. Like he's not so much saying
Speaker 1: why he thinks the band's a bad idea, he's more
Speaker 1: we are concentrating on saying Biden is the one banning TikTok.
Speaker 1: So really it seems to be a political maneuver. You know,
Speaker 1: TikTok is popular with a lot of people. Biden supports
Speaker 1: the legislation calling for the ban. So Trump wants to
Speaker 1: win the election in November, so you make sure your
Speaker 1: opponent is associated with a really unpopular bill. Never mind
Speaker 1: if you yourself initially called for the very same thing
Speaker 1: four years ago and did so by executive order. But
Speaker 1: another potential reason for Trump's change of heart goes back
Speaker 1: to Jeff Yas. So Jeff Yas is a mega donor
Speaker 1: to conservative campaigns. In fact, he's like the biggest donor
Speaker 1: to GOP campaigns in the United States, and he met
Speaker 1: with Trump back in March of this year. So the
Speaker 1: two people meet, the biggest donor to conservative campaigns in
Speaker 1: the United States and the presidential nominee for the GOP.
Speaker 1: At this point, Trump's tune regarding TikTok changes. Now. I'm
Speaker 1: not saying Trump changed his approach simply cause a guy
Speaker 1: with exceedingly deep pockets, a guy whose wealth is heavily
Speaker 1: dependent upon byte dance, and by extension, TikTok told Trump
Speaker 1: that Trump needs to oppose the ban if he wants
Speaker 1: access to some of that sweet, sweet money. I'm not
Speaker 1: saying that happened. I'm just saying I wouldn't be at
Speaker 1: all surprised if this is a big part of it. Trump,
Speaker 1: as you might know, definitely needs the cash because it
Speaker 1: is way easier to spend other people's money when you
Speaker 1: owe courts hundreds of millions of dollars than it is
Speaker 1: to spend your own money. But yeah, it seems that
Speaker 1: a conservative billionaire who has most of his wealth tied
Speaker 1: up with a Chinese company is spending a lot of time, effort,
Speaker 1: and yes, money to fight off a threat to his fortune,
Speaker 1: and that the beneficiaries of his donations are eager to
Speaker 1: play a part in that. So it all comes down
Speaker 1: to money, and that's kind of where we're at now.
Speaker 1: You might wonder what's my opinion on the whole thing,
Speaker 1: in case it's not obvious, Well, I don't like TikTok,
Speaker 1: but I also so don't necessarily think TikTok represents the
Speaker 1: really huge problem that other people do or rather to clarify,
Speaker 1: I think TikTok is a problem, but it's a subset.
Speaker 1: It's a smaller problem in a much much larger bubble
Speaker 1: that so far has gone largely unaddressed in the United States.
Speaker 1: That unless leaders take a look at the bigger picture
Speaker 1: of data privacy and security and they make some real changes.
Speaker 1: TikTok's ownership or even TikTok's existence is kind of not important,
Speaker 1: at least not from a national security level, because I
Speaker 1: don't really think there's much that TikTok could do that
Speaker 1: other platforms aren't already doing as well, like American platforms,
Speaker 1: and I mean even like American platforms doing things that
Speaker 1: benefit China. So whether that's gathering bookoos of information on
Speaker 1: every single user, as well as people those users interact with,
Speaker 1: whether they're on the platform or not, to the spread
Speaker 1: of propaganda and misinformation, into designing ways to ca attention
Speaker 1: and to hold it potentially to the detriment of users
Speaker 1: and society in general. All that is happening whether you
Speaker 1: snuff out TikTok or you allow it to continue. So
Speaker 1: killing TikTok doesn't fix the problem. It's like putting a
Speaker 1: little band aid on a big, old, gaping wound. Now.
Speaker 1: I'm also not a big fan of the politics around this.
Speaker 1: That might surprise you considering how much time I spent
Speaker 1: on it, but I'm not. I find the whole politics
Speaker 1: thing incredibly distracting because to me, it feels like theater.
Speaker 1: It feels like it's a show that's being put on
Speaker 1: and it's focusing on an easy target. Also, a lot
Speaker 1: of the rhetoric around this starts to feel really xenophobic, Like,
Speaker 1: you know, there are legitimate reasons to worry about China's influence.
Speaker 1: There's no denying that there are good reasons to worry
Speaker 1: about that. However, a lot of the messaging, a lot
Speaker 1: of the speeches, a lot of the conversations that we've seen,
Speaker 1: like the interrogations in Congress when you've got TikTok's CEO
Speaker 1: up there, they come across less about legitimate concerns about
Speaker 1: China and more, you know, kind of racist, and you
Speaker 1: know there's there's obviously fuzzy ground here. Like again, there
Speaker 1: are legitimate concerns, but the way they're being communicated doesn't
Speaker 1: come across as sincere. And then you start to worry
Speaker 1: that this is like watching a pro wrestling show where
Speaker 1: the face is getting the crowd to chant usa usa
Speaker 1: usa against a foreign character. Heel. It's not a good look.
Speaker 1: So again, the whole thing is a mess, and it's
Speaker 1: not ending here. We've got the legal challenges to look
Speaker 1: forward to, so to speak, and the outcome from that
Speaker 1: is far from certain, so I'm sure we will revisit
Speaker 1: this to find out. You know, will the US ban TikTok,
Speaker 1: will TikTok be forced to be spun off and sold
Speaker 1: to American company, or will the whole thing get dismissed
Speaker 1: on constitutional grounds, or will something else entirely happen. I
Speaker 1: don't know. I'm not going to make any predictions at
Speaker 1: this point because the last one I made was that
Speaker 1: the Senate was not to support this, and I was
Speaker 1: totals wrong about that. So we're dropping it off here.
Speaker 1: But I wanted to give the update and give the
Speaker 1: context and the understanding of all the things that are
Speaker 1: going on, because it is a complicated subject. I hope
Speaker 1: all of you out there are well. I hope you
Speaker 1: are staying sane in this crazy world of ours, and
Speaker 1: I'll talk to you again really soon. Tech Stuff is
Speaker 1: an iHeartRadio production. For more podcasts from iHeartRadio, visit the
Speaker 1: iHeartRadio app, Apple Podcasts, or wherever you listen to your
Speaker 1: favorite shows.