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Failnaught Liu

Failnaught Liu

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Why TikTok Can't Escape This Disaster This Time

#TikTok#中美关系#数据安全70
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The article discusses the ongoing challenges TikTok faces in the U.S. regarding its potential separation from its parent company, ByteDance. Following failed attempts by the Trump administration to ban TikTok, the Biden administration is now pushing for legislation that could force a sale or ban. The federal appeals court recently upheld the separation proposal, leading to mixed public opinions on TikTok's future. Key points include: 1. **China's Position**: Chinese laws require companies to cooperate with the government, creating barriers to TikTok's separation from ByteDance, especially concerning algorithm exports. 2. **U.S. Concerns**: The U.S. fears TikTok poses national security risks, such as potential data access by the Chinese government and its influence on public opinion through its recommendation algorithms. 3. **TikTok and ByteDance Relationship**: TikTok relies heavily on ByteDance for its technology and algorithms, making a complete separation unlikely. 4. **Possible Outcomes**: - **Complete Separation**: Unlikely due to Chinese government opposition. - **Ban**: Possible but not beneficial for any party involved. - **Partial Separation**: Selling assets excluding algorithms seems most feasible, balancing interests of the U.S. and China while allowing ByteDance to mitigate losses. - **Supreme Court Rejection**: Unlikely, as the current legislative process has stronger legitimacy than past attempts. In conclusion, the article suggests that a complete ban on TikTok is not the best choice for any stakeholder, and a partial separation that excludes the algorithm is the most viable solution.

Why I Think TikTok Can't Escape This Crisis#

Background#

• After the Trump administration's failed attempt to ban TikTok, the U.S. is trying again to push for TikTok's separation from ByteDance through legislation, namely the "Sell or Shut Down" bill. TikTok has sought help from the last line of defense in the U.S. judicial system—the Federal Circuit Court.
• However, the Federal Circuit Court recently ruled to uphold the separation bill. Public opinion is divided: some believe TikTok can't escape this crisis, while others think it will ultimately delay through appeals for years, just like in 2020, or even overturn the ban.

Core Contradiction#

The TikTok issue can be analyzed from three perspectives:

  1. China's Position

According to China's Cybersecurity Law and related regulations, Chinese companies must cooperate with the government in providing information. Additionally, the Chinese government explicitly requires that the export of core technologies, such as algorithms, must be approved, creating institutional barriers for TikTok's separation.

  1. U.S. Concerns

The U.S. believes TikTok may pose a threat to national security. Although there is currently no clear evidence, potential risks include:

• The Chinese government could potentially access U.S. user data through ByteDance.

• TikTok's powerful recommendation algorithm and its influence could be used as a tool for public opinion. For example, TikTok has called on users to contact lawmakers to oppose related bills, an action some view as interference in democratic processes.

  1. The Relationship Between TikTok and ByteDance

Although TikTok is registered as a U.S. company, its technology, core algorithms, and backend support almost entirely rely on ByteDance. The algorithm is TikTok's core asset, and the Chinese government is unlikely to allow its sale. Moreover, TikTok's global operational model heavily depends on ByteDance's resources, including cheap domestic labor and various subsidy policies.

My Analysis#

I believe the outcome may unfold in one of the following four scenarios:

  1. Complete Separation: TikTok is sold entirely, completely severing ties with ByteDance.

The likelihood is extremely low. The Chinese government has clearly opposed the sale of algorithms, which involves core technology security, leaving almost no room for maneuver.

  1. Refusal to Separate and Being Banned: TikTok is forced to exit the U.S. market.

There is a certain possibility, but it does not align with the interests of all parties:

• U.S. Government: Banning TikTok may provoke public backlash and allow giants like Meta or Google to seize the market, further exacerbating monopoly issues. At the same time, the rights of U.S. investors would also be difficult to protect.

• Chinese Government: A ban offers no real benefits to China and is more of a symbolic pressure tactic.

• ByteDance: Losing the U.S. market would result in significant financial losses, especially considering the long-term investment in TikTok.

  1. Partial Separation (Excluding Algorithms): Selling assets other than the algorithm to a U.S. company.

This is currently the option that best aligns with the interests of all parties:

• U.S. Government: No need to ban TikTok while alleviating security concerns.

• Chinese Government: Avoid the loss of core algorithms.

• ByteDance: By selling, it can recoup funds and partially mitigate losses.

Potential buyers could be giants already capable of recommendation algorithms, such as Microsoft; or investors with e-commerce interests, such as Walmart.

  1. Bill Rejected by the Supreme Court: TikTok gains legal protection.

The likelihood of this outcome is relatively low. This case differs from the situation in 2020; the separation bill is driven by Congress and signed by President Biden, granting it greater legitimacy.

Why is the likelihood of the bill being rejected low?#

  1. The Close Relationship Between TikTok and ByteDance

Multiple hearings have shown that TikTok has consistently failed to provide a convincing plan to sever ties with ByteDance. Its data is stored in the U.S., but its technical operations and algorithms rely on ByteDance's team in China, a structure that is unlikely to satisfy U.S. lawmakers. Although the data is in the U.S., it does not mean that employees of ByteDance in China or the U.S. do not have access to the data.

  1. Pressure on the Supreme Court

• The 2020 ban on TikTok was a presidential order from Trump, at which time the Supreme Court could question administrative judgments. However, this separation bill has undergone congressional review and presidential signing, giving it stronger legitimacy and significantly increasing the pressure on the Supreme Court to reject it.
• The Federal Circuit Court has clearly ruled that the essence of the TikTok issue lies in national security, not freedom of speech, and that the judiciary should avoid interference as much as possible. If the Supreme Court intervenes, it would mean questioning the judgments of the executive, legislative, and intelligence agencies, which is almost impossible.

  1. TikTok's Uncooperative Attitude

• TikTok has shown no willingness to rectify or compromise, instead continuing to expand its technical team.
• Its algorithm model has been trained in the U.S., violating relevant Chinese regulations, creating a "double bind" that leaves both sides unable to back down.

Possibility of Trump Intervention#

  • Trump's words are not reliable, such as his comments about disinfectants and the idea of granting green cards to international students upon graduation, which are unrealistic.
  • Trump's appointed Secretary of State, Rubio, is one of the leading lawmakers pushing to ban TikTok.
  • Trump stated he does not wish to ban TikTok but did not say he opposes a sale; a sale would also satisfy investors' interests.

Conclusion#

  1. The likelihood of the Supreme Court rejecting the bill is extremely low, and it may even refuse to hear it.
  2. The close relationship between TikTok and ByteDance makes it unlikely for either the U.S. or China to make unilateral concessions.
  3. A complete ban on TikTok is not the best choice for any party; partial separation (excluding algorithms) is the most feasible solution.
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