Time's Up for TikTok?

what that is briefly. It's an online video sharing app that let's users create videos, typically stuff like lip sinking videos using an archive of sound clips. But they could also shoot very short, like you know, fifteen second long videos that can be anything from a stunt to a joke. Uh. They can even create really sophisticated editing tricks to make it look like you're doing you know, magic tricks and stuff.

They could use reply feature to create a duet like experience where you can create a video that's sort of in response to a previous video and have them play side by side and create the appearance of an interaction between the two. It's pretty cool stuff. Lots of folks have used TikTok creatively, from making political or social commentary to you know, doing those kind of cool special effects

sort of videos. I've seen some really clever ones, and there's good stuff, and of course there's plenty of bad stuff on there too. And by bad, I don't just mean folks who haven't mastered the skills of creating videos, but also people just you know, behaving badly, spreading misinformation or disinformation, or being hateful. In other words, it's a microco some of the Internet at large. TikTok was already in the news back in March. Now it's August twenty twenty.

I had to look to make sure and uh, TikTok is popping up in headlines again, and enough has happened since that March episode that I kind of needed to do another episode about this. Part of that is because the President of the United States has a bit of a vendetta against the service. Now, as I record this, he has signed an executive order to impose sanctions against TikTok. But by the time you hear this episode, I'll expect we'll understand a little more regarding how those sanctions will

play out. We've got some hints right now, but it's still kind of vague. The assumption right now is that American companies will be banned from advertising on TikTok, you know, advertising is kind of where TikTok gets its revenue, and that companies like Apple and Google will remove TikTok from their app store, respectively. Trump also stated that the sanctions will hit unless the company agrees to a deal where

some US company will acquire it. In other words, it will move from the hands of ownership it currently sits in to new ownership. Now, I'll get back to some of the reasons that the Trump campaign and administration may have to pursue a campaign against TikTok beyond the you know, stated reasons. They don't all have to do with trade wars and national security in other words, but we'll get to that towards the end. Now, another reason TikTok is in the news is because Microsoft is making a move

to purchase some or perhaps all of TikTok. It all depends on the reports you read and believe, and whether or not it's it talks to acquire some of it or the whole ding dang durn thing. I mean, at the time I'm recording this. Microsoft disputes that it's after the whole company. Part of it has to do with an ongoing discussion about whether or not TikTok stands as a threat to national security in the United States, because again, the parent company for TikTok is a Chinese company called

byte Dance. So when Trump is saying an American entity must buy TikTok, the current candidate to do just that happens to be Microsoft. But what I really want to focus on for much of this episode is what Microsoft and the US government are kind of using as a justification to rest ownership of TikTok away from byte Dance,

at least in some parts of the world. And that's the Committee on Foreign Investment in the United States or c f i u S. Because whether you care about TikTok or not, this committee has played a big part in several big moves in the tech industry, or in some cases prevented big moves from ever happening. So let's trace the history of this committee, because until recently, I don't think a lot of people had heard about it.

Even out you may not have heard about it unless you were specifically looking into news stories about all this stuff, but the Committee has been active for a while and has been instrumental in some major deals, and yet tends to kind of get overlooked. By the end of this episode, I'll talk more about what's specifically going on with TikTok, as well as my own sort of complicated thoughts on the whole thing, because this is one of those situations

where I really don't know what the right move is. Now. Like a lot of historical stories, it can be tricky to figure out just where I should begin with this one. I mean, you can cite a specific law or action, but chances are whatever you site will have a precedent. And I don't want to trace this all the way back to the founding of the United States or even further back than that. But really we need to focus

on the modern industrial age. So for that reason, I'm going to talk first about the War Powers Act of World War Two. Nineteen forty one, Japanese forces attacked the US at Pearl Harbor in Hawaii. Two weeks later, the U. S Government put into place the War Powers Act of nineteen forty one. This act expanded the federal government's powers and authority, giving the Executive Branch. For those who are not familiar, that would be the branch that the president

is in. Gave that branch a great deal of flexibility to reshape the government to focus efforts on all things related to war. Then you had the War Powers Act of nineteen forty two. That one gave US military branches the authority to seize US land for the purposes of establishing and expanding bases, among other things, and it also allowed the government to fast track the research and development

of atomic weapons, leading to the Manhattan Project. The president here was that in times of national emergency, the federal government could expand powers beyond what would normally be acceptable in the United States. By nineteen fifty, the US was in a post World War to boom period. But that year the Korean War started and the US got involved. While the central conflict was in Korea. For the US, this was part of an ongoing power struggle with the

then Soviet Union. The US government passed a law called the Defense Production Act of nineteen fifty. This law granted powers to the US president to influence domestic businesses for the purposes of national defense. The ideas that, again, in a time of crisis, the president can command industry in this country to provide what is deemed quote essential materials and goods end quote for the purposes of boosting national defense.

So now the powers of the government were again expanded and president was set in which a U. S President could issue directives to private industry. By the way, if you are so inclined, that act is available for free on the internet. You can read the whole darn thing if you like. It's more than a little dry, if I'm being honest. This brings us up to nineteen seventy. Coincidentally, the year I was born. Gerald Ford, who had served as vice president to Richard Nixon, was president at this point.

After Nixon had resigned due to the Watergate scandal, Ford issued an executive order, Executive Order number one one eight five eight to be precise, titled quote foreign investment in the United States in the quote, and this executive order cited section seven twenty one of the Defense Production Act of nineteen fifty. So there's a lot that we have to unpack here. First, What exactly is an executive order? Well, it's an official directive from the President of the United States.

The commands some action of the federal government. Every president in US history has signed at least one executive order. George W. Bush signed two d ninety one of them during his two terms. That made him the president who issued the most executive orders in history. Executive orders are legal documents and typically instruct various government powers to take

specific actions. They're not always straightforward legal documents, and they are sometimes controversial, and occasionally they end up being challenged or even ignored. Okay, So what was Section seven twenty one of the Defense Production Act of nineteen fifty as amended? Because the Act has been amended since it was first issued in nineteen fiftyes, so that's how we refer to

it now. Well, Section seven twenty one falls under the General Provisions under Title seven of the Act, and the title of that section is quote Authority to review certain mergers, acquisitions, and takeovers end quote. Now, essentially, this part of the Act established the authority of the federal government to investigate any planned major changes in ownership among certain companies. Certain doesn't really get defined, but the implication is companies that

are important to the welfare of the United States. So the idea here is that some companies might be vitally important to the US and for national security, and so the ownership of those companies is a matter of national interest. It's also important if you want to avoid situations such as monopolies, where a single company or really a small group of companies dominates an industry to a point that

it hurts citizens and it discourages competition. The Act expressly gives the President authority to quote take such action for such time as the President considers appropriate, to suspend or prohibit any covered transaction that threatens to impair the national security of the United States end quote. Covered transaction just means that certain types of transactions like mergers and acquisitions are specifically covered by the section. The big, big time stuff.

Not like this company has gone into a limited partnership with this other company for the purposes of this one and only thing that would probably fall outside of covered transactions. So the US President may halt any covered company transaction that could stand as a threat to US security. Now there's a lot more nuanced to this, but there's not much point in going through it all in this podcast.

It would get bogged down super fast. Ford's executive order officially established the Committee on Foreign investment, which was first outlined in that nineteen fifty Act and the original Acts stated that the membership of this committee would include the following US officials Secretary of the Treasury, Secretary of Homeland Security, Secretary of Commerce, Secretary of Defense, Secretary of State, the Attorney General of the United States, the Secretary of Energy.

And then there were two non voting members of the committee, the Secretary of Labor and the Director of National Intelligence. Now these are mostly appointed offices, meaning the President appoints those officers. Some of them require confirmation from the Senate before that can happen. But you could argue that this deck is kind of stacked in the favor of the executive branch because the President is the one who's appointing

all these individuals. Ford's Executive Order in nineteen added two new members to this committee, and that would be the United States Trade Representative and the Director of the Office of Science and Technology Policy. Plus both the nineteen fifty Act and the nineteen seventy Executive Order made allowances for the President to appoint any other heads of agencies or offices to the committee on a case by case basis.

The U s Secretary of the Treasury acts as chairperson for this committee, and the rules by which the Committee may review transactions gets fairly complex and they're often open to interpretation. Not all transactions fall under the purview of this group, as I mentioned, and moreover, deciding which proposed transactions could impact national security isn't really cut and dried either, So in some respects you could say that the Committee defines whether or not an individual case is a potential

national security matter, case by case. So it's frustrating because there's not like a clear and dry set of rules that you could look at and say, all right, well this falls outside of that, so everything's okay or no, that rule covers this particular case, so we've gotta adjust things. It's a little more free form than that. Back in when Ford really got the Committee into action, much of the needs that were under scrutiny fell into the energy sector.

The world was going through an oil crisis, more countries were industrializing, and their need for resources was on the rise. Industrialized countries got industrialized er, which isn't a word, but by that I mean they grew more complex and their need for energy resources was growing as well. Moreover, here in the US, we were depending heavily on oil from foreign countries. We weren't producing enough domestically to meet all our needs. So this was truly a matter of national security.

As the oil crisis taught us, is that if that supply gets cut off, then we find ourselves in trouble pretty quickly. So energy power and national security are very clearly tied together, pretty tightly. The tech sector, on the other hand, was generally ignored at this time. Now their

works options. There was the time where the US government accused a group of Japanese companies of colluding to sell electronics here in the US at below market prices, all in an effort to undermine the tech industry in the United States and to undermine American companies. And that was totally happening, and moreover, ultimately the US failed to really do anything about it, but tech companies largely fell outside the scope of this committee. However, tech has changed significantly

over the past forty years. Major tech companies are now global entities. The shift to cloud services means that data isn't just stored in one data center on domestic territory. You've got data centers around the world, and that's a necessary component if you want to provide a global service and you know, not have terrible latency when people are far from those domestic data centers. You've also got hardware and software interacting with one another. They're exchanging information, creating

new ways for data to power various services. But that also means that the data is passing through numerous hands. Data is powerful stuff. I mean, it's really the currency of the technological age. The more data you have at your disposal, the more influence you've got, and the more money you make, the more catastrophic an event you could cause,

either by accident or we're on purpose. By the twenty tens, we started seeing the aggressive startup company culture that dominates the tech world today, and founders would launch a company typically around you know, like an app of some sort, and then they would seek out investment. The ideas that we're really compelling would get a ton of money behind them.

For a lot of tech company founders, the goal was never necessarily to build a working, profitable app as a sustainable business, but rather to create an idea that is so interesting ing that some other more established entity, like an enormous company on the scale of Google, would sweep in and then purchase the whole ding ding during thing

for like a ridiculous amount of money. Then as a founder, you could either go buy an island somewhere, or better yet, you do the whole dance again, only with a new idea. But investment can come from places other than US based companies like Google. It can come from venture capital firms or interested companies that might have their roots in other nations. Some of those nations might not have the friendliest perspective regarding the United States, and that was starting to look

like a problem. I'll explain a little bit more after we take this short break. So there was a growing realization towards the end of the twenty tens that, you know, maybe data is impoor it. Well, I should say there was a growing realization within the US government. The tech world had long had a deep understanding about this. Google, Facebook, and other companies didn't become multibillion dollar global corporations by chance.

They did it by realizing how valuable data is, including but not limited to the personal data of their user basis you know, you and me. People and companies will pay for data, or for access to data, or for ways to leverage data, but governments tend to be a little more slow on the uptake, particularly when it comes

to technology. It's not uncommon for us in the United States to see governments only address issues revolving around tech after those issues have grown to become potential or actual threats. Even in an era of data breaches, security leaks, and predatory business practices, it takes a while for the government to come up with a response beyond pulling a tech leader into a special hearing in Congress and then, you know,

not really doing anything else about it. I mean, sometimes they might impose a fine on these companies, and sometimes that could be in the range of hundreds of millions of dollars, which, don't get me wrong, that's a lot of money. But the crazy thing is these companies deal in the billions of dollars, and so a hundred million dollars that's unimaginable to me. That's so much money, But it would just show up as a relatively minor blip

on some of these companies ledgers. Moreover, I would say that the guiding spirit of technological development in the Internet age has been one of optimism, perhaps even to the point of naivete. When you read up on how the architects of the Internet and the Web viewed their work. You tend to see ideas like how information wants to be free, and that the ability to exchange ideas freely

leads to better outcomes and better communication. The ideals are admirable, but because information has value, and because that means you can use information to create an advantage, either economically or strategically or in some other way, it just hasn't really panned out to be a data utopia. You probably you

probably have noticed this yourself. So while the design of the web and the Internet mostly orbited this general point of view that data should be able to move effortlessly across networks, that doesn't line up with how entities like governments tend to view information. To a government, information can be an asset, something that could give the respective country a leg up on other countries. Governments typically are not in favor of giving advantages. Certainly the US government is

not keen on that idea. So when you start viewing data as another national asset, it becomes imperative that you figure out ways to protect that asset. You don't want it to flow freely. And there's one major component I haven't really talked about yet when it comes to this whole situation, and that's the specific role of China, not just a foreign country in general, but China in particular.

Over the past decade, Chinese companies have become far more active in the tech space, making significant investments in numerous tech companies. This ranges from social media platforms to game companies, to communications companies and everything in between, and that has raised concerns in some other nations, particularly in the United States. A big reason for this is that China and the

US frequently find themselves on unfriendly terms. It's not quite a full on Cold War status like the United States had with a good old U. S. S R. But it's not buddy buddy. The US and China depend heavily on one another economically, and that makes things particularly tricky. At times. One country will attempt to put leverage on the other through various trade restrictions or sanctions or levies or whatever. We've seen that quite a few times over

the last couple of years. But there's a concern in the US that if China gets much more influential, it will become the leading world power and possibly extend its influence beyond its own borders and beyond economic influence. China's government is very different from the United States. The country has a lot of state backed companies, meaning the Chinese government will actively support certain companies and give them a huge boost in capability or limit any competition that they

might face from foreign competitors. By the way, there's a whole discussion we can have about how in the United States companies can sometimes get similar benefits, but that's a topic for another show. And a huge issue for the United States is that the Chinese government is effectively dominated by the Chinese Communist Party. This party is involved, sometimes at very intrinsic levels, in pretty much every aspect of

life in China, including business. The government requires companies operating in China to reserve a spot in their committees for representatives of the Communist Party. This pretty much fundamentally goes against the economic philosophy of the United States, which typically condemns the government getting involved in any sort of decision

making capacity for an individual company. Another big kicker is that back on June two thousand and seventeen, the Chinese government passed a law which the world at large generally refers to as China's National Intelligence Law. The law created obligations for Chinese companies and citizens and to certain foreign

individuals operating within China. As Murray Scott Tanner, writing for the website lawfare blog dot com puts it, the law quote repeatedly obliges individuals, organizations, and institutions to assist public security and state security officials in carrying out a wide array of intelligence work end quote. This blog, which I highly recommend, by the way, breaks this down into segments.

It explains that the law includes language giving Chinese intelligence agents the authority to go so far as to not just demand cooperation from companies and citizens, but even go to the limits of uh common deering the communications equipment, transportation, buildings, and other facilities of individuals as well as organizations and

government organs. Now Tanner points out that the vague language of the act means that Chinese officials can take a fairly broad approach to interpreting and executing upon it, which

was probably by design. An earlier draft of the law specifically mentioned enterprises and companies, but the government struck that language from the law before they passed it and made it more general, with words like organizations, which leaves room for interpretation as to whether the government would assume authority to compel a company to cooperate with intelligence demands. Could this mean that a company operating in China would be obligated to hand over data to the Chinese government if

intelligence agents demanded it. There are a lot of foreign companies that are operating in China, Google, Apple, Disney, A T and T, Blkan Sony. All of these have branches in China, which makes sense. The Chinese population represents an enormous market and expanding there is a no brainer from a revenue standpoint. At some point you're going to find it hard to continue to grow in a saturated market, So getting into a relatively new market is incredibly valuable.

It's like discovering a new continent and going on a land grab. Moreover, what about companies that aren't in China but end up being acquired by Chinese companies or investors. For example, the Chinese company ten Cent has spent billions of dollars investing in numerous video game developer and publisher

companies around the world. Tencent outright owns the company Riot Games, which produces the game League of Legends, Tencent has a four d percent share of Epic Games, which makes Fortnite, and not too long ago, Epic Games launched the Epic Games Store, a competitor to Valve's Steam platform. Tincent also owns five percent of Ubisoft, a company that has recently been in the news for some pretty awful stuff. I may have to do a full episode on that in

the future, though. I should point out that Tencent's stake in Ubisoft came with certain conditions, among them that Tensent wouldn't be allowed to purchase more ownership in the company or more voting rights in the company. But since Tencent is a Chinese company, does that mean that the obligations Tencent has to the Chinese government extend to the properties

that aren't actually in China. If an intelligence agent from the Chinese government went up to Tencent executives and said, hey, you have to hand over all the data you have on League of Legends players, would that mean that Riot Games would be forced to do that. That's a troubling question, and the US government felt that the country needed a new approach to protect itself. The Committee for Foreign Investment in the United States didn't really have resdiction over tech

company transactions. But this was a growing concern because of foreign investment in those companies and the world's growing reliance on tech companies in general, and so in ten, the government passed the Foreign Risk Review Modernization Act or FIRMA f i R r m A. This was, to use a video game term, a power up for the Committee, giving it more powers to investigate proposed tech company transactions

and potentially intervene in them. To quote a summary of the act quote the Foreign Investment Risk Review Modernization Act of eighteen FIRMA expands the jurisdiction of the Committee on Foreign Investment in the United States to address growing national security concerns over foreign exploitation of certain investment structures, which traditionally have fallen outside of c f i U S jurisdiction. Additionally, FIRMA modernizes cf I U S S processes to better

enable timely and effective reviews of covered transactions. End quote. And again, the term covered transactions referred to typically really big corporate moves like acquisitions and mergers, but firm expanded that to some other categories, such as the quote purchase, lease, or concession by or to a foreign person of real estate located in proximity to sensitive government facilities end quote.

So if you had a startup company, tech or otherwise, and it happened to be in an office campus that also included, say, government office with sensitive files, your business could potentially fall under this category, and any investment from a foreign individual or a company could come under its scrutiny, the idea being that maybe that investing party is really more interested in getting close to those sensitive files and doesn't really care about the company at all. It's more

about opportunity. Now. This also included any transaction that would allow foreigners access to quote non public technical information end quote, other than what is available to you know, any shareholder who holds stake in the business. It also expanded the parameters of the committee's powers to cover any change in a company's structure that would result in foreign control of a US business. FIRMA boosted the amount of time the

Committee has to investigate a proposed company transaction. Before FIRMA, the committee had a deadline of thirty days, but now it's forty five days, plus an option for a fifteen day extension and quote extraordinary circumstances end quote. Now I'm

not certain what merits qualification as an extraordinary circumstance. The Act doesn't really give any indication of what that means, and I suspect that circumstances can get really extraordinary pretty quickly due to allow pack of clarity around that isn't the law fun See this is why I love covering tech.

Tech typically either works or it doesn't work. If it works, you can get to the bottom of how and why it works, and if it doesn't work, you can look at it to see where the problem is, whether it's a faulty part or a faulty process, or maybe the whole technology is based on something fundamentally unsound from a

scientific perspective. Sarah nos. But law man, that stuff gets all lucy goosey, and the specifics will only play out after many years and typically many lawsuits to refine it so that we have a better understanding of the laws, scope and limitations. Now, when we come back, I'll talk a bit more about the process. C f i U S follows when it reviews these transactions, and will explore the TikTok story a little bit more in detail. First,

let's take another quick break. I think it's pretty safe to say that the major reason the U S Government passed FIRMA was China's growing involvement in the US economy and the tech sector in particular. Not that the laws only cover Chinese involvement, but I'm pretty certain that was the impetus to pass these laws. So what's the actual

process for the committee to get involved. Well, usually the parties that are interested in having one of these covered transactions will actually bring the case to see f I U S for review. The purpose of this is to identify any potential hurdles and address any concerns so that the transaction can go through. Otherwise, the parties might get deeply involved in a process that ultimately the US government stops somewhere down the line or reverses, and that can

mean billions of dollars lost in the process. So, rather than risk failure down the road, these companies will voluntarily bring their proposed transactions to the committee for consideration and best case scenario, the committee says, we have no response

to this, it's fine and everything can go through. But the committee has forty five days without that fifteen day extension that is to review the parameters of the deal, and the committee looks at a really long list of potential issues, including how much influence, if any, the foreign entity will have over the business, operations, and assets of

the US based company. In some cases, like an acquisition or merger, this could be pretty clear and the Committee could come to a decision fairly quickly, But in other cases, such as when Tencent took that five percent stake in Ubisoft, it could be a little more fuzzy. The Committee can still intervene if the investing entity isn't taking full control

of the U S company. If the Committee finds that the investor would have significant influence on a company or access to its assets, that could be enough for the Committee to step in and start making demands. So if the Committee chooses to act, or can do so in one of many ways. Now. In the most extreme cases, the Committee might simply prevent this transaction entirely, saying we're not going to allow it. But in other cases, the Committee could propose requirements that both parties have to agree

to before a transaction can take place. That can include things like making certain the foreign entity doesn't have decision making authority on the company or access to the company's assets, particularly it's data and in those cases the arrangement would be essentially purely financial. The foreign entity would benefit from the transaction economically, but not be able to actually control stuff.

In very rare cases, the committee can just send decisions all the way up to the President for considering sation, and that gives the President the potential to wield significant power when it comes to corporate transactions, something that makes some groups in the United States fairly uneasy. For example, in twenty eighteen, President Trump blocked a proposed acquisition in which a company called broad Calm would purchase the semiconductor

company qual Calm for one hundred seventeen billion dollars. Now this particular story gets confusing because if you look up broad Calm, you'll see it is apparently an American company, and you look up qual Calm, and that's an American company too. So if they're both domestic companies, why did c f I U S get involved? That's all about

foreign investment. Well, the whole story is complicated, But operations for broad Colm had moved to Singapore until two thousand seventeen, and that's when the company legally relocated the home address from Singapore to the US. Ironically, They did this specifically, or at least largely, to avoid c f i U

S issues because they would become a domestic company. However, ownership of the company is still rooted in Asia, so while the company has a US address, that apparently was not enough to satisfy c f i U S or Trump, and so the proposed acquisition got the acts. The Committee can also force companies to reverse transactions well after they've already happened. C f i U S ordered Chinese investors to divest from Patients Like Me, which was a healthcare startup.

The investors had already poured money into this startup venture, and the same thing would happen with Grinder dating app for the l g B t Q community. Chinese investors board money into that too. So both startups deal with a lot of very sensitive information healthcare information, location, data preferences, all this kind of stuff that is really important to individuals and could pose as a security threat in general. And the Committee deemed that this post as a potential

threat not just a personal security but national security. And you might wonder, how is that even possible. Well, if you're someone who works for the government and you're using one of these apps and your location is being tracked through that app, that could potentially be a threat to national security. So that was sort of the logistics behind it,

the reasoning behind it, And this brings us up to TikTok. Now, if you listen to my previous episode about TikTok, you know that one of the foundational components was an older service called musical dot Lee l Y. That is, Musical Lee launched in China and the United States and around the same time. But while it got a fairly enthusiastic reception in the US, it was largely ignored in China, and that convinced the team of Musical Lee to focus on the US market and it largely became essentially a

US company. Byte Dance, another Chinese company, had a competing service that was similar to Musical Lee, and that one was very strong in the Chinese market. So Bye Dance then acquired Musical Lee in two thousand seventeen for an undisclosed amount of money, but I'm sure it was a lot of it. TikTok would grow out of this acquisition.

The competing service that Byte Dance operates is actually still active in China, whereas TikTok is really not available in China, oddly enough, though perhaps maybe it's not that odd because access to TikTok would mean that Chinese citizens would get access to information that isn't state approved, and that's not

really the way that China operates in general. But TikTok started as a Chinese company no matter how you trace its origins, whether it's to Bite It's or to Musical Lee, and the popularity of the app has grown significantly over the last couple of years, becoming a true phenomenon, particularly among young people. Now, the fact that, like all social networks, TikTok relies on user data to support its revenue model, which again is centered around advertising, well that makes it

a concern for the US government. Military basis banned personnel from downloading the app. Uh It's not supposed to go on any government operated or owned phones, and the concern is that the app could siphon away critical information and send it on ultimately to a Chinese company. TikTok stated that all US data is actually stored in the US itself.

It does have a backup in Singapore, but according to TikTok, the US based operations anyway, none of this data is subject to the Chinese intelligence laws, but that hasn't really quelled the criticism or a concern about TikTok. Now the President assigned an executive order barring transactions with byte Dance, essentially telling US companies that they can't do any business with byte Dance and by extension, TikTok since TikTok is

owned by byte Dance. So that's why there's now pressure to remove TikTok from app stores like Apple or Google. And there's this discussion about the Committee stepping in to force byte Dance to divest itself of TikTok if the service is to operate in the United States. Thus the possibility of Microsoft coming in to purchase TikTok from byte Dance. Now there's still a lot of confusion around this situation.

If Microsoft were to only purchase TikTok servers that are operating in the United States, Canada, Australia, and New Zealand, these are all countries that are closely aligned with one another on matters of intelligence, how would that affect the overall service. Because TikTok operates around the world and servers are located in different countries. So would this acquisition split TikTok into two separate apps, one owned by Microsoft and one that's not Would those two apps interoperate at all?

It seems unlikely because the whole stated reason for going after TikTok in the first place is because the app could potentially be sending personal data about U. S citizens to a foreign countries government, So why would we allow it to interoperate with another service that could still be doing that. Now there have been a few other reports saying that Microsoft is considering a purchase of the global

operations of TikTok, a report that Microsoft has disputed. The value of the deal will fluctuate depending upon which version of the deal you're looking at, but generally speaking, the reports I've seen have valued it at between ten and thirty billion dollars. It boggles my mind, but Microsoft, a company that has not traditionally performed terribly well younger customers, apart from maybe the Xbox division, I suppose, may want to go after TikTok to help secure its future with

younger customers. Microsloft says, well, here's the way we get them. We buy something they really like. Already, we have to view this not just as an issue of national security, however, and we have to take into account the broader situation of global politics and trade agreements. One could look at the success of TikTok and see it as a point of power for a Chinese company and by extension, the

Chinese government. So resting control of that app, even if it's just part of an app from China, would end up being a political loss for China and a political win for Trump. So complicating matters is that TikTok users, most of them younger, have become extremely active over the last several months during the global response to the COVID pandemic. In other words, what else is there to do? You might as well make a whole bunch of videos. But

some that activity is political in nature. People have been using TikTok to kind of organize politically, and much of this action has been critical of the US President and the U s government's handling of the COVID nineteen crisis.

I totally get it. Anyway, it's hard to get away from the feeling that some of the US government's response to TikTok might be backlash against a user base that has been outspoken about perceived failures in the US government, whether it's from COVID or the Black Lives Matter movement or many other social issues. So some say that maybe this is a move to try and quite quiet a

voice that has been troublesome for the US government. Then we have the competing services that have started to spring up that are attempting to take advantage of this whole situation and to try and get some of the success that TikTok has enjoyed. The most famous of these, I think is Facebook introducing the feature called reels are e e l s on Instagram, And I don't think there's any way you could argue it wasn't inspired by TikTok. In fact, some people go so far as to say

it's essentially a copy of TikTok. So what options are open right now? Where are we going to go next? Well, TikTok could remain under Byte Dances ownership, and it could even shift all operations back over to China or to other countries, and it would be very hard for the United States to block Americans from using an app. I mean, apps tend to just be apps, right they They aren't

really you know, tied to a specific location. Generally speaking, now, presumably the US government could order internet service providers to block access to the app, to essentially say, don't allow packets to go from those servers to anyone in the United States. But as I am recording this, we don't even know if Google and Apple will actually remove TikTok from their online stores, and it seems likely that internet service providers would resist blocking off access to a specific

service because it sets a dangerous precedent. It would mean the US would ironically operate more like China does. China has the Great Firewall, a barrier that effectively blocks most Internet content from getting to Chinese citizens. Now, as for what I think about all of this, um well, I mean, honestly, I'm conflicted. On the one hand, I do have concern about how private data can be gathered and then weaponized,

but that concern stretches beyond China. I'm concerned with what Facebook does with our data, for example, or Twitter, or really any online platform we rely upon heavily. TikTok sticks out because of the possible connections to a foreign government that has a rather acrimonious relationship with the US government. China also has a terrible record with human rights violations, though let's be fair, the United States is no stranger to this either, so I think the TikTok case is

kind of emotionally charged. However, I don't think we should consider it an outlier. Instead, we should really hold all online services up to scrutiny and get our better understanding of how are these services using the information we provide to them. That includes services that might share information with our own government, not just foreign governments. Data really is power, and we have to be careful to whom we entrust that power. For the last couple of decades, we haven't

been careful at all. We have been freely giving away our location, our personal information, and giving links to other people in our lives. So there are entities out there that are gathering information about people who don't even you is the services because they're just kind of lumped in with the folks who are using them. So to me, that says we need to be careful across the board. TikTok is one example, but not the only one. Do I think it's a good idea to remove TikTok from

Chinese hands? Well, I mean, I guess that really depends on where it goes to and how the new owner will handle the service, and whether the outcome is actually better for users or not. I know that TikTok is incredibly popular and that users are probably not just going to jump from TikTok to a competing service like reels, despite what Facebook would really like to see. I think it's far more likely we would see users migrate to an entirely new service rather than one that tries to

replicate what TikTok was already doing. And I think we need to have some important conversations about stuff like what actually constitutes a threat to national stick curity, what does that really mean, what what is the real fear here? And what actions actually help improve things? How do how do we improve national security rather than just kind of

shift stuff around. I'm not entirely certain we're on the right track as it stands right now, but that's a conversation that is huge and honestly requires people far more steeped in and policy than I am. I only know that if we just reduce this too we don't want that data going to China, we risk missing an important component that has just as strong a role in our lives as national security and that I think would be

a huge mistake. I'm curious what you guys think and whether or not you have suggestions for future topics of tech stuff. Actually, if you don't have suggestions for future topics of tech stuff, you don't have to tell me that. That's fine. But if you do have suggestions, reach out to me. The Twitter address you should use to let me know what's going on is text stuff H s W and I'll talk to you again really soon. Text

Stuff is an i Heart Radio production. For more podcasts from my Heart Radio, visit the i Heart Radio app, Apple Podcasts, or wherever you listen to your favorite shows.