TikTok has cemented its status as a regular part of Americans’ social media diets. It’s perhaps the only entity that’s been able to break through a space crowded by mammoth incumbents like Facebook and YouTube in recent years. But with astronomical growth comes commensurate scrutiny from regulators around the world, including the United States.
While U.S. bureaucrats and legislators have had their eye on TikTok, President Donald Trump himself has turned his own gaze to the app.
Last week, the Trump administration confirmed it was considering a ban of TikTok and said it would “take actions that preserve and protect [citizens’] information” from the Chinese government, according to Secretary of State Mike Pompeo.
“I don’t think there’s any self-imposed deadline for action, but I think we are looking at weeks, not months,” White House chief of staff Mark Meadows said Wednesday.
(TikTok says its parent company, ByteDance, is now headquartered in the Cayman Islands, not in China).
So, can the U.S. government actually ban TikTok? Experts told Adweek the answer is no, but the government does have ways it can make business much more difficult for the company.
Regulatory pressure mounts
In the past month, TikTok exited two foreign markets, one willingly and another unwillingly.
Amid escalating military tension with China, India banned TikTok and 58 other apps with ties to China on June 29, saying they “pose a threat to [the] sovereignty and integrity of India.” Days later, TikTok voluntarily withdrew from Hong Kong after officials there enacted a sweeping national security law that gives police authority to “take down internet posts” and punish internet companies’ employees if they don’t comply with data requests, The New York Times reported.
Tensions have also escalated in Australia, where politicians have called TikTok a national security threat.
In Washington, government scrutiny of TikTok reads like a laundry list.
Last year, the Federal Trade Commission fined TikTok $5.7 million for Children’s Online Privacy Protection Act violations by Musical.ly, the app ByteDance acquired and rebranded as TikTok, for collecting data from children under 13. And recent reports indicate the FTC is looking into whether TikTok violated its consent agreement.
In November, the Committee of Foreign Investment in the United States, a government body with the power to block or uncouple corporate mergers, announced an ongoing investigation into ByteDance’s 2017 $1 billion acquisition of Musical.ly.
And numerous government agencies, including State and Defense Departments, have barred employees from downloading the app on government phones. A Senate bill introduced by Sens. Josh Hawley, R-Mo., and Rick Scott, R-Fla., in March, would apply that same prohibition on all federal work devices.
In response to pressures in Washington, TikTok has bolstered its lobbying efforts, hiring 15 lobbyists since February and, during the first quarter of 2020, TikTok doubled its lobbying expenditures to $300,000, according to the Times.
While this sum pales in comparison to Facebook and Amazon, which each spent approximately $17 million in lobbying in 2019, it indicates that TikTok knows its biggest obstacle to success doesn’t lie in appealing to teenagers—it’s done that—but in convincing Washington it’s worthy of its trust.
What could the U.S. do?
There is no law that would allow Trump to completely ban TikTok, and it seems “unlikely that the government” would try to do so, said Kurt Opsahl, general counsel at Electronic Frontier Foundation. But regulators can force TikTok’s hand.
The app could face new scrutiny from CFIUS, which is reviewing the legality of ByteDance’s 2017 acquisition of Musical.ly. It also cannot ban TikTok, but the committee gained new authority in 2018 when Trump signed the Foreign Investment Risk Review Modernization Act, which let it review a wider swath of technology companies.
The committee would still need more than “suspicions” to take action against TikTok, said Michael Greenberger, professor at the University of Maryland Carey School of Law and director of the Center for Health and Homeland Security.
“If CFIUS [determines] that U.S. companies cannot enter into cooperative agreements of one kind or another with ByteDance or TikTok, that would be troublesome, but it’s not a full-fledged ban of the kind that we see in India,” Greenberger said.
CFIUS could order ByteDance to divest from TikTok, similar to its actions last year when it ordered the Chinese-based company Kunlun Tech to sell the popular gay dating app Grindr.
Brent Skorup, a senior research fellow at the Mercatus Center, a libertarian think tank based at George Mason University, said the government can also target government contractors that work with TikTok.
Apple and Google, which control app downloads on iPhone and Android devices, are both major U.S. government contractors. “If the White House can point to a national security or human rights threat from TikTok, the most direct way might be for the White House to prohibit government contracts to any company that hosts TikTok on its app store or transmits TikTok traffic,” Skorup told Adweek.
The Commerce Department also has broad authority to impose “export controls and other economic penalties” if they deem companies a national security risk, Skorup said.
This power lies in the Commerce Department’s Entity List, also known as Export Administration Regulations. American companies are discouraged from conducting transactions with companies on the list, while listed foreign companies must obtain licenses before selling goods.
While the U.S. government is suspicious of its data practices, Greenberger said, TikTok has not been charged with any crimes, and it would take more than “suspicions” of wrongdoing to place it on the Entity List.
In challenging placement on the Entity List, Greenberger said, the fact the company has an American CEO—former Disney executive Kevin Mayer, who started in June—would help TikTok’s legal case.
But the government’s response can be swift if companies are found to have committed wrongdoing.
Huawei and ZTE, large Chinese tech and telecom companies, are on the list, though both have faced criminal charges in the past (ZTE pleaded guilty in 2017 to shipping U.S.-origin items to Iran, and Huawei was charged in February with racketeering and conspiracy to steal trade secrets.) Separately, the Federal Communications Commission deemed the two companies a national security threat in June, barring them from using government subsidy money.
Are national security concerns legitimate?
Though all tech companies face pressure to give up their data, TikTok’s U.S. operations make it a particularly special case “given the app’s popularity, the America-China geopolitical rivalry and the ambitions, bellicosity and technological capabilities of the Chinese government,” Skorup said.
Some argue it’s not clear whether TikTok is a security threat because it’s not clear what TikTok does with its data. “If it’s passed on to China, there are a lot of national security concerns about having this information collectively available to the Chinese government. I think there are serious concerns here,” Greenberger said.
TikTok divulged last year in its second-ever transparency report that it received 500 requests for information from various governments during the second half of 2019, mostly from India and the U.S. (filling nearly 78% of requests). And TikTok said it received 45 requests to remove content from 10 countries (86.4% of accounts named in the requests were removed or restricted).
TikTok maintained at the time that it didn’t receive requests for information or content takedowns from the Chinese government. (ByteDance operates Douyin, a separate but similar app, in mainland China). However, The Guardian reported on leaked documents that TikTok’s content moderators censored content related to videos of the Tiananmen Square massacre, Tibetan independence and the religious group Falun Gong.
James Andrew Lewis, who directs the Technology Policy Program at the Center for International and Strategic Studies, a prominent foreign policy think tank, finds the outrage over TikTok exaggerated and considers the platform to have “no intelligence value.”
“I’m not saying not to be concerned about China,” Lewis said. “The Chinese have a massive espionage campaign against the U.S. I don’t think TikTok’s a part of that.”
In other words, “The Chinese would have to be really desperate if they used TikTok for spying,” he said, laughing.
Trump’s gripes with TikTok may be personal. In June, calls to “Save Barron” exploded on the app, with thousands of teens urging each other to rescue the president’s son. Just days later, hundreds of thousands of TikTok users reportedly registered to attend Trump’s campaign rally in Tulsa, Okla., possibly inflating campaign expectations for what turned out to be a half-full event.
Jeff Poston, a partner at the law firm Crowell & Moring, said Pompeo’s and Trump’s statements “came after the Tulsa rally where TikTok was used as a vehicle to garner support for essentially boycotting that rally” Poston said, adding that if it came to a court battle, “TikTok would raise the suspicious timing.”
The timing of Trump’s concerns “certainly seems relevant” for TikTok to claim the government is retaliating against protected speech on the platform, said Katie Fallow, a senior staff attorney at the Knight First Amendment Institute.
But it may not be that simple. “If the administration can come up with a facially legitimate non-speech-related rationale for its actions against TikTok, the courts may ultimately accept that and not see it as retaliation for speech,” Fallow said, noting that the Supreme Court upheld Trump’s Muslim travel ban despite First Amendment freedom of religion claims.
Trump’s motivations may be personal, but if his government zeroes in on issues of privacy and national security, he could certainly place obstacles in TikTok’s path to U.S. dominance.