Aug 7, 2020

It’s official: TikTok’s days in the U.S. are numbered

HTML EMBED:
COPY
Late Thursday, President Trump signed an executive order, banning the social media app TikTok in 45 days.

Late Thursday, President Donald Trump signed an executive order, banning the social media app TikTok in 45 days. TikTok is owned by the Chinese company ByteDance and the administration says a Chinese company having access to Americans’ data is a national security threat. Trump also put a clock on WeChat, the popular Chinese texting app.

Microsoft is in talks to buy the parts of TikTok that operate in the U.S., Canada, Australia and New Zealand, but what that deal would look like? Who knows? It is a good topic for “Quality Assurance,” where we take a second look at a big tech story. 

Shira Ovide covers technology at The New York Times, and she says this could have implications far beyond social media. We spoke earlier Thursday, before Trump issued the executive orders. The following is an edited transcript of our conversation.

Headshot of New York Times's technology reporter, Shira Ovide.
Shira Ovide (Photo courtesy Ovide)

Shira Ovide: I think this is definitely a cloud over any Chinese company that operates in the United States. There are also Chinese companies that have large technology footprints in the United States, [like] Lenovo, which is the company that makes laptops. They own Motorola, the cellphone manufacturer. If I were a Lenovo, I’d be wondering what’s happening as well.

Kimberly Adams: Secretary of State Mike Pompeo said this week he wants to get rid of more “untrusted” Chinese-owned technology from app stores, cloud services, mobile networks and undersea internet cables, implying that TikTok is just the beginning. How many of those things are there?

Ovide: I’ve read Mike Pompeo’s statement about clean networks and so on. I’m not sure I totally understand the implications. You’re right, it definitely could be read as any Chinese apps that operate in the United States may no longer be able to do so.

Adams: It’s fascinating that somebody who knows as much about this stuff as you do, that you’re kind of lost with this.

Ovide: Yeah, I mean, look, it’s telling that I said I don’t know what’s going to happen, because a lot of this stuff is completely uncharted territory for technology companies. It also reflects the fact that U.S. officials, they say things but don’t necessarily follow through. So if somebody says, we’re going to ban an app, it’s not always clear exactly what happens next.

Adams: Some analysts like to write about how the world is starting to be divided into three internet regimes: the U.S. and then Europe and then China, with each area having its own sort of rules of the road when it comes to the internet. Does this fight/acquisition kind of make that more severe?

Ovide: China has forever been basically a parallel internet universe. The thing I wonder is maybe the internet is not so different. We have different tax regimes and tax schemes in every country in the world, that [technology companies] know they’re going to pay different taxes and abide by different tax laws in Germany than they do in the United States than they do in Mexico. So, the question is, is the internet something special, or is the internet like taxes, where each country sets its own rules and multinational companies just figure out how to make it work? 

Adams: TikTok’s algorithm, how valuable is it, even if it wasn’t being used by a social media company?

Ovide: The thing with algorithms is that you never really can tell how good they are because by definition, algorithms are this secret computer formula that no one outside the company can really peer into. From the outside, looking at how TikTok serves up entertaining videos without us having to do anything, it seems like that is really magical and valuable. But we don’t really know because again, it’s inherently secret and maybe it’s not as good as we think it is or maybe it’s not as hard to replicate as we think. It’s hard to tell, but at least from what those of us on the outside can see, it certainly seems like that algorithm is instrumental to what makes TikTok fun.

Adams: But that gets back to the point of how do you divvy up TikTok? They’re not going to take the algorithm away from China. 

Ovide: No, I don’t think there’s any way to kind of separate that algorithm out of China or out of ByteDance. I think one of the big question marks about what Microsoft is trying to negotiate with TikTok now is, can Microsoft absorb certain elements of that algorithm or not? And if not, then what is TikTok, really? Is it just this husk of an app if it doesn’t have the secret sauce of software that becomes attuned to our interests?

Adams: It’s one thing to absorb the user base and the app infrastructure, but without the algorithm, is it worthless?

Ovide: It is, and I think it’s a question for all apps, really. What are they? Look, there’s nothing supermagical about Facebook. The value of Facebook is all of the billions of people who are on Facebook and the connections that we make there. So if you were, this is not possible, but if you were to sell Facebook to a different company, and that company had to destroy all of the social networks, the social ties that we’ve made inside of Facebook, then is Facebook really valuable? I think probably not.

Related links: More insight from Kimberly Adams

Speaking of the Trump administration and social media, Twitter and Facebook both blocked a video shared by the Trump campaign that included misinformation about COVID-19.

TikTok is trying to make global regulators feel better about its data management. TechCrunch has a story about TikTok launching its first European data center. But even under duress, you can’t stop the dancing and cute animal videos from taking over. Business Insider is reporting that TikTok is launching its first TV app. It’s a view-only channel for Amazon Fire devices, so you can get caught up in endless versions of the Renegade dance without even having an account.

Listening makes you smarter…
donating makes it all possible.

Our mission is to raise the economic intelligence of the country, exploring the intersection of the economy, tech, and our daily lives. As a nonprofit news organization, we count on your support – now more than ever before.

Secure the future of public service journalism today when you become a Marketplace Investor.

The team

Molly Wood Host
Michael Lipkin Senior Producer
Stephanie Hughes Producer
Jesus Alvarado Assistant Producer

There’s a LOT to celebrate!

It’s National Pumpkin Spice Day, the last day of our fall fundraiser, and thousands of fans like you have invested in Marketplace.

You inspire us, and your support makes us stronger, especially now.