China seems to be gearing up for a fight to preserve its effective control of TikTok. Yesterday a Chinese foreign ministry spokesman compared Congress to bandits.
At a news conference in Beijing on Thursday, Chinese foreign ministry spokesman Wang Wenbin said the vote on the bill “runs contrary to the principles of fair competition and justice”.
“When someone sees a good thing another person has and tries to take it for themselves, this is entirely the logic of a bandit,” Mr Wang added.
Another Chinese official, commerce ministry spokesperson He Yadong, said that China would “take all necessary measures to safeguard its legitimate rights and interests”.
Not exactly. Bandits may take something from you that they want, but they don’t usually negotiate a fair market price to pay you for what they’ve taken. The bill passing through congress would required Byte Dance to sell TikTok to a US owner. It would not require them to simply hand it over for free. Indeed, there are already people lining up to buy it if the bill passes.
Steven Mnuchin, an investment banker who served as treasury secretary under President Donald Trump, said he was getting a group of investors together to potentially buy TikTok, although he did not specify who. He also did not share a potential valuation for the app.
“I think the legislation should pass and I think it should be sold,” Mnuchin told CNBC’s “Squawk Box” on Thursday. “This needs to be controlled by U.S. business.”…
Bobby Kotick stepped down from his role at Activision Blizzard in December. Now, he is purportedly seeking partners to join him in a potential acquisition of TikTok, according to The Wall Street Journal, which cited unnamed sources. The publication reported that Kotick has expressed his interest in buying TikTok to ByteDance co-founder Zhang Yiming and OpenAI CEO Sam Altman.
Other parties including Kevin O’Leary from Shark Tank have expressed interest. So if the bill does pass, Byte Dance will not be robbed, it will be paid tens of billions of dollars for TikTok.
As for the logic of the bill, Axios points out that China only has itself to blame for US fears about China’s potential misuse of the site.
ByteDance, which is headquartered in Beijing, is beholden to a group of laws that could give the Chinese government access to sensitive TikTok user data, even if it’s stored elsewhere, Nazak Nikakhtar, a former Trump Commerce official and partner at Wiley Rein LLP, told Axios.
A 2017 national intelligence law requires individuals, organizations and institutions to assist China’s Public Security and State Security offices in their intelligence work.
A 2021 law also requires that businesses work with national security agencies to train staff to detect espionage and provide them with counter-espionage equipment.
Corporate cooperation with the Chinese government is not speculation, it’s settled law in China. Previous reports have indicated that China leans heavily on big tech companies to use their own resources to provide whatever data the government decides it needs from them. There is no recourse. No way to say no to these demands.
Even the NY Times tech reporter has changed his tune. In 2020, when President Trump first suggested similar action, Kevin Roose wrote an article against it. Four years later he has changed his tune and now says he supports the bill.
Over the past few weeks, as a bipartisan bill that would force ByteDance to sell TikTok hurtled toward passage in Congress, I’ve warmed up to the idea that banning TikTok, or forcing its sale, is probably a good idea…
TikTok has also made a series of unforced errors that have hurt its cause. And the company’s ham-handed response to the latest congressional bill — including encouraging users to flood their representatives’ offices with angry calls — may have inadvertently proved critics right, by showing that TikTok is both interested in and capable of using its muscle to influence American politics when it wants…
In 2022, for example, ByteDance employees were caught surveilling U.S. journalists who were reporting on TikTok, gathering data from the reporters’ TikTok apps in an attempt to identify who was leaking internal conversations and documents to them. Several ByteDance employees were fired after the incident came to light, and the company claimed it was a “misguided” effort, but for me the idea that this was an unauthorized operation carried out by a few rogue workers has never passed the smell test.
My colleagues Sapna Maheshwari and Ryan Mac reported last year that TikTok employees shared U.S. user data on a messaging system, known as Lark, that was also used by Chinese ByteDance employees, despite executives’ claims that TikTok didn’t share that data.
ByteDance has already been caught misusing the app and we probably don’t know the half of it. If the Senate slow walks this and kills the bill, there will be more and worse to come.
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