Don't Stop with TikTok

By Ed D'Agostino | March 19, 2024

There’s a good chance China is tracking nearly half of all Americans.

Last week, the House passed a bill that would require ByteDance, the Chinese company that owns TikTok, to sell within six months or face a ban. Now the bill faces an uphill battle in the Senate.

From where I sit, Congress isn’t going far enough. The US should compel ByteDance to sell immediately or lose access to the US market. Why give our adversary half a year—half an election year—to ramp up misinformation and data gathering?

Simply put, TikTok is a tool for China to manipulate US public opinion. When you download the app on your phone, you give TikTok full access to your contact list and audio/video files, permission to read and write to your phone’s storage and install shortcuts, and so on.

You also give TikTok permission to access detailed information about your location via GPS and other apps running on your phone. Why is that necessary for posting short videos?

It’s not. And it means China can track the activity of 150 million Americans with the app. That is almost half the US population.

Anyone who believes China wouldn’t take advantage of all that data should consider that we recently found suspicious cellular modems that could potentially be used for espionage on Chinese-made cranes in US ports. Why wouldn’t China tap into our phones, too?

China plays by a different set of rules. This is hard for many Americans to grasp. But the CCP can force any business or person in China to hand over “private” information. That’s why Goldman Sachs walls off sensitive information from the top executive at its Chinese subsidiary—even sophisticated bankers with armies of lawyers are vulnerable to demands from the CCP.

TikTok Isn’t Driven by Profit

Some have argued that a forced sale or ban would trigger an in-kind response from China. That would be difficult since China already prohibits major US social media platforms like Facebook, Instagram, Twitter, YouTube, and even LinkedIn. China has either banned these platforms outright or made it so difficult for them to operate that it’s not worth the trouble.

China doesn’t even have TikTok!

Instead, ByteDance offers a separate app in China called Douyin, which predates TikTok. They’re both short-form video platforms but with key differences, including aggressive political censorship and usage restrictions for children on Douyin.

Douyin also ties into China’s massive e-commerce ecosystem. This is one reason it’s amazingly profitable, as you’d expect. TikTok is not. If it can’t turn a profit with 150 million US users, perhaps profit is not the motivation.

Other opponents of the TikTok ban say it’s a First Amendment issue. My new friend Chris Fenton addressed this in an op-ed piece for Real Clear Politics:

And before those opposing such a ban even try to invoke the “Freedom of Speech/First Amendment” argument, there is a simple and effective counter. In the United States, the Federal Communications Commission prohibits control of American broadcast networks by hostile foreign governments and entities beholden to them.

Others have argued that singling out TikTok is unfair. I agree! Let’s ban all Chinese apps since the CCP can use them all to monitor and influence Americans. We need specific rules to guard against that before any foreign app is allowed access to US markets.

If Congress has the political will to push high-paid lobbyists aside and act decisively to defend our nation, China will likely retaliate. This is yet another reason why I personally find China uninvestable.

If ByteDance isn’t in it for the money, what’s the point? There’s a reason the federal government and 39 states already ban TikTok on official devices.

Reasonable people whose opinions I respect disagree. This includes some high-profile investors who are speaking at our upcoming Strategic Investment Conference. You should hear both sides of this argument. Be sure to register for the SIC by going here. We’ve got a great line up for you this year.

Best regards,

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