Update: The TikTok Clusterfuck: Trump To Order A Block, Microsoft Wants To Buy, And Competition Is Still There

Overhype

from the say-what-now dept

Update: Sooo… we already have a bunch of updates on this story. Trump has said he’s banning TikTok entirely and is “against” allowing a US company to buy TikTok. Below is the original post, with only a slight clarification regarding Ben Thompson’s thoughts on TikTok, which I didn’t present very clearly in the original. Then, beneath the post I’ll have more thoughts on Trump’s comments.

There’s been a panic over the last few weeks about TikTok, the rapidly growing social network that is owned by the Chinese internet giant ByteDance (by way of history: ByteDance purchased a startup called Musical.ly in 2017, and rebranded it TikTok in 2018, and then it started growing like crazy). A few weeks ago, the Trump administration started suggesting it would ban TikTok, and a story was built up around the idea that TikTok was some sort of national security threat, despite very little evidence to support this. A separate narrative was simply that Trump was annoyed that TikTok kids made Trump look bad in Tulsa by reserving a bunch of tickets to his rally that they never intended to use.

Either way, it was announced today that the Trump administration was likely to order ByteDance to shed TikTok and immediately with that was the news that Microsoft was a likely buyer.

The whole thing is kind of silly. The most compelling argument I’ve seen for why the US should ban TikTok came from Ben Thompson at Stratechery, who more or less says (this is a very simplified version of his argument, so read the whole thing) that since China is engaged in a war to impose its ideology on the world, and that it will make use of TikTok and other services to effectively attack Western liberalism, it is effectively dangerous to allow it to operate in the west under Chinese ownership. He supports selling TikTok off to a American company, or barring that, banning the app in the West. I tend to lean the other way: to me, banning TikTok strikes me as effectively proving China’s views on liberalism, and allowing them to claim hypocrisy on the west, and use these actions to justify its own actions.

On top of that, if the concern is about China, then the fact that most of our network and computer equipment is built in China would seem like maybe a larger concern? But beyond a weird, similar freakout about Huawei, no one seems to be taking any serious interest in that. And that doesn’t get into the fact that US intelligence has leaned heavily on US internet companies to try to get access to global data — meaning that there does seem to be a bit of US exceptionalism built into all of this: it’s okay when we do it, but an affront if any other government might do the same thing…

Separately, this whole situation with TikTok and Microsoft demonstrates the pure silliness of the antitrust hearing in the House earlier this week. Note that there were claims that the four companies there represented “monopoly power.” And yet, just days later, we’re talking about how a recent entrant in the market, which has grown up quickly, and which Facebook certainly sees as a threat, is so powerful on the internet that it needs to be sold from its Chinese owners — and the leading candidate to purchase it, Microsoft, is not even one of the “too powerful” companies who were on the panel.

If a new entrant can rise up so quickly to be a “threat” and then needs to be purchased by another giant… it certainly suggests that the internet market still remains pretty vibrant, and not at all locked down by a few monopolies.

Updated thoughts: So that’s the original above. Now that Trump is saying he really is going to ban TikTok and is against its sale, there are multiple issues raised. Trump seems to think he can do this under his emergency economic powers (effectively declaring TikTok to be a national security issue — the same “tool” he used to impose tariffs on China without Congressional approval). If he goes that route, there will be lawsuits — and there will be significant Constitutional issues raised. The Supreme Court has in the past declared software speech, in Brown v. Entertainment Merchants Association (the case about whether or not the government could regulate video games and require age warnings). And, in the 2nd Circuit, a somewhat frustrating decision regarding the publishing of some code that would break DRM, Universal v. Corley, it is at least notable that the Court made a clear statement that software is protected under the 1st Amendment:

Communication does not lose constitutional protection as “speech” simply because it is expressed in the language of computer code. Mathematical formulae and musical scores are written in “code,” i.e., symbolic notations not comprehensible to the uninitiated, and yet both are covered by the First Amendment. If someone [*446] chose to write a novel entirely in computer object code by using strings of 1’s and 0’s for each letter of each word, the resulting work would be no different for constitutional purposes than if it had been written in English. The “object code” version would be incomprehensible to readers outside the programming community (and tedious to read even for most within the community), but it would be no more incomprehensible than a work written in Sanskrit for those unversed in that language. The undisputed evidence reveals that even pure object code can be, and often is, read and understood by experienced programmers. And source code (in any of its various levels of complexity) can be read by many more. Ultimately, however, the ease with which a work is comprehended is irrelevant to the constitutional inquiry. If computer code is distinguishable from conventional speech for First Amendment purposes, it is not because it is written in an obscure language.

And, later:

Computer programs are not exempted from the category of First Amendment speech simply because their instructions require use of a computer. A recipe is no less “speech” because it calls for the use of an oven, and a musical score is no less “speech” because it specifies performance on an electric guitar. Arguably distinguishing computer programs from conventional language instructions is the fact that programs are executable on a computer. But the fact that a program has the capacity to direct the functioning of a computer does not mean that it lacks the additional capacity to convey information, and it is the conveying of information that renders instructions “speech” for purposes of the First Amendment.

There were other issues with that case, but it remains law in the 2nd Circuit. TikTok suing over being banned would present an interesting 1st Amendment issue at the very least.

As to whether or not Trump could block the sale to a US company — ordinarily the answer to that should also be no, with a few caveats. However, as was recently revealed in Congress, the Bill Barr-lead DOJ appears to have no problem at all weaponizing its powers against companies the President is annoyed with — meaning that the DOJ could trump up some ridiculous excuse for why TikTok cannot be sold to an American company, and it’s possible a court would buy it.

On a related noted, it’s also entirely possible that the President would try to lean on both Apple and Google to remove TikTok from their app stores. And while I’d like to believe both companies would push back — the fact that there are realistically just those two bottlenecks to blocking TikTok entirely from the country, it could also get… interesting.

I get the feeling we’ll be writing about all of this for quite some time.

Filed Under: china, competition, donald trump, internet, ownership, trade war
Companies: microsoft, tiktok