But now there are reports the president doesn’t actually support the deal. So what’s going on? To understand, you need to have some grasp of how the U.S. government thinks about national security and foreign-owned firms. This is a topic I research — and I recently completed a fellowship working with the Committee on Foreign Investment in the United States (CFIUS), which plays a key role in deciding whether a foreign investment poses a national security risk.
The U.S. government sees TikTok as a national security risk
Many commentators have argued that TikTok is just an app for silly pranks or dance moves, and that any U.S. government claims to national security concerns are thinly veiled protectionism — if not censorship. The U.S. government might or might not base some of its suspicions on classified intelligence. However, publicly available information suggests some of the likely rationale for the U.S. scrutiny.
First, there are data security and privacy concerns. Many apps collect vast amounts of user data, but TikTok is arguably more aggressive than most. We recently learned that TikTok had been unlawfully collecting the unique device identifiers of its users; a recent report by the Australian Strategic Policy Institute (ASPI) found that TikTok has more invasive permissions than similar apps, allowing the harvesting of users’ passwords and credit card information.
The U.S. government increasingly views wide-scale collection of sensitive data — particularly the kinds of locational data and data on children that TikTok gathers — as a potential national security risk. The fact that TikTok is a Chinese-owned firm also means that the Chinese government could use its 2017 national intelligence law to demand this data on some 100 million U.S. TikTok users.
Second, the U.S. government may be worried that TikTok’s algorithm — which decides who sees what videos — is a national security risk. The algorithm uses artificial intelligence (AI) technology and has been “trained” to fuel TikTok’s success by feeding the company troves of user data. If the algorithm has military applications (such as providing more powerful AI to use in weapon systems), the Chinese policy of “military-civil fusion” could potentially transfer this technology to its military. However, because the boundary between commercial and military use is blurry, there are real concerns among U.S. policymakers and the business community that measures to counteract military-civil fusion may also damage purely commercial enterprises.
A third point, also related to the algorithm, is that there are credible concerns that TikTok engages in global censorship, advancing the priorities of the Chinese government and stifling free speech. ASPI’s report on TikTok and WeChat uncovered extensive evidence that the platform engages in more aggressive forms of censorship — targeting pro-gay rights and anti-police brutality messages, for instance — and does so in a more global context than it has acknowledged publicly.
The U.S. has pushed back against TikTok in two ways
The U.S. government is using two separate legal channels to deal with TikTok, an approach that has led to confusion about how these government actions relate to each other.
The president’s Aug. 6 executive order blocked U.S. people and businesses from carrying out transactions with TikTok. This order used the president’s authority under the International Emergency Economic Powers Act (IEEPA). The administration claimed that it could do this because the threat from TikTok was a national security emergency.
This was surprising to many U.S.-China watchers, because it was well known at the time that the administration was already reviewing TikTok through CFIUS, which investigates the national security implications of foreign acquisitions of U.S. businesses and has blocked transactions in the past. The administration followed up with an Aug. 14 executive order that uses CFIUS to require the Chinese owner, ByteDance, to divest from TikTok within 90 days or cease operations. The two parallel processes seem duplicative and unnecessarily complicated, suggesting that there may be disagreement in the administration over how to deal with TikTok.
Since then, media observers and TikTok users have had to follow multiple plot turns as the U.S. government and TikTok have negotiated. Most likely, some of TikTok’s operations will be turned over to a new U.S.-based business. However, there is still dispute over who gets to control the algorithm and whether ByteDance’s founder will be allowed to retain a significant minority ownership stake.
The United States wants the algorithm sold to the new U.S. business that encompasses TikTok’s U.S. activities, but China has responded by imposing export controls that make the sale of the algorithm to a U.S. entity illegal. A further complication is the news that U.S.-based creators of content for TikTok are suing the U.S. government over the IEEPA-related ban, although ByteDance apparently will withdraw its similar lawsuit if the United States agrees to a restructuring deal.
What’s next? It’s hard to predict.
It is hard to know what TikTok’s future in the United States will be — a sale is supposed to happen by Nov. 12, although the executive order allows the deadline to be extended for 30 days. The actions stemming from the IEEPA order — such as Friday’s threat to pull the app from U.S. stores — might put more pressure on TikTok to sell before the deadline approaches. However, it also suggests that there is disagreement within the administration about the trade-offs between national security and an open economy.
Of course, if the U.S. government’s allegations are correct, ByteDance may not just be a company concerned with shareholder value, but also may be seeking to protect China’s national security — and this could further complicate any possible deal. We can expect many more such complicated situations as the U.S.-China relationship becomes more heated, and the relationships between national security and technological innovation become even more blurred.
Sarah Bauerle Danzman (@sarahbauerle) is assistant professor of international studies at the Hamilton Lugar School of Global and International Studies, Indiana University, Bloomington. She is the author of “Merging Interests” (Cambridge University Press, 2019).