The Journal. - House Passes Bill to Ban TikTok

Episode Date: March 13, 2024

Today the House voted overwhelmingly to approve a bill that would ban TikTok from operating in the U.S. or force a sale. For years politicians have threatened a ban, but this latest attempt finally gained traction. WSJ's Georgia Wells on the long push to ban the Chinese-controlled platform and how the company is fighting back. Further Listening: -The Billionaire Keeping TikTok on Your Phone  -Exclusive: TikTok’s CEO on the App’s Future in the U.S.  -What's Up With All the TikTok Bans?  Further Reading: -How TikTok Was Blindsided by U.S. Bill That Could Ban It  -TikTok Crackdown Shifts Into Overdrive, With Sale or Shutdown on Table  -The Billionaire Keeping TikTok on Phones in the U.S.  Learn more about your ad choices. Visit megaphone.fm/adchoices

Today, the U.S. House of Representatives held a major vote. I rise today in support of H.R. 7521, the Protecting Americans from Foreign Adversary Controlled Applications Act. The bill would force TikTok's Chinese parent company to sell the platform or face a permanent ban? This is not an attempt to ban TikTok. It's an attempt to make TikTok better. Ban the foreign ownership and control of American data and stop apologizing for the Chinese communists.

The bill is passed and without the objection, the motion to reconsider is laid on the table. For years, politicians have threatened to ban TikTok, but each effort eventually died. This time, there appears to be more support than ever. This is the most bipartisan it's ever been. And it was 352 to 65. That's a blowout. Yeah, that's an overwhelming majority. Oh my goodness, they really got a majority in this vote. Like that was a very decisive victory for the folks who wanted to ban TikTok.

That's our colleague Georgia Wells. I feel like the journal doing episodes about banning TikTok is like the business podcast equivalent of the movie Groundhog Day. Welcome to my life. Yes, Welcome to my life. Yes, this 100% feels like 2020 all over again. Yes. Does that make you Bill Murray? Oh, you know, like, definitely I identify with Bill Murray in this moment. But I think a lot of people watching this want to know, like, is this time different?

And I think it is. Welcome to The Journal, our show about money, business, and power. I'm Ryan Knudsen. It's Wednesday, March 13th. Coming up on the show, Congress tries again to ban TikTok. Will they succeed this time? business is unique, so your business insurance should be too. Contact a licensed TD Insurance advisor to learn more. When did this idea to ban TikTok first emerge, and why hasn't it ever actually happened? Yeah, so in 2020, then-President Trump tried to ban TikTok using an executive order. We're looking at TikTok. We may be banning TikTok.

We may be doing some other things. There are a couple of options. And that attempt ended up failing in the courts. So last year, several lawmakers also introduced bills that would have effectively banned TikTok. None of those gained traction. They all seemed to kind of fizzle. And then also last year, the state of Montana tried to ban TikTok. In that case, TikTok basically won an injunction temporarily blocking the state law.

So basically, TikTok essentially won legally. And what is it that lawmakers are so concerned about when it comes to TikTok? So, lawmakers who have concerns about TikTok typically point to two main concerns. The first concern is that the Chinese government could lean on TikTok's parent company, ByteDance,

to hand over data about its U.S. users. And the other concern is that the Chinese government could lean on TikTok basically to serve propaganda to U.S. users. And that, you know, it would be very hard for TikTok to say no. You know, just for the record, TikTok has said that it has never received any requests like these from the Chinese government,

and they have said that they would never comply if asked. And from the point of view of company executives, it started to look like this was an issue they could put behind them. And so people at TikTok were feeling pretty smug that, you know, for now, any existential questions about their ability to remain in this country were kind of put to rest for now because the Biden administration had bigger fish to fry was sort of the argument inside TikTok. TikTok executives were encouraged by the fact that last month, the Biden campaign created its own TikTok account

and started posting videos. The first one landed on the day of the Super Bowl with the caption, LOL, hey guys. Chiefs or Niners? Two great quarterbacks, hard to decide. But if I didn't say I was for the Eagles and I'd be sleeping alone, my wife's a Philly girl. Game or commercials?

So internally, TikTok people were celebrating when they saw Biden join TikTok because that just didn't, you know, that didn't seem like the signal that a White House that was about to want to get on board with banning an app was going to send. And just two weeks ago, executives from TikTok's U.S. operation flew to the company's international headquarters in Singapore to give an upbeat report on the state of things. This delegation headed to Singapore to update them on the state of affairs for TikTok.

And our understanding is they really told these leaders that the political wins against TikTok had kind of settled at the moment, which kind of lines up with everything we've been hearing at the moment that folks inside TikTok were like, yeah, this is always an existential problem for us, but, like, for now, we're fine. They felt like the chapter was behind them. That's what they communicated to leadership. Then they returned to the U.S., and oh my goodness, like, TikTok was taken by surprise. Days later, members of the House of Representatives unveiled that bill.

They would ban TikTok from operating in the U.S. unless its parent company sold it. So where did this latest effort to ban TikTok come from? Who started it? Representative Mike Gallagher, he's a Republican from Wisconsin, and he heads this House committee that focuses on China. TikTok is a threat to our national security because it is owned by ByteDance, which does the bidding of the Chinese Communist Party.

Lots of lawmakers, including Mike Gallagher, have long kind of been concerned about TikTok and its ties to China through its parent company, ByteDance. For a while, lawmakers like Gallagher struggled to get people interested in the TikTok ban. But he got a lot more support after October 7th, when Hamas attacked Israel. Lawmakers on both sides of the aisle became very concerned about the content they were seeing about Israel on TikTok. There were concerns about anti-Semitism.

There were concerns around how Israel was portrayed in these videos. And this apparently galvanized a lot of lawmakers to want to ban TikTok. One reason many lawmakers were concerned is because of an analysis that had recently been published by a researcher. There's this data scientist and tech executive in Silicon Valley, Anthony Goldblum. He started analyzing data that TikTok publishes. To simplify what he did, he added up all the views that videos with pro-Palestinian hashtags had received and all the views that videos with pro-Israel hashtags had received, and he found it fluctuated, but that at times it ran as high as 69 views for videos with pro-Palestinian hashtags

to every one view of a video with a pro-Israel hashtag. So even though the research didn't necessarily demonstrate that TikTok had a pro-Palestinian and an anti-Israeli bias, lawmakers sort of interpreted it that way? Yeah. Yeah. Lawmakers interpreted the research to mean that TikTok has a pro-Palestinian agenda. And that helped galvanize lawmakers to want to take action.

Couldn't this also just be interpreted as, this is what TikTok users are interested in? I mean, the algorithm will feed people videos based on what they have demonstrated they're interested in. And if this is what people are interested in, that's what they'll see. Yeah, TikTok also has a quite young user base. I think there's more support for more pro-Palestinian causes among younger demographics in this country than older demographics.

What did TikTok say about this research? TikTok has said that its platform doesn't promote one side of an issue over the other. Gallagher worked with Democrats to write a bill that would succeed where other bills failed, to ban TikTok and keep it banned. Coming up, TikTok pushes back

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the platform sent a message to its users. It said, quote, Congress is planning a total ban of TikTok. Speak up now before your government strips 170 million Americans of their constitutional right to free expression. Underneath, there was a big red button that users could press to instantly call their representative and urge them to vote no.

Did TikTok users do that? Oh, TikTok users overwhelmed the phone lines of some of these representatives. Like, so much so that it actually ended up really pissing off some of the lawmakers. Why? Why were lawmakers so upset about getting these calls? So many lawmakers interpreted this

as basically a Chinese-owned app kind of compelling their users to overwhelm phone lines. Many lawmakers saw this as a really heavy-handed response from the company to try to manipulate the course of justice. Sort of like, TikTok is proving our point here.

You know, they will try to influence our governmental process here by telling users to call their representatives if there's legislation that TikTok doesn't like. Yeah, and not even that they will, but they have the ability to influence their users. There are some lawmakers where this really galvanized them to want to push even harder for a ban. And their rationale was, this proves our point, that TikTok can manipulate its users.

But haven't other apps done this? I feel like ride-hailing apps and food delivery apps send messages to their users when there's laws that are being proposed. But they're not owned by a Chinese company. being proposed. But they're not owned by a Chinese company. So like, I think often things that other companies might do are kind of scrutinized to an extra degree with TikTok because it's that they have a Chinese owner. Now that the bill's passed the House, the next hurdle will be getting through the Senate, where it could face more opposition. But that's a really big question mark right now about whether the Senate is going to, you know, will this reach a vote in the Senate? Will they vote in favor?

Why not? Why do we know about how senators feel about this legislation? Rand Paul has already said that he has concerns around free speech issues. And so, like, he likely has the ability to really kind of slow things down for this bill. This could very much peter out in the Senate if senators don't have as much overwhelming support for the bill. Is there anything else that TikTok has done or is considering doing to push back on this law? TikTok is considering rolling out these messages to more of their users. In TikTok's view, actually, the notifications have been going quite well. And TikTok really believes that they have a very, very large vocal user base who they want to come to their defense.

So we're likely to see more phone calls. And I wouldn't be surprised if we see TikTok mobilizing more of their influencers, similar to how we've seen previously. So in March of 2023, TikTok CEO was brought to a hearing. In that case, he brought a bunch of influencers with him to try to demonstrate to lawmakers how much many of their users care about the app, how many of their users make money on the app, how TikTok is important to the lives much many of their users care about the app, how many of their users make money on the app, how TikTok is like important to the lives of many of their users.

TikTok has given me and countless others like me the opportunity to showcase our talents and make a living doing what we love. A TikTok ban wouldn't just put my business at risk. 95% of my livelihood would disappear overnight. President Biden has said that he will sign the bill into law if it reaches his desk. What has former President Donald Trump said about this? The person who, in some ways, kicked off this whole effort to ban TikTok years ago. Trump has indicated he likely wouldn't be supportive of a ban this time around. He said it would only strengthen Facebook's hand. He had a description of Facebook

that was like enemy of the people or something like that. What would it mean for TikTok? What would happen to the company? Would it just disappear from the US? If this law passes, I mean, so in theory they could divest, but not only TikTok needs the Chinese government to sign off on many of these types of actions, and a lot of people

close to TikTok don't think the Chinese government would support the company having to sell TikTok to, say, an American company. So TikTok, their talking points have been around viewing this as an action that would have a predetermined outcome that would force them to just be banned from the U.S. Like if this bill succeeds, I think there's a very good chance TikTok would cease to exist in this country. If this is sort of the TikTok version of Groundhog Day, the actual Groundhog Day, how many more weeks of TikTok winter are we in for? I know. I wish I knew the answer to that question.

It's a really, like, the answer is just like really wide open right now. I think in a matter of weeks, we'll have a really good sense for whether this is going to sail through the Senate or whether this is going to get bogged down to some degree in the Senate. Previously, ban attempts, they typically fizzled over a matter of weeks and months rather than there being just kind of a moment where people were like, okay, never mind, it's done. And so I'm not sure we're going to have a very clear answer for weeks or months. That's all for today.

Wednesday, March 13th. The Journal is a co-production of Spotify and The Wall Street Journal. Additional reporting in this episode by Stu Wu, Raphael Huang, Natalie Andrews, and Christina Peterson. Thanks for listening. See you tomorrow.