The Journal. - Wait… Was That The TikTok Ban?

Episode Date: January 21, 2025

President Trump tried to ban TikTok during his first term, but now he’s being hailed as the app’s savior. WSJ’s Georgia Wells explains the saga to make a deal with the Chinese-owned social media app.  Further Reading: -TikTok Restoring Service for U.S. Users, After Trump Signals He Will Save It  -What Happens Now That TikTok’s Gone Dark?  Further Listening: -The TikTok Ban Goes to the Supreme Court  -Readers Can’t Get Enough of BookTok. Publishers Are Cashing In.  Learn more about your ad choices. Visit megaphone.fm/adchoices

On Monday, just hours after he was sworn into office, President Donald Trump signed a stack of executive orders. One of them? Delayed enforcement of a ban on TikTok in the U.S. The president signed an executive order to delay the ban on TikTok for 75 days in hopes of giving the app's Chinese owner enough time to sell off its U.S. assets. Wasn't it President Trump who, back in 2020, was the person who sort of kicked off this whole effort to ban TikTok in the first place?

Yes, the very same President Trump. Our colleague Georgia Wells reports on TikTok. This has been utter whiplash. That Trump, in his first term, the president who tried to ban or take away TikTok in this country, is now the person who's spearheading an attempt to bring it back, so much so that in the push alert to users, TikTok thanks President Trump for his work on this. So TikTok is still functioning. It's thanking President Trump. But is the story really over? Is it really actually saved now? So this is a company that has been facing the prospect of a ban for years and seems

to have potentially shifted the tide on this ban attempt, but it's not done. We are very much still in a wait and see. TikTok still has this law hanging over its head. It has a brief reprieve, but this is not done for TikTok. Welcome to The Journal, our show about money, business, and power. I'm Ryan Knudson. It's Tuesday, January 21st.

Coming up on the show, the TikTok ban that wasn't? Air Transat presents two friends traveling in Europe for the first time and feeling some pretty big emotions. This coffee is so good! How do they make it so rich and tasty? Those paintings we saw today weren't prints. They were the actual paintings. I have never seen tomatoes like this.

How are they so red? With flight deals starting at just $589, it's time for you to see what Europe has to offer. Don't worry, you can handle it. Visit airtransat.com for details, conditions apply. Air Transat. Travel moves us. All right, let's go back in time for a second. Why did Donald Trump want to ban TikTok in the first place when he first brought this up back in 2020?

Trump was never that explicit publicly with what his rationale was, but people who worked with Trump on this ban said that their concerns came down to two. There was this concern that the Chinese government could lean on TikTok's parent company for US user data. And so, for example, you could see the Chinese government having a list of people's interests or their contact list or who they interact with on TikTok. The other concern is propaganda. So US officials have been concerned that the Chinese government could lean on bite dance

to put their thumb on the scale for the content that served to US users. So you could imagine content that kind of encourages the divisions of US voters ahead of a pivotal election or something like that. Basically that the Chinese government could use the TikTok algorithm to push content that's more favorable to China or its worldviews. Yeah, that too. TikTok's parent company By Dance has said it would not comply with such requests from the Chinese government and that it protects user data. It's a little bit of a tricky stance for a Chinese company or a company owned by a Chinese company to take, though, because when the Chinese government asks companies for something the Chinese government tends

to get what it wants. After calling out TikTok, Trump tried to use his presidential powers during his first term to bring the app under US control. So he issued these executive orders about attempting to ban TikTok and Trump also tried to orchestrate a US deal to buy TikTok. His legal efforts just didn't stand up in court. And then any potential deals were thwarted by the Chinese government. In an effort to head off concerns, TikTok implemented a plan known as Project Texas.

The idea was that US user data will be walled off by TikTok and stored on servers in the US owned by Oracle, a US tech company. And did Project Texas work in the way that it was envisioned? So the algorithm that fuels TikTok is largely based or largely worked on and created in China. And so a certain amount of data continued to flow back to China in order to kind of provide some level of feedback for this algorithm. And since then it came out that these issues were one of the factors that kind of were weighing on U.S. officials who were considering this proposal at the time, as will Project

Texas kind of satisfy our concerns. And for many of those officials, the answer was no. And then when Hamas launched a surprise attack on Israel in October of 2023, the pressure on TikTok picked up again. It suddenly mobilizes a chunk of US lawmakers who, while China national security concerns weren't necessarily top of mind, the US relationship with Israel was top of mind for many of them.

And the reason this came up was because on the TikTok app, there were more pro-Palestinian videos than pro-Israel videos on the app. And many of the pro-Palestinian videos went quite viral. Is that a proven fact? Or was that just a feeling that some lawmakers had that there were more pro-Palestinian views on the platform? There were analyses that third party data scientists did that showed the views that these pro-Palestinian videos were getting.

We're receiving far, far more views than the views that the pro-Israel videos were getting. There's no evidence that TikTok was putting their thumb on the scale to influence in any way the like ratio of pro-Palestinian versus pro-Israel content on the app. But this nonetheless kind of activated a certain group of lawmakers in the US who hadn't really paid much attention to TikTok before. So after this moment, Republican Mike Gallagher and others in Congress really pushed through this law around forcing a divestiture of TikTok or a ban.

So a divestiture would mean that bike dance would need to sell TikTok, or TikTok could not continue to operate. That bill, which had overwhelming bipartisan support, sailed through Congress and was signed by then-President Biden last April. It gave ByteDance a deadline for divestiture, January 19, 2025. Meanwhile, Trump started signaling that he had changed his mind about TikTok. He warned that banning it would only serve to help Metta, a company Trump had been critical

of after it kicked him off Facebook. And that timing was soon after he had met with Jeff Yaz of Susquehanna. Susquehanna is a major investor in fight dance, TikTok's owner. So we don't know exactly what occurred in that meeting, but he left that meeting with this person who has a lot of money riding in fight dance and then says, we don't want TikTok going away. Trump also joined TikTok this summer, and he has said it helped him win support among young voters. Regardless, the options for TikTok were dwindling. The Chinese government kept signaling that any deal was off the table.

TikTok and a group of creators challenged the law on First Amendment grounds, but the Supreme Court ruled on Friday that the ban could go ahead. And then a twist. As Biden's presidency wound down, officials signaled that they didn't intend to enforce a ban. They said that it would be up to the Trump White House to implement the legislation. And Trump said he'd like to give the company more time to find a solution that would keep TikTok in the U.S.

It was sort of like a game of chicken almost, where it seemed like the U.S. government wanted to put maximum pressure out to try to get a deal done. Here comes the deadline, the deal's not done yet, and all the politicians are kind of like, uh... Right, when it takes time for someone to own this bipartisan law, no one's wanting to own it. ["Saturday Night Live"] But on Saturday, a day before the January 19th deadline, TikTok shut down anyway.

When TikTok users opened the app on Saturday afternoon, they got a message that said TikTok was no longer available. In a quote, we are fortunate that President Trump has indicated that he will work with us on a solution to reinstate TikTok once he takes office. Please stay tuned. If it seemed like the Biden administration was saying that they weren't gonna enforce it,

Trump was sending very strong signals that he also wanted to try to figure out a way to save the app. Why did TikTok go dark then over the weekend, temporarily? So the law still remains on the books. And if you kind of try and get into the head of the general counsels at Oracle or at Apple or at Google, per the letter of the law, they could face fines of up to $5,000 a user a day for not being in compliance with this law. And so even though the Biden administration has said they're not going to enforce it and Trump is sending all these signals, the app still goes dark

because that's just like, that's a level of legal liability that the companies don't want to face. Like, that's a level of legal liability that the companies don't want to face. But then, on Sunday, about 14 hours after it went away, TikTok was back. That's next. Calling all sellers, Salesforce is hiring account executives to join us on the cutting edge of technology. Here, innovation isn't a buzzword. It's a way of life. You'll be solving customer challenges faster with agents, winning with purpose, and showing the world what AI was meant to be.

Let's create the agent first future together. Head to salesforce.com slash careers to learn more. When TikTok came back online on Sunday, TikTok users rejoiced. TikTok is back baby! Oh my goodness! This is so cool! I feel so grateful. I love you all so much. And I'm just excited to be posting again on TikTok.

The Dooms girl tonight will be legendary. I'm looking at 3 to 4 hours. I don't want to go too crazy. Now, when users opened the app, they were greeted with a new message with another nod to Trump.

It said, quote, as a result of President Trump's efforts, TikTok is back in the U.S. So we see TikTok like attempting to kind of hand Trump a political win in this moment in time. And it's unclear whether Trump's efforts right now will ultimately save TikTok in this country. But nonetheless, we see TikTok kind of casting him as this hero to their users. But the drama still isn't over. Trump's executive order just gave the company more time to strike a deal, and it's still not available for download in the app stores.

So the executive order Trump signed kind of gives TikTok an additional 75 days before the enforcement of a ban. But legal experts say it's sort of unclear whether an executive order can like actually override this law. Yeah, I mean, I'm honestly very confused about this. I mean, Congress overwhelmingly passes a law. It's challenged at the Supreme Court and the Supreme Court upholds it. How can then one person, the President of the United States, just sort of say, yeah, I know that two other branches of government have said this needs to happen, but I'm going to try to make it not?

That's the big question. Legal experts right now who I've spoken with are scratching their heads. So we're going to have to see how this plays out. Trump has said he wants TikTok to be owned 50-50 between US and Chinese companies. I think the US should be entitled to get half of TikTok. And congratulations, TikTok has a good partner. And that would be worth, you know, it could be $500 billion or something. It's crazy.

The numbers are crazy, but it's worthless if I don't't if the president doesn't sign, then it's worthless. is kind of interesting because ByteDance is already 60% owned by global institutional investors like BlackRock and General Antic and Susquehanna. So the 50-50 split for TikTok does not seem that hard. Last week, the Chinese Foreign Ministry said that any deal should, quote, be decided by the companies on their own, indicating that the Chinese government might now be more open to a deal than it was in the past. So where? Where? What's going to happen? Like, TikTok more than any company I've ever covered.

TikTok is the company where like, if I could look into a crystal ball and see what's going to happen, I'm like very impatient and very curious because I just keep on getting whiplash. Like it's going to get banned. It's not going to get banned. Trump wants it banned. Now he doesn't want it banned. Like, I don't know. And right now it looks like it's going to be saved. But like a deal of some sort still does need to happen. The can has just been very firmly kicked down the road, but it's still been kicked. It looks like we've got the political momentum

to achieve some sort of deal. This law is not going away. And so how are they going to satisfy this law and how is TikTok going to kind of work itself out of this one? What do you think that this whole saga says about how important TikTok has become and also what the relationship is like at this moment between the US and China?

I mean, TikTok has been just like a fascinating way to view the US-China's relationship over the years. Like, there's never been a company that's been more kind of successful, at least on like a consumer tech level, that's been caught in the cross stairs between these two countries. And like, it seems like we're at this moment in time, like you're saying, where TikTok has become too beloved by too many American teenagers and older people too, for it just to disappear.

That's all for today. Tuesday, January 21st. The Journal is a co-production of Spotify and The Wall Street Journal. Additional reporting in this episode by Elizabeth Woolman. Thanks for listening. See you tomorrow.