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Trump's TikTok assault opens new front in tech war with China

Bloomberg News, Bloomberg News on

Published in Science & Technology News

By going after TikTok, the U.S. is expanding a fight against Beijing using Chinese-style restrictions on tech companies in a move that could potentially have enormous ramifications for the world's biggest economies.

The Trump administration's threat to ban ByteDance Ltd.'s viral teen phenom and other Chinese-owned apps could significantly hamper their access global user data, which is an immensely valuable resource in a modern internet economy. Any U.S. decision, which Secretary of State Michael Pompeo said would come "shortly," is likely to be followed by a similar pressure campaign that prompted some allies to ban Huawei Technologies Co. from 5G networks.

Even if TikTok's American operations are bought by Microsoft Corp., the episode is the culmination of a bifurcation of the internet that began when China walled off its own online sphere years ago, creating an alternate universe where Tencent Holdings Ltd. and Alibaba Group Holding Ltd. stood in for Facebook Inc. and Amazon.com Inc.

It is also splitting many in the industry: Some decry the betrayal of values like free speech and capitalism, while others advocate doing whatever it takes to subdue a geopolitical rival and its pivotal tech industry.

"This sets a dangerous precedent for the U.S.," said Samm Sacks, a fellow on cybersecurity policy and China digital economy at the New America think tank. "We are moving down a path of techno-nationalism."

Washington's moves underscore how quickly the concept of an internet decoupling is becoming a reality even as the world is still figuring out its consequences. India showed the way when it banned dozens of Chinese mobile apps including TikTok and Tencent's WeChat, while Australia and Japan are reportedly looking at similar options.

 

At issue is who controls the data --- everything from private details like locations and emails to sophisticated mined information such as personal profiles and online behavior. Like India, Washington worries that TikTok could be funneling that trove to Beijing, potentially undermining national security by building databases on its citizens.

Worryingly for Beijing, it's unclear where the U.S. would draw the line given the extent to which data is essential for companies these days. While Washington's curbs against Huawei may have some grounds in terms of national security, the argument for banning TikTok is "very weak," according to Yik Chan Chin, who researches global media and communications policy at the Xi'an Jiaotong-Liverpool University in Suzhou, a city near Shanghai.

"It's not a reasonable argument -- it's like a blanket ban on Chinese companies," she said. "How can Chinese companies ever do business in America?"

Careful What You Wish For

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