The battle over TikTok’s future, explained

At the end of the day, Xi doesn’t care much about “decadent” consumer apps such as TikTok. He’d rather worry about the commanding heights of tech and economic competition.

5 mins read
[ Illustration Courtesy: The Times.co.uk ]

Last Wednesday, as part of the sweeping foreign-aid package that included much-needed funding for Ukraine’s defense, President Joe Biden signed into law a bill requiring that TikTok’s Chinese owner, ByteDance, sell the popular video-sharing app to an American buyer within a year or face a ban in the United States.

As I wrote a little over a year ago, I think this is a close call but the right move. TikTok is ultimately beholden to the Chinese government, an authoritarian state-capitalist regime locked in an increasingly adversarial strategic competition with the US. As intelligence agencies have warned, the platform poses a national security vulnerability because Beijing can commandeer it to surveil and manipulate Americans. No remedies or assurances to the contrary can mitigate that risk short of a Chinese divestment or an outright ban.

Most importantly, the Chinese Communist Party already bans all US social media apps under the guise of national security. TikTok itself is banned in China, where ByteDance is only allowed to operate a heavily censored version for domestic users. In my ideal world, this would be an area for US-China competition rather than confrontation. Alas, the CCP isn’t taking down its so-called Great Firewall anytime soon, so I see the US divestment/ban order as a fair and reciprocal response that will protect not only US national security but also American social media companies from their most formidable competitor.

Why now?

TikTok has long drawn political condemnation from both sides of the aisle, especially in the fractious House, where hostility to China is the only reliable area of bipartisan agreement. And yet, over the past three years, the viral Chinese social media platform survived effort after effort to bring it to heel, including a forced divestiture order in 2020 under then-President Donald Trump, a near-pass RESTRICT Act, and a struck-down ban in Montana. Through it all, its reach has continued to grow unabated.

But TikTok’s luck has just about run out. And as strange as it may sound, it had little to do with a change in the US-China relationship and everything to do with … the Gaza war.

Since Oct. 7, many Americans’ TikTok feeds have become awash in anti-Israeli and, in a lot of cases, antisemitic content. This isn’t entirely surprising – after all, by virtue of their demographics (young, non-Western, Muslim), TikTok creators and users are far more likely to hold pro-Palestinian, anti-Israeli, and antisemitic views than their Instagram or X counterparts. But beyond this organic bias, there’s also reasonably suggestive evidence that TikTok’s algorithm and moderation rules have artificially suppressed pro-Israeli content and amplified pro-Palestinian and antisemitic sentiment. This is consistent with other studies that show ByteDance shapes the feed’s content in accordance with the Chinese Communist Party’s policy goals.

After trying and failing to convince TikTok CEO Shou Chew to change course, a small but motivated group of wealthy and politically connected Jewish and Israeli Americans bootstrapped a PR and lobbying campaign that ultimately managed to achieve what years of anti-China efforts couldn’t.

Congress was already primed to do something/anything on antisemitism and show support for Israel; beating up on Beijing just was the cherry on top. House Speaker Mike Johnson figured he could use the TikTok divestment provision as a sweetener to get the foreign assistance package over the line with his members, knowing the prospect of finally passing Ukraine, Israel, and Taiwan aid would be enough to overcome tepid Senate opposition to the TikTok bill. (Maybe he’s effective at his job, after all?) A ban would also meet no resistance from the White House given the Biden administration’s approach to tech and investment restrictions on China, especially in an election year. It was the perfect storm for TikTok.

What’s next?

Worry not: You can keep doomscrolling on TikTok at least through Inauguration Day. The law gives ByteDance until January 19, 2025, to sell the app and allows the president to grant a one-time 90-day extension into April. In the meantime, TikTok will likely challenge the legislation in court on First Amendment grounds, which – though unlikely to succeed – will extend the timeline and almost certainly push any decision into the next presidential administration.

Ironically, TikTok’s best hope lies with Trump retaking the White House in November. Ironically, I say, because Trump was the one who first tried to ban TikTok in 2020 through an executive order that was blocked by the courts … before flip-flopping earlier this year and becoming a vocal opponent of the policy on the back of a sizable campaign contribution by major Republican donor and TikTok investor Jeff Yass. It’s not a stretch to imagine that Trump would use the threat of a divestiture order/ban as a bargaining chip in negotiations with China on other issues closer to his heart and less damaging to his wallet, eventually agreeing not to enforce it in return for concessions in areas such as trade.

Should Biden win reelection and TikTok’s legal challenges fail, it will be up to the Chinese government to decide whether to allow ByteDance to divest. As of now, Beijing’s official position is that it will prohibit the export of TikTok’s AI-powered recommendation algorithm – the platform’s core asset – to a US buyer (without which the app is practically worthless). But the issue is still being quietly debated within the Chinese system, suggesting the only decision maker who really matters, President Xi Jinping, is yet to make a final call – and may not until and unless a sale is actually forced.

Of course, even if Beijing were to sign off on a spinoff, it takes two to tango. There’s only a handful of potential American buyers who could afford the price tag of TikTok’s US business. Former US Treasury Secretary Steve Mnuchin had reportedly made a bid to purchase the app with a group of investors back in March, but it remains to be seen whether he’d cough up the cash when the rubber meets the road. The most obvious candidates to snap up the company would be publicly traded tech giants that would come under immediate regulatory scrutiny over antitrust issues.

If there was no viable buyer or if China’s government refused to allow the sale, the divestiture order would effectively become a ban. In this scenario, TikTok would eventually be kicked off the US market, forcing the app’s 170 million American users to Google “how to download free VPN.” Overnight, cryptocurrency pump-and-dump schemes would lose their oomph. Real estate influencers would have to move back to their parents’ basements. Kids might have to learn to talk to each other. Chaos would no doubt ensue.

Somewhat more seriously, a ban would put a strain on an already tense US-China relationship. At the same time, given all the efforts to stabilize ties since Woodside, Beijing’s response would focus more on insulating the Chinese economy from further US tech containment efforts than on tit-for-tat retaliation against high-profile US tech companies. Not only because there’s little the Chinese can do on this front that they haven’t been doing for years, with most American social media platforms already banned from the Chinese market. But also because targeting any remaining potential targets, such as Apple or Tesla, risks dampening foreign investor sentiment at a time when China is struggling mightily to boost confidence in its economy.

At the end of the day, Xi doesn’t care much about “decadent” consumer apps such as TikTok. He’d rather worry about the commanding heights of tech and economic competition. The Chinese people writ large, however, would see a ban as yet another US attempt to constrain China’s rise.

Ian Bremmer

Ian Bremmer is President and Founder of GZERO Media. He hosts the weekly digital and broadcast show, GZERO World, where he explains the key global stories of the moment, sits down for an in-depth conversation with the newsmakers and thought leaders shaping our world, and takes your questions.

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