This week, a bipartisan group of lawmakers announced the introduction of a bill to force TikTok parent company, ByteDance, to divest TikTok in order to continue operating in the US. Pirate Wires described the series of ups and downs the app has experienced over the last few years.
Chinese law requires the Chinese Communist Party (CCP) be able to access any customer data from Chinese companies, which led to an investigation in 2019 and a class-action lawsuit in 2020, leading to an executive order pushing for the ban of TikTok, though that ultimately failed. Next, in 2021, TikTok executives testified the company didn’t share data with the CCP before, in 2022, leaked internal audio at ByteDance revealed employees in China accessed confidential American user data.
TikTok’s most recent attempt to assuage concerns in the U.S. was the creation of Project Texas, “a $1.5 billion initiative to ‘make every American on TikTok feel safe’ by ensuring their data was stored on US-based servers operated by Oracle, an Austin-based company… Yet shortly after the hearing, Pirate Wires found a number of “limited exceptions” clauses in Project Texas allowing ByteDance employees to access American user data.”
Between an estimated ~$7 billion in 2024 revenue, and a rapidly expanding commerce operation, TikTok represents a formidable business. The ban of a company that size, with over 100 million users, can feel untenable. But that’s before you remember that China’s “Great Firewall” has blocked US social media companies for years, including Facebook, Google, Twitter, Snapchat, Reddit, and more.
Destabilizing geopolitical conditions will continue to shape the technology market. And increasingly, that line will be drawn across different value systems. For example, while US companies are deploying significant effort to enforce policies like GDPR and CCPA, China has built a mass surveillance state and social credit score based on that surveillance.
From AI and robotics to commerce and logistics, there will be an increasing divide between Chinese and US operations. While the economic motivation to engage with the Chinese market kept the US open-minded for decades, that is changing. In one 2023 survey, 46% of Americas said they believe “US leaders are not paying enough attention to the issue of US competition with China.” The TikTok divestiture may be a high profile divide, but it is unlikely to be the last.
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