On Friday, September 18th, the US Commerce Department announced what amounts to a ban of TikTok and WeChat in the United States. The scope of the ban is explained fully in the below set of tweets:
Essentially, WeChat and TikTok will no longer be available for download in the United States starting on September 20th (for WeChat) and November 12th (for TikTok).
This is the right thing to do, and it’s being done for the wrong reasons. The Chinese government demands that all Chinese-domiciled companies share commercial data with them upon request. It’s simply indefensible that a scaled social media product be allowed to operate in the US without any sort of restrictions placed on the data it collects from users if that product’s owner is compelled to share data with the government of the country in which it is domiciled. TikTok’s user base grew by 75% in the US from the beginning of the year: according to App Annie, it has nearly 54MM weekly active users in the United States, for almost 17% of the American population.
But these bans are clearly being instated for political reasons. The circus that was the original forced brokerage of TikTok’s US operations ended up doing nothing but gifting Oracle, a company helmed by a vocal supporter of the current administration, with a sweetheart cloud services deal. The national security interest was not bolstered; instead, a vociferous advocate for the administration’s policies was handed a lucrative contract for managing hosting and delivery in the US, despite his company, Oracle, having no ostensible expertise in social network delivery.
It appears that the proposed Oracle-TikTok deal, which tentatively passed regulatory scrutiny, was not weighty enough to appease the administration, and thus the proposed bans today. Is the Commerce department attempting to force an outright sale? Or is this simply posturing at the prelude of a trade war?
Either way, it’s reckless. If these rules are to be conjured and these boundaries are to be delimited, then those things should be so done systematically and with a sober sense of import. The dizzying volatility and capriciousness that has animated this entire episode is a scandal. The outcome of this moment will define the American commercial environment, especially as it concerns the technology sector, going forward: it needs to be constructed thoughtfully and with a sense of seriousness, without the dark shadow of venality and inside dealing that the Oracle deal casts.
Heightened scrutiny and data harvesting standards should be applied to products that share data with the governments of their domiciled countries, but the right thing for the wrong reasons isn’t something that can be celebrated.