The TikTok Clusterfuck: Trump To Order Chinese Owner To Sell, Microsoft To Buy, And Competition Continues
There's been a panic over the last few weeks about TikTok, the rapidly growing social network that is owned by the Chinese internet giant ByteDance (by way of history: ByteDance purchased a startup called Musical.ly in 2017, and rebranded it TikTok in 2018, and then it started growing like crazy). A few weeks ago, the Trump administration started suggesting it would ban TikTok, and a story was built up around the idea that TikTok was some sort of national security threat, despite very little evidence to support this. A separate narrative was simply that Trump was annoyed that TikTok kids made Trump look bad in Tulsa by reserving a bunch of tickets to his rally that they never intended to use.
Either way, it was announced today that the Trump administration was likely to order ByteDance to shed TikTok and immediately with that was the news that Microsoft was a likely buyer.
The whole thing is kind of silly. The most compelling argument I've seen for why the US should ban TikTok came from Ben Thompson at Stratechery, who more or less says (this is a very simplified version of his argument, so read the whole thing) that since China mostly bans US apps and services within its Great Firewall, there's an uneven playing field. I tend to lean slightly the other way: that supporting more freedom is a better approach. It feels like banning TikTok or forcing a sale is stooping to their level, and even validating their approach. And that worries me. And, yes, in the short run it puts us at a slight disadvantage on the global playing field, but frankly, US internet companies are still doing pretty damn well. The idea that we need to force a sale like this sets a questionable and potentially dangerous precedent -- suggesting we don't think that American firms can really compete.
On top of that, if the concern is about China, then the fact that most of our network and computer equipment is built in China would seem like maybe a larger concern? But beyond a weird, similar freakout about Huawei, no one seems to be taking any serious interest in that. And that doesn't get into the fact that US intelligence has leaned heavily on US internet companies to try to get access to global data -- meaning that there does seem to be a bit of US exceptionalism built into all of this: it's okay when we do it, but an affront if any other government might do the same thing...
Separately, this whole situation with TikTok and Microsoft demonstrates the pure silliness of the antitrust hearing in the House earlier this week. Note that there were claims that the four companies there represented "monopoly power." And yet, just days later, we're talking about how a recent entrant in the market, which has grown up quickly, and which Facebook certainly sees as a threat, is so powerful on the internet that it needs to be sold from its Chinese owners -- and the leading candidate to purchase it, Microsoft, is not even one of the "too powerful" companies who were on the panel.
If a new entrant can rise up so quickly to be a "threat" and then needs to be purchased by another giant... it certainly suggests that the internet market still remains pretty vibrant, and not at all locked down by a few monopolies.