Why TikTok’s parent company could face divestment or U.S. ban of the platform

Geoff Bennett:

TikTok is once again in the crosshairs of Congress, as the House of Representatives weighs a bill that would either require it to divest from its Chinese owner or face a ban nationwide.

Congressional correspondent Lisa Desjardins takes a deeper look at the brewing battle over the nation's fastest growing social media platform.

Woman:

Hey, we're going to call United States Congress.

Lisa Desjardins:

A young medium using an old method.

Woman:

Hi. I heard that you're trying to shut down TikTok.

Lisa Desjardins:

TikTokers have besieged Congress with calls…

Man:

This is just a request for her to vote no.

Lisa Desjardins:

… on a sweeping bill that suddenly is on the fast track, unanimous in committee last week.

Woman:

There were 50 ayes and zero no's.

Rep. Cathy McMorris Rodgers (R-WA):

The bill is adopted.

Lisa Desjardins:

The bill would force TikTok's Chinese parent company to either sell it or face a U.S. ban.

Today's closed-door briefing about TikTok produced strong sentiment.

Rep. Chip Roy (R-TX):

You have got a privately held company that is heavily owned by the Chinese Communist Party, so that's a problem.

Rep. Nancy Pelosi(D-CA):

We want to make it something that is a — not a fearful social media platform, but one that is very positive. And in order to do that, we have to see the divesting of it from the Chinese government.

Lisa Desjardins:

Here's the crux of the debate. TikTok's U.S. headquarters is in California, but it is controlled by a larger company, ByteDance, headquartered in Beijing.

ByteDance also owns a separate but parallel Chinese version of TikTok called Douyin. The Communist Party has a small stake in that, and a big voice, with a Communist Party official sitting on the board. A ByteDance whistle-blower has charged that the Communist Party uses Douyin for spying on protesters and others. The concern is that there's a path for the Communist Party to access U.S. data.

TikTok claims, no, that it has walled off U.S. data. Adding to this turbulence is another force, former President Donald Trump , who's been up and down, but mostly does not like a TikTok ban.

Donald Trump , Former President of the United States (R) and Current U.S. Presidential Candidate: There's a lot of good and there's a lot of bad with TikTok. But the thing I don't like is that, without TikTok, you are going to make Facebook bigger.

Man:

Just put it in my little ring mount and hit record.

Lisa Desjardins:

Caught in the crosswinds are TikTok creators like renovator Alex D'Alessia, who first spoke to "NewsHour" last year.

Alex D'Alessia, TikTok Creator:

I just wish they would try and exhaust all other options prior to potentially canceling it.

Lisa Desjardins:

We asked him what he thinks of this latest bill and what it would mean for him.

Alex D'Alessia:

It's just frustrating that the people voting on this bill are not the people that are using this app or really understand what it means to us. I'm currently — like, behind me is our new fixer-upper, which we just bought with the money I have been earning from my business, which is from TikTok.

And we have a baby on the way, a month away, our first baby, which we're super excited for. So I'm quite literally supporting my family, all of my business that is surrounded around this app.

Lisa Desjardins:

President Biden has said he would sign the bill, but its fate in the Senate is unclear. And, of course, before any of that, it must pass the House, which is possible tomorrow.

To discuss are the House sponsors, CongressMan Mike Gallagher and Raja Krishnamoorthi, chair and ranking member, respectively of the Select Committee on the Chinese Communist Party.

Let me ask right at the top, what is the danger of TikTok that you see?

Rep. Mike Gallagher (R-WI):

The fundamental danger is that TikTok is owned by ByteDance, and ByteDance is beholden to the Chinese Communist Party.

So, from this flow two concerns, one being the security of Americans' data on the platform, but the other, and I think broader concern, is the potential for this platform to be used for the propaganda purposes of the Chinese Communist Party.

And, there, we got a preview of what could happen in that scenario last week, when TikTok pushed a push notification to all its users, asking them for their zip code, and then having them call members of Congress. It was based on a completely inaccurate message to their users, and you had teenagers calling Congress, saying, if you ban TikTok, I will kill myself.

Imagine what could happen the closer we get to an election. The unclassified director of national intelligence assessment released yesterday said, TikTok is already being used to target members of Congress in both parties politically.

Lisa Desjardins:

I know both of you probably forgot those phone calls, including today.

And I know this is a carefully targeted bill, but, still, today, we saw on the Hill TikTok creators and other members of Congress speaking out, saying they think that this is a violation of basic rights. I wonder how you approach the First Amendment issues. Do you understand the First Amendment issues at play, the business issues at play, and why is this worth it?

Rep. Raja Krishnamoorthi (D-IL):

Sure.

Well, first of all, there's no First Amendment right to espionage. There's no First Amendment right to harm our national security. Basically, we commonly have foreign ownership laws with regard to broadcast outlets, telecoms, railroads, banks, and so forth. So this is not unusual.

What we're saying is that an establishment such as Tik — this platform can basically engage in free speech as it is. We are not trying to ban the content or trying to discriminate between one type of speech versus another. What we're concerned about is the conduct of the platform and being used in the ways that Mike alluded to, for instance, weaponizing data against people, endangering our national security in other ways, interfering in our elections, basically doing the things that go against our national security.

So we want this platform to continue to operate. We don't want to ban it, but we are calling for a divestment of TikTok by ByteDance, so that we can continue to have this platform operate but without the control of the CCP.

Lisa Desjardins:

But, realistically, CongressMan Gallagher, wouldn't a possible effect be the loss of this content and the banning of this platform?

Rep. Mike Gallagher:

It doesn't need to be. The TikTok user experience can continue and even improve as long as ByteDance decides to sell TikTok.

That is the obvious solution that everybody wants. Even those who are invested in ByteDance should want that outcome, because if TikTok is ever going to go public in an American market, it's simply not going to happen under the current ownership structure.

And I would say the greatest threat to expression on TikTok, which this bill doesn't say anything about, is continued CCP Manipulation of the algorithm and the lack of transparency surrounding TikTok's algorithm. So if you want the platform to continue and improve going forward, the only solution, the most responsible and prudent solution is a separation.

Lisa Desjardins:

There was a Montana ban against TikTok, which was struck down. And that's not what you — I know it's not a ban that you have in the same way.

But the judge took on some of your arguments in that case. The judge did not see a national security argument there, also felt that users are agreeing to give out their data. So I wonder how you respond to that idea from TikTok and ByteDance that there really isn't proof that they have maliciously harmed U.S. citizens?

Rep. Raja Krishnamoorthi:

Well, first of all, in that particular Montana case, the judge basically said that Montana was not in a position to judge the national security interests of the country.

In this case, the Biden administration is actually asking for this legislation. The Biden administration actually helped to fashion the legislation and is able to assert its authority in a way that the Montana legislature was not.

The other thing I would just say is, again, what we know that TikTok has said about its own platform is untrue. TikTok said that its user data, American user data, is stored here in America or Singapore. That's false. Some of the data has been stored on PRC servers in China.

Secondly, TikTok says that its data is not accessible to people in China. Again, false. Published reports show that Chinese-based ByteDance employees have routinely accessed this data, unbeknownst to American users. And then, third, TikTok says this data has not been weaponized in any way. Again, false.

Published reports, including by journalists who were targeted by TikTok for reporting on these data access issues, have repeatedly said that their user location data was used against them. And so we can't abide a situation where the company that says that it's not doing X, Y, and Z is actually doing it and then just look away, pretending there's no national security concern.

Lisa Desjardins:

In the last-minute or so we have here, you have both seen classified information about this situation that most Americans don't have access to.

But I wonder, considering that, what do you say to kids, perhaps CongressMan Krishnamoorthi, your kids, who are TikTok age, about whether they should be using it and to those content providers about why you're making this pretty profound move by the U.S. government?

Rep. Raja Krishnamoorthi:

Well, Mike has kids too. They're a little younger, but I have got an 18, 14, and 7, so I'm ready for anything in Congress.

But, in all seriousness, my kids don't use it, although they have talked to me about it in the past, because of the issues that I alluded to before. I will just say — and Mike and I have mentioned this before — the content that you see on TikTok in the United States is so different than the content that you see on Douyin, which is the TikTok equivalent in China.

In China, it's — they promote content about healthy living, about STEM education, about calisthenics and exercise, even for young adults. Here in the United States, it's about drug paraphernalia, oversexualization of teenagers, and it's constant content about suicidal ideation.

That's wrong. We can't have that situation where the algorithm is Manipulated in that way. With regard to legitimate content providers and others, we want you to be able to continue doing what you're doing. We just don't want to have this platform that's controlled by the CCP.

I expect that, just as before, when we required the Chinese to divest Grindr, which was then controlled by a Chinese company, they quickly did it. There was no disruption of service to the users. And that's what we will see with TikTok as well.

Rep. Mike Gallagher:

And my message to my 3.5-year-old and 1.5-old is that they should do whatever Raja's kids are doing, because I have met them. They're extremely smart, and I want my kids to grow up and be as responsible and smart as Raja's kids.

So I have outsourced my parents — my parenting to Raja in this case.

Rep. Raja Krishnamoorthi:

I approve that message.

Lisa Desjardins:

Well, we appreciate both of you talking to us. And I'm sure your kids will be watching this on the show tonight.

Rep. Raja Krishnamoorthi:

Thank you.

Lisa Desjardins:

CongressMan Mike Gallagher and Raja Krishnamoorthi.