TikTok’s new defence in DC: going on offence
The Chinese-run video app is upending its strategy for how to deal with US officials, writes
Last week, TikTok’s CEO, Shou Zi Chew, met with several influential think tanks and public interest groups in Washington, sharing details on how his company plans to prevent data on American users from ever leaving the United States. And the company’s lobbyists swarmed the offices of lawmakers who have introduced bills to ban the app, telling them that TikTok can be trusted to protect the information.
TikTok, the popular Chinese-owned video app, has been in the crosshairs of US regulators for years now, with both the Trump and Biden administrations weighing how to ensure that information about Americans who use the service doesn’t land in the hands of Beijing officials.
Through it all, the company has maintained a low profile in Washington, keeping its confidential interactions with government officials under wraps and eschewing more typical lobbying tactics.
But as talks with the Biden administration drag on, pressure on the company has arrived in waves from elsewhere. Congress, state lawmakers, college campuses and cities have adopted or considered rules to outlaw the app.
Now TikTok is upending its strategy for how to deal with US officials. The new game plan: Step out of the shadows.
“We have shifted our approach,” said Erich Andersen, general counsel of ByteDance, the Chinese owner of TikTok. He said that the company had been “heads down” in private conversations with a committee led by the Biden administration to review foreign investments in US businesses but that then the government put the negotiations “on pause”.
“What we learned, unfortunately the hard way, this fall was it was necessary for us to accelerate our own explanation of what we were prepared to do and the level of commitments on the national security process,” Mr Andersen said.
TikTok is at the centre of a geopolitical and economic battle between the United States and China over tech leadership and national security. The outcome of TikTok’s negotiations with the US government could have broad implications for technology and internet companies, shaping how freely digital data flows between countries.
For two years, TikTok has been in confidential talks with the administration’s review panel, the Committee on Foreign Investment in the United States, or CFIUS, to address questions about ByteDance’s relationship with the Chinese government and whether that link could put the sensitive data of 100 million US users into the hands of Beijing officials. The company assumed that those talks would reach a resolution soon after it submitted a 90-page proposal to the administration in August.
Under the proposal, called Project Texas, TikTok would remain owned by ByteDance. But it would take a number of steps that it said would prevent the Chinese government from having access to data on US users and offer the US government oversight of the platform. Some of those steps have been put in place since October.
The company has proposed putting all US user data into domestic servers owned and operated by Oracle, the US software giant. The data would not be allowed to be transferred outside the United States, nor would it be accessible to ByteDance or TikTok employees outside the country.
The programme proposes having CFIUS conduct regular audits of the new data system and creating a new unit, TikTok US Data Security, with 2,500 engineers, security experts, and trust and safety officials, all based in the United States, who have access to TikTok’s US user data for business functions. The unit would report to a threemember board assigned by CFIUS. In addition, TikTok’s source code, which offers insight into why certain videos are shown in users’ feeds, would be reviewed by Oracle and a thirdparty inspector.
The proposal, though, has yielded little response from the panel, Mr Andersen said. TikTok said it had asked about the status of the panel’s review in numerous emails and received little response. The company’s officials learn about the administration’s thinking on the proposal only through news coverage, they said.
In a statement, a spokesperson for the Treasury Department, the lead agency of CFIUS, said the panel was “committed to taking all necessary actions within its authority to safeguard US national security”. She declined to comment about TikTok’s depiction of the negotiations, saying the panel doesn’t comment on cases it may or may not be reviewing.
TikTok’s more aggressive lobbying stance will not necessarily yield different results. The company has few allies in Washington. The most powerful tech lobbying groups, like the Chamber of Progress and TechNet, prefer to represent US companies and have policies against representing Chinese companies. In fact, many big tech companies, like Meta, have argued that TikTok poses a security threat.
And lawmakers in both parties have expressed concern. Sen. Mark Warner, D-Va., the chair of the Intelligence Committee, has said that the company has misrepresented how it protects US data from Chinese-based employees and that he is considering a bill to outlaw the app in the United States.
On Tuesday, Sen. Josh Hawley, R-Mo., introduced a bill to ban the app for all American users after successfully passing a bill in December that banned the app on all devices issued by the federal government.
“A halfway solution is no solution at all,” said Mr Hawley, who is among a growing number of lawmakers who don’t see a compromise on data storage and access as a solution to TikTok’s security risks.
Yet the growing pressure on the company has left it few options other than changing its approach, many outside experts say.
“The issue has become public in a way that they can’t ignore,” said Graham Webster, the editor-in-chief of the DigiChina Project at the Stanford University Cyber Policy Center. “And this may be
their way of pushing to actually get the CFIUS agreement completed, which is really their best chance of a sustainable business path in the United States.”
In a 24-hour visit to Washington last week, Mr Chew held four back-toback 90-minute meetings with think tanks like New America, academics and public interest groups such as Public Knowledge. In the company’s temporary WeWork suites near Capitol Hill, Mr Chew and Mr Andersen outlined the promises in Project Texas in a presentation with graphics on how the data is stored in Oracle’s cloud and TikTok’s appointment of a content moderation board and auditors.
They told the groups that the company rebuked allegations that China interferes in the business but that they had built the system to prove their commitment to security, according to people at the meetings.
“It seemed like a serious effort,” said Matt Perault, the director of the Center on Technology Policy at the University of North Carolina, who attended a briefing and whose centre receives funding from TikTok.
He added that the company appeared to be trying to shift the discussion about it from hypothetical risks to operational and technical solutions. TikTok would spend US$1.5 billion to set up its proposed plan and then as much as $1 billion a year. US users may have a slightly worse experience with the app outside the country, a cost of operating from Oracle’s servers, the
company executives said.
Mr Perault said even with those efforts, “they can’t make something zero risk”.
“There is no way they can guarantee data won’t go to an adversary in some way,” he said.
As part of its more aggressive public relations offensive, TikTok has invited journalists to Los Angeles this month for a first-time tour of what it calls its “transparency and accountability centre”, a physical space where it shows how humans and technology moderate videos on the platform.
In recent days, TikTok and ByteDance have posted a half-dozen communications and policy job openings in Washington. The new jobs would add to the 40 lobbyists whom the companies now has on contract or as employees. Those lobbyists include four former members of Congress, such as Trent Lott, the former Republican Senate majority leader, and John Breaux, a former Democratic senator from Louisiana. The companies have also recently posted job openings for roles doing strategic communications and policy for engagement with state and federal officials.
ByteDance spent $4.2 million in federal lobbying in the first three quarters of 2022 and is expected to far outpace that figure this year.
A spokesperson for TikTok said the company’s lobbyists had a hard time scheduling meetings with lawmakers who were critical of the company in
TV appearances.
Reps. Mike Gallagher, R-Wis., and Raja Krishnamoorthi, D-Ill., who are co-sponsors of the bill in Congress to ban TikTok, said they planned to meet with the company soon.
But Mr Krishnamoorthi made it clear that he would not be easily persuaded to change his position. He said in an interview that TikTok was “taking a more aggressive stance in Washington” but that the company had yet to meaningfully address some of his concerns, such as how it would respond to a Chinese media law that allowed the government to secretly demand data from Chinese companies and citizens.
Mr Gallagher said he wanted more information from CFIUS about ByteDance’s proposed ownership structure.
“I come in somewhat sceptical. I prefer a ban or a forced sale, but I’m more than willing to do my due diligence in examining the technical aspects of such an arrangement,” he said. And even then, he added, “where we have a lot of unanswered questions” is around how its recommendation system works.
Mr Gallagher said new questions kept popping up as well. He pointed to reports about ByteDance tracking journalists, and Michael Beckerman, TikTok’s head of public policy for the Americas, struggling in a recent CNN interview to answer questions about China’s treatment of Uyghurs, a Muslim minority in the Chinese region of Xinjiang.
‘‘ It was necessary for us to accelerate our own explanation of what we were prepared to do. ERICH ANDERSEN General counsel, ByteDance