Trump's TikTok assault opens new front in US tech war with China

Tue, Aug 04, 2020


BY GOING after TikTok, the US is expanding a fight against Beijing using Chinese-style restrictions on tech companies in a move that could potentially have enormous ramifications for the world's biggest economies.

The Trump administration's threat to ban ByteDance's viral teen phenomenon and other Chinese-owned apps could significantly hamper their access to global user data, which is an immensely valuable resource in a modern internet economy. Any US decision, which Secretary of State Michael Pompeo said would come "shortly", is likely to be followed by a similar pressure campaign that prompted some allies to ban Huawei Technologies Co from 5G networks.

Even if TikTok's American operations are bought by Microsoft Corp, the episode is the culmination of a bifurcation of the internet that began when China walled off its own online sphere years ago, creating an alternate universe where Tencent Holdings Ltd and Alibaba Group Holding Ltd stood in for Facebook Inc and Inc.

It is also splitting many in the industry: Some decry the betrayal of values like free speech and capitalism, while others advocate doing whatever it takes to subdue a geopolitical rival and its pivotal tech industry.

"This sets a dangerous precedent for the US", said Samm Sacks, a fellow on cybersecurity policy and China digital economy at the New America think tank. "We are moving down a path of techno-nationalism".

At issue is who controls the data - everything from private details like locations and emails to sophisticated mined information such as personal profiles and online behaviour.

Worryingly for Beijing, it's unclear where the US would draw the line given the extent to which data is essential for companies these days. While Washington's curbs against Huawei may have some grounds in terms of national security, the argument for banning TikTok is "very weak", according to Yik Chan Chin, who researches global media and communications policy at the Xi'an Jiaotong-Liverpool University in Suzhou.

While some of Trump's actions are regarded to be motivated by re-election considerations, others say going after TikTok has deeper significance. Already the world's most valuable startup with a price tag potentially of US$140 billion, ByteDance and its best-known product epitomises the can-do spirit of a generation of consumer tech companies that may follow Alibaba and Tencent.

"TikTok symbolises Chinese tech companies' ability in algorithms, artificial intelligence and the ability to go viral and gain profits within a short period of time", said Wang Sixin, a professor at the Communication University of China. Now US restrictions would force a contingent of up-and-coming stars in areas from gaming to livestreaming and media to reassess plans to expand globally just as they were starting to gain traction abroad. BLOOMBERG