The future of one of the world’s fastest-growing social media companies may be in the hands of a politician. That sentence should scare you.
Last month, President Trump signed an executive order prohibiting Chinese mobile apps WeChat and TikTok from operating in the United States beginning this month. However, there may be hope for one or both of these apps if they can find American buyers quickly. Trump supports a potential deal that would allow Oracle and Walmart investors to take majority ownership of TikTok. The parties are awaiting approval from Beijing, which has been complicated by recent Chinese restrictions on selling technologies to foreign companies.
The story is rapidly evolving, and we’ll have to wait to see what comes of it in the following days. However, the command-and-control principles the Trump administration is embracing with regard to the sale sets a bad precedent. Moreover, President Trump’s insistence that the buyers cough up $5 billion to the government to promote “patriotic education” is taking government overreach in private business to new heights.
There is no denying that the operation of TikTok in the United States poses security risks considering the company’s ties to the Chinese Communist Party. Although technically incorporated in the Cayman Islands, TikTok is a company owned by the Beijing-based company ByteDance, and the CCP exerts great control over Chinese companies. TikTok’s privacy policy has previously said that it would share data with Chinese law enforcement and public authorities if required, though the company now maintains that it would not comply if such an order was given.
This situation certainly raises some red flags, but TikTok should at least get the benefit of the doubt before being convicted of treason in the kangaroo court of politicians’ opinions. There is little evidence to suggest that TikTok is actively engaging in espionage, and there are other government tools to punish privacy violations short of forcing a sale.
For instance, ByteDance was fined $5.7 million by the Federal Trade Commission in February because the predecessor app to TikTok, Musical.ly, illegally collected information from minors. Similar enforcement actions could be taken if evidence comes to light. Moreover, Congress could pass a comprehensive federal privacy law, which still to this day does not exist.
In any case, the president of the U.S. should not be dictating business deals from the Oval Office. Oddly, this sort of top-down, government-first approach to the private sector emulates the very country that the government is trying to protect TikTok users from. There are certainly government processes for mergers and acquisitions, but those processes should be initiated by businesses voluntarily, not by government force.
Moreover, the potential $5 billion fund to support “patriotic education” looks a lot like bribery. While seemingly supported by the potential buyers, the idea that private businesses should have to give a cut of their profits to the government in addition to taxes is cronyism to run amok. One can imagine it serving as a precedent, with future presidents using the power of government to throttle or halt potential acquisitions unless the parties pay a sum to their pet projects. Whatever problems the president has with public education, $5 billion is not nearly a big enough sum to fix them.
TikTok’s ties to the CCP certainly raise legitimate concerns but forcing a sale of its U.S. operations, along with a tip to Trump’s new education initiative, takes government meddling to new heights. The president should take a breather and let market forces, guided by legislation and law enforcement, take the lead in determining TikTok’s future in the U.S.
Casey Given (@CaseyJGiven) is a contributor to the Washington Examiner’s Beltway Confidential blog. He is the executive director of Young Voices.
