Editor’s Note – As the technological realm becomes more pervasive, whom can we trust? Each week, Liberty Nation brings new insight into the fraudulent use of personal data, breaches of privacy, and attempts to filter our perception.
On August 6, President Donald Trump issued two executive orders declaring that Chinese apps TikTok and WeChat would be banned 45 days later. As the deadline loomed over the weekend, both executive orders saw action with last-minute twists worthy of a Hollywood screenwriter. So, what’s going on in the technological game of Chinese chess?
The Department of Commerce recently declared that, as of Sept. 20, U.S. transactions with both WeChat and TikTok would be prohibited. “The Chinese Communist Party (CCP) has demonstrated the means and motives to use these apps to threaten the national security, foreign policy, and the economy of the U.S.,” it reasoned. But was it ever going to be that easy?
As with so many Trump executive orders, these were bound to be challenged in the courts. Just hours before the WeChat deadline was to come into effect, a California federal court blocked the ban. Magistrate Judge Laurel Beeler of the District Court in Northern California placed a preliminary injunction against the Department of Commerce, citing freedom of speech concerns.
The key issue with the WeChat order is that, since China has itself banned many U.S. apps like Facebook and WhatsApp, WeChat is one of the only providers which enables communication between people on the Chinese mainland and those overseas. It’s also the one that Chinese-speakers with little English know how to use.
A lawsuit was brought against the order by the U.S. WeChat Users Alliance, a non-profit initiated by five lawyers of Chinese descent, who say the ban is a free speech issue. The Alliance posits that the executive order violates the First Amendment by outlawing a critical means of speech and communication among certain communities. It was on these grounds that Judge Beeler ruled for an injunction, stating:
“Certainly the government’s overarching national-security interest is significant. But on this record — while the government has established that China’s activities raise significant national security concerns — it has put in scant little evidence that its effective ban of WeChat for all U.S. users addresses those concerns. And, as the plaintiffs point out, there are obvious alternatives to a complete ban, such as barring WeChat from government devices, as Australia has done, or taking other steps to address data security.”
WeChat, otherwise known as Weixin, is an instant messaging app widely used within China. That’s not all it does, though – it has a few other social media features such as the ability to post “moments,” and a “shake” function that allows users to locate other WeChatters nearby and meet up. More fundamental uses include accessing public utilities and one’s online ID card, taking public and private transport, and of course, the ubiquitous WeChat Wallet, which connects to users’ bank accounts and facilitates cashless financial transactions. It is also a host for China’s Coronavirus tracking app, which determines where people are allowed to go based on their health scores. Owned by tech giant Tencent, WeChat has slowly been evolving from a simple social media app to an all-encompassing one-stop shop for conducting modern life in the Middle Kingdom.
TikTok Deal – Is It What Trump Wanted?
As soon as Trump suggested he might bar TikTok unless it sold its American operations to a U.S. company, speculation erupted about what would become of the video-hosting app. Microsoft entered the running to buy a branch of the company, but those negotiations went down the drain after it apparently annoyed China by referring to TikTok’s present iteration as a security risk. Now, it appears software company Oracle will team up with Walmart to take on a purchase of TikTok – or will they?
After expressing early misgivings about the pitch, Trump on Sept. 19 came out in favor of the potential deal, giving it his “blessing.” He touted the financial benefits for the U.S., including billions in taxes, 25,000 jobs, and funding for education. “Conceptually, I think it’s a great deal for America,” he added. “Security will be 100%.”
“It will be a brand new company, it will have nothing to do with any outside land, any outside country, it will have nothing to do with China, it’ll be totally secure, that’ll be part of the deal,” the president stated. However, observers were quick to point out that the existing proposal falls short of Trump’s demand that U.S. operations be taken entirely out of Chinese hands. The offered deal says Oracle will become a “trusted technology provider” investing in a joint venture rather than becoming the new owner of a company.
Under the prospective deal, a new company would be set up, TikTok Global, to be 80% owned by ByteDance (TikTok’s parent company) with Oracle and Walmart picking up 20% before an initial public offering on the stock market within 12 months. ByteDance also cast doubt on the education fund highlighted by Trump, saying that was the first the company had heard of it. Oracle has said, however, that it will contribute to education by working with TikTok “to develop and deliver an AI-driven online video curriculum to teach children from inner cities to the suburbs.” With ByteDance retaining majority ownership in the U.S., can it really be said that TikTok will no longer be a Chinese operation?
China Starts to Play Trump at his Own Game
Reuters recently reported that China would rather face a TikTok ban than sell part of the app to a U.S. entity. The China Global Television Network, a state-owned broadcaster, stated no sale would occur.
In a rather Trumpesque move, the Chinese Communist Party in late August inserted itself into the furor by expanding its technology export rules. It demanded that companies seek approval from the state before selling certain types of technology to overseas buyers. This includes the kind of algorithm TikTok relies on to draw millions of users down a rabbit hole of suggested videos based on individual preferences. Essentially, China may not let ByteDance sell its key algorithms without first obtaining a government license, if at all. Under the proposed deal, Oracle will not gain ownership of TikTok’s technology, but it will be allowed to conduct security inspections on it.
The move is part of a broader CCP trend of attempting to gain greater influence over China’s tech entrepreneurs. A Sept. 15 memo released by the CCP’s central committee urged a strengthening of “political thinking guidance of personnel in the private sector,” as reported by Xinhua.
To add to the tension, China also announced that it‘s come up with an “unreliable entities list” of foreign “enterprises, other organizations and individuals” that it may blacklist – although it didn’t divulge any specific plans. The move was seemingly formulated to mirror U.S. policies that have targeted Chinese entities such as tech provider Huawei.
The results of this dispute will likely impact the future of technology between two superpowers, and signal where dominance will lie over the next decades. As each country makes its moves, the situation is starting to resemble a high-stakes game of chess, or Xiangqi.
That’s all for this week from Tech Tyranny. Check back next Monday to find out what’s happening in the digital realm and how it impacts you.
Read more from Laura Valkovic.