TikTok’s new defense in Washington: Going on the attack

WASHINGTON — Last week, TikTok chief executive Shou Zi Chew met with several influential think tanks and public interest groups in Washington, sharing details about how his company plans to prevent user data. Americans to leave the United States. And corporate lobbyists have swarmed the offices of lawmakers who have introduced bills to ban the app, telling them TikTok can be trusted to protect information.

TikTok, the popular Chinese-owned video app, has been in the crosshairs of US regulators for years, with the Trump and Biden administrations weighing how to ensure that information about Americans using the service does not fall into their hands. Beijing officials.

Through it all, the company has maintained a low profile in Washington, keeping its interactions with government officials confidential and avoiding more typical lobbying tactics.

But as talks with the Biden administration drag on, pressure on the company has come in waves from elsewhere. Congress, state lawmakers, college campuses and cities have passed or considered rules to ban the app.

Now TikTok is upending its strategy on how to deal with US officials. The new game plan: step out of the shadows.

“We have changed our approach,” said Erich Andersen, general counsel of ByteDance, the Chinese owner of TikTok. He said the company had been “headlong” in private conversations with a committee headed by the Biden administration to review foreign investment in companies in the United States, but then the government had put negotiations “in break “.

“What we learned, unfortunately the hard way, this fall was that it was necessary for us to expedite our own explanation of what we were prepared to do and the level of commitments on the security process. national,” Mr. Andersen said.

TikTok is at the center of a geopolitical and economic battle between the United States and China over technological leadership and national security. The outcome of TikTok’s negotiations with the US government could have broad implications for tech and internet companies, determining the free flow of digital data 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 answer 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 officials in Beijing. The company assumed those talks would reach a resolution soon after submitting 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 he said would block the Chinese government from accessing US user data and offer the US government oversight of the platform. Some of these measures have been in place since October.

The company has offered to place all US user data on national servers owned and operated by Oracle, the US software giant. The data would not be allowed to be transferred outside of the United States, nor would it be accessible to ByteDance or TikTok employees outside the country.

The program proposes that CFIUS conduct regular audits of the new data system and create a new unit, TikTok US Data Security, with 2,500 engineers, security experts and trust and safety officers, all based in the United States. , who have access to the United States of TikTok. user data for business functions. The unit would report to a three-member board appointed by CFIUS. Additionally, TikTok’s source code, which provides insight into why certain videos are displayed in users’ feeds, would be reviewed by Oracle and a third-party inspector.

Some details of the proposal were reported earlier by The Wall Street Journal.

“We knew that in order to earn trust, we had to build a system that offered an unprecedented level of security and transparency – that’s what we have done and will continue to do,” Chew said in an interview.

The proposal, however, received little reaction from the panel, Andersen said. TikTok said it asked about the panel’s review status in numerous emails and received few responses. Company officials only learn of the administration’s thinking on the proposal through media coverage, they said.

In a statement, a spokeswoman for the Treasury Department, CFIUS’ lead agency, said the panel was “committed to taking all necessary actions within its authority to safeguard the national security of the United States.” . She declined to comment on TikTok’s description of the negotiations, saying the panel does not comment on cases it may or may not consider.

TikTok’s more aggressive lobbying stance won’t necessarily yield different results. The company has few allies in Washington. The most powerful tech lobby groups, like the Chamber of Progress and TechNet, prefer to represent American 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 from both parties have expressed concern. Sen. Mark Warner, a Democrat of Virginia and chairman of the Intelligence Committee, said the company misrepresented how it protects US data of China-based employees and is considering a bill to ban the application in the United States.

On Tuesday, Senator Josh Hawley, a Republican from Missouri, introduced a bill to ban the app to all US users after successfully passing a bill in December banning the app on all devices issued by the federal government.

“A middle ground is no solution at all,” said Hawley, who is among a growing number of lawmakers who don’t see a compromise on data storage and access as a solution to the risks. security from TikTok.

Still, the mounting pressure on the company has left it with few options other than to change its approach, according to many outside experts.

“The issue has gone public in a way that they can’t ignore,” said Graham Webster, DigiChina Project Editor at Stanford University’s Cyber ​​Policy Center. “And maybe that’s their way of pushing for the CFIUS deal to go through, which is really their best shot at having a sustainable business path in the United States.”

During a 24-hour visit to Washington last week, Chew held four consecutive 90-minute meetings with think tanks like New America, academics and public interest groups like Public Knowledge. At the company’s temporary WeWork suites near Capitol Hill, Mr. Chew and Mr. Andersen highlighted the promises of Project Texas in a presentation with charts on how data is stored in Oracle’s cloud and the appointment by TikTok of a content moderation board and listeners.

They told the groups the company refuted allegations of Chinese interference in business, but built the system to prove its commitment to security, according to people at the meetings.

“It seemed like a serious effort,” said Matt Perault, director of the Center on Technology Policy at the University of North Carolina, who attended a briefing and whose center receives funding from TikTok.

He added that the company seemed to be trying to shift the discussion about it from hypothetical risks to operational and technical solutions. TikTok would spend $1.5 billion to implement its proposed plan, and then up to $1 billion per year. US users may have a slightly worse experience with the app outside the country, a cost of running from Oracle’s servers, company executives said.

Mr Perault said that even with these efforts, “they can’t do something without risk”.

“There’s no way to guarantee that the data won’t go to an adversary one way or another,” he said.

As part of its more aggressive PR offensive, TikTok invited reporters to Los Angeles this month for an initial tour of what it calls its “transparency and accountability center,” a physical space where it shows how humans and technology moderate videos on the platform.

In recent days, TikTok and ByteDance have posted half a dozen communications and political jobs in Washington. The new jobs would be in addition to the 40 lobbyists the companies currently have under contract or as employees. These 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 also recently posted job openings for strategic communications and policy engagement positions with state and federal authorities.

ByteDance spent $4.2 million on federal lobbying in the first three quarters of 2022 and is expected to far exceed that figure this year.

A TikTok spokeswoman said the company’s lobbyists were struggling to schedule meetings with lawmakers who criticized the company during television appearances.

Representatives Mike Gallagher, a Republican from Wisconsin, and Raja Krishnamoorthi, a Democrat from Illinois, who are co-sponsors of the bill in Congress to ban TikTok, said they plan 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 is “taking a more aggressive stance in Washington,” but the company has yet to meaningfully address some of his concerns, such as how it would respond to a Chinese privacy law. media 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 skeptical – I prefer a ban or a forced sale, but I’m more than willing to do my due diligence to look at the technicalities of such an arrangement,” he said. And even then, he said, “where we have a lot of unanswered questions” is about how his recommender system works.

Mr Gallagher said new questions also continued to arise. He pointed to information about ByteDance tracking reporters 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 minority. Muslim from China’s Xinjiang region.

“What we’ve seen is a steady drop of negative information that challenges what they’ve said publicly,” Mr Gallagher said. “When I see things like this, what is left for me to conclude except that ByteDance and TikTok are afraid to offend their overlords in Beijing? It doesn’t reassure people like me.