The TikTok story is becoming stranger by the day. On the one hand, it’s part of an ever-expanding war for global influence between Beijing and Washington.
Weaponized Social Media
President Donald Trump has threatened to ban the China-based social media app unless it’s acquired by a U.S. company. Like the banned Chinese-owned smartphone and network equipment makers Huawei and ZTE, TikTok has been accused of stealing data and user information for exploitation by the Chinese Communist Party (CCP).Microsoft Is Not the Answer
For one, Microsoft is the likely buyer of TikTok. But given Microsoft’s deep and decades-old relationship with Beijing, that may not solve the problem. The founders of ByteDance, the China-based owners of TikTok, are themselves Microsoft alumni.For another, it would certainly add to Microsoft’s power in digital and social media space, giving it tremendous influence over content allowed on TikTok and its millions of U.S. users. The last thing we need is another tech giant accruing more power and influence over the American people.
However, given the nature of the CCP and its history of abusing Western companies and flouting intellectual property laws, it’s undoubtedly also a wise policy on the part of the United States.
A Piece of the Action?
Trump has recently said that the U.S. Treasury should get a cut of the TikTok sales proceeds. How much money the United States should get from the estimated $50 billion company is unknown. Such a condition of a sale is unheard of in the United States.Trump’s reasoning is that access to the U.S. market is what allowed TikTok to become so valuable, so any windfall profits should be shared with the U.S. government. By that reasoning, any company in the United States that gets bought or sold may owe a chunk of the sales price to the U.S. Treasury.
From a seller’s perspective, capital gains taxes do just that. But what about the buyers? What should they be required to pay? The federal government isn’t in the position—or shouldn’t be—to get a cut of business deals. That’s what fascist and communist countries do.
But there’s another aspect to the forced sale.
Adding to Microsoft’s Power Is Unwise
That’s difficult to justify in a variety of contexts. For instance, Congress is seriously considering breaking up the near-monopolistic tech giants such as Twitter, Facebook, and others because they already have too much power with little or no competition in the marketplace.Do we want to extend Microsoft’s already long reach, especially given its fealty to Beijing?
Besides that, it’s already the dominant operating system player on the globe. If anything, the federal government should be looking at ways to limit the company’s power and influence in the marketplace.
On the other hand, where does the federal authority to dictate which U.S. company can buy what company stop? Obviously, anti-trust laws provide the necessary authority to protect the U.S. market and consumers.
But, as Huawei demonstrated, national security is also a big factor. In the case of TikTok, both factors are in play. Trump’s demand for “a piece of the action” is, however you look at it, dangerously misguided and contrary to who we are as a country.