Banning TikTok opens a Pandora’s Box other platforms want closed
Donald Trump’s move has laid bare the different rules for different forms of media, and Facebook and Google want them ignored
Be careful what you wish for.
You might think that the Trump administration banning Chinese ownership of video-sharing app TikTok in the US on national security grounds would be a win for social media competitors such as Facebook, Alphabet and Twitter. Selling Bytedance’s operations in several major English-speaking markets to Microsoft raises the hope that TikTok might suffer the sort of benign neglect that’s neutered other Microsoft-owned media assets, such as LinkedIn and Skype.
Facebook lost no time in launching a copycat video-sharing service to compete.
The decision opens a Pandora’s Box that digital platforms might one day wish had been kept closed. By citing data privacy and foreign influence to justify its restrictions, the US has thrown a spotlight on issues that Silicon Valley’s social media companies have done well to keep in the shadows as they’ve grown to world-spanning power.
While it’s tempting to label President Donald Trump’s actions around TikTok a “shakedown”, his administration hasn’t been uniquely hostile to foreign investment, despite a barrage of hot rhetoric and high-profile cases around Huawei Technologies and ZTE.
Even after a law was passed in 2018 to tighten national security scrutiny by the committee on foreign investment in the US, Washington’s takeover-review panel, investigations by 2019 were being initiated at a rate similar to during president Barack Obama’s second term. Foreign direct investment in the US, meanwhile, has continued to tick upwards around long-term trend rates.
Media companies have always been regulated more tightly, especially in relation to foreign ownership. Rupert Murdoch had to give up Australian citizenship to buy a group of US TV stations in 1985, and little has changed since. When a British-Polish couple spent $8,000 buying a tiny radio station serving the upstate New York town of Tupper Lake in 2018, they needed to apply for a special waiver from the Federal Communications Commission (FCC).
Those regulations were designed for an era that had never conceived of Facebook, though
In that context, the lax treatment of digital media platforms looks like a loophole that’s never been closed. TikTok hasn’t needed to get a permission note from the FCC to get a lock on the attention of tens of millions of Americans, any more than Facebook has needed to jump media-ownership hoops in other countries to become the prime news source to more than 2.4-billion active users outside the US.
Part of the reason for the distinction comes down to a simple issue of enforcement. Broadcasters are treated as special cases because they depend on licences to the limited public radio spectrum, giving governments leverage they don’t have over print and digital companies.
Still, behind all media regulation is a recognition of the industry’s importance in forming a country’s public sphere and shaping the direction of political debate. That’s an awkward space for democratic governments, given how it edges close to controls on freedom of speech. Historically, the solution has been to use antitrust powers to prevent any player getting too large an audience, combined with foreign investment and local-content rules to prevent outsize control by overseas owners.
Those regulations were designed for an era that had never conceived of Facebook, though. Thanks to that lack of oversight and decades of lobbying, the Silicon Valley companies that are now the world’s largest media businesses have been more or less exempt from the regulation their print and broadcast peers still deal with.
The extent to which this has been the case is remarkable. Even among authoritarian countries, China is unusual for banning US digital platforms. People in Vietnam, Saudi Arabia and Russia are, respectively, among the biggest users of Facebook, Twitter and Instagram. That’s been a quiet victory for companies that make billions in revenue outside the US. The attack on TikTok has made this status quo far more difficult to maintain.
In Europe, privacy issues have already spawned the General Data Protection Regulation that now puts cookie pop-ups on to every website you visit. The EU’s antitrust chief, Margrethe Vestager, has repeatedly warned that breaking up tech giants remains on the table, if only as a “last resort”.
It would be better for Silicon Valley’s social media companies if they could hold on a little longer to their fraying image as innocuous providers of cat videos and inspirational quotes, rather than under-regulated behemoths with the power to sway electorates.
By putting that issue so firmly on the agenda, the Trump administration hasn’t done them any favours.
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