Comment by zzzeek
4 days ago
noahpinion has a great post [1] on this today and he points out the interesting observations we can make: 1. because it's "Beijing" who is tasked with deciding whether or not TikTok can be sold makes it extremely clear Bytedance is not an independent private company the way it would be the case in the US. They are legally required to obey CCP directives [2] 2. Beijing had every opportunity to sell the application off, and in fact they did just that with another app called Grindr some years back [3] without any fanfare. 3. That Beijing would rather close TikTok entirely, rather than sell it, shows how deeply important it is to Beijing that TikTok does not come under the control of another nation, including the US. it's well established that the government censors speech on TikTok including the speech of US citizens [4]
noah bangs on the "the government of China is really trying to weaken or destroy the economic capacity of the US" drum pretty hard and it's hard to disagree with the many books and arguments he cites. The current rush to Rednote has a lot of TikTokers making the argument that "See? Chinese people are great!" which is where they are confusing sentiment about the citizens of China with that of the Chinese government itself. It actually is great if there's a big cultural interplay between young US and Chinese citizens (not sure w/ Rednote though), so that we would be able to counteract a key propaganda point from Beijing which is that the TikTok forced sale is some kind of strike against the Chinese people. It's important that the point be made that this is about the hostility of the Chinese government itself, which is pretty clearly a hostile adversary to the US.
[1] https://www.noahpinion.blog/p/tiktok-is-just-the-beginning
[2] https://energycommerce.house.gov/posts/experts-agree-byte-da...
[3] https://www.theverge.com/2020/3/6/21168079/grindr-sold-chine...
[4] https://networkcontagion.us/wp-content/uploads/A-Tik-Tok-ing...
>Bytedance is not an independent private company
PRC banned exporting Bytedance algo. By that logic, no US companies are independent private companies due to US export controls. And TBH both points are true.
>Grindr
Grindr was foreign company acquired by PRC, and sale was reversed by CFIUS. Selling an acquired foreign company is geo/politically different than having your domestic company nationalized/appropriated by another. Which is quite literally a strike against Chinese people. Even PRC has never forced a US company from divesting US ownership, because that's a retarded tier of "hostility" only US hubris can imagine. And it's particularly retarded tier analysis from Noahpinion who thinks Chinese people won't view divestment requirement a PRC company as hostile against Chinese entrepreners, who are Chinese people.
> PRC banned exporting Bytedance algo. By that logic, no US companies are independent private companies due to US export controls. And TBH both points are true.
Chinese state control over private companies is far more pervasive, and less bound by rule-of-law, than that of the U.S. Export controls are not even the H2O molecule at the tip of the iceberg.
> Even PRC has never forced a US company from divesting US ownership
Bytedance is not being forced to divest; they can leave the market, just like Google and many others had to leave China.
>more pervasive
US spectrum export controls have been every bit as pervasive as PRC ones, pretending muh "rule of law" is a distinction without difference at this point. It's functionally the same.
>forced to divest
If US law is forced divestiture, then Bytedance is "force" to leave, because having US nationalize a PRC company is obviously a nonstarter except for the terminally stupid like noahopinion. Unlike Google + western platforms who "chose" (read: not banned) to leave because they "chose" not to comply with PRC laws that applies to all companies, including domestic PRC ones. The difference is US has no equitable law, i.e. some sort of data privacy law, that enables Bytedance to operate in US... while following the same laws that US companies do, as if Bytedance wasn't already bending backwards following additional requirements that US platforms do not have to follow (i.e. functionally Oracle JV).
Like fine, Bytedance needs to follow US laws, except US laws is designed specifically to prevent PRC companies from operating, vs PRC laws is designed to allow everyone to operate, just said operation is onerous - see retarded reciprocal argument that US companies should operate in PRC without abiding by PRC censorship laws that domestic platforms has to abide by. There's a reason FB and Google had internal programs to re-enter PRC market compliant with PRC laws (before being axed by internal dissent), because it's still feasble for US platforms to operate in PRC while being US (or at least JV) owned. So let's not pretend what US is doing is the same thing - PRC is more rule of law, US rule by law in this comparison. But again, functionally that hardly matters.
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Surely the value of the TikTok user base is >$0 even without the algorithm. Why not sell that part of it?
Whose buying? For how much. But maybe for the same reason Meta alleges it doesn't sell user data, because there's 7 billion other potential users who wouldn't look fondly at it. Counter productive as long as there's other routes for growth.
A forced sale would essentially gut them of their proprietary algo, which is leagues ahead of anything YT or Insta has. This algo and the associated TikTok assets can still be used a billion different ways around the world and in other apps.
Why would they ever want to help create an international competitor that could compete with them? I don't think any business would want to do that. Obviously the CCP has a level of access if they want it to data hosted in China, that's how it works with every company that has a physical location there.
that is exactly noah's point, that TikTok is an extremely potent application. Except it's not "a business" deciding this it's "a government", and China does not want to pass off this much capability to shape public opinion to the US while losing it themselves.
noahpinion is generally very insightful but I don't think his analysis holds water here. ByteDance is a major Chinese company -- if the EU tried to force the sale of Google you can sure as shit expect "Washington" to have strong feelings about this. The implication that Beijing controls ByteDance is not really supported by this evidence.
Some Japanese tried to buy one the these supposedly perfectly "independent private compan[ies]", and the US president said no, but that's completely different I'm sure.
right instead Biden ordered US Steel to close and cease all operations, just like Beijing is doing to TikTok. /sarcasm
there is no comparison between these events
TikTok has entire RoW (excluding India) market. Assuming US only bans in US... which TBH we don't know. There's no comparison because TikTok is still massively profitable without US, whereas US Steel is still a mess without JP.
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This is silly, the US is only 15% of Tiktok users.
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> That Beijing would rather close TikTok entirely, rather than sell it, shows how deeply important it is to Beijing that TikTok does not come under the control of another nation, including the US
I don't think it is important because of how 'powerful' a tool it is. I think it is more than being forced to sell it would be losing face and a humiliation (a la 19th century's Inequal Treaties). Also, they don't have to sell it altogether as the issue is only with the US.
So they just shut it down in the US and can say that they don't give in to blackmail while pointing out how hypocritical the US are ("free speech but only if controlled by the US" sort of angle).
why did they sell Grindr when presented with an identical set of constraints / demands ?
The two cases are just very different, why are you even comparing the case of an investment company buying a stake in an existing app with the original creator being banned from owning what they created?
This is an absolutely ridiculous line of reasoning. Tiktok has over a billion users, and about 150 million of those are American. It would be downright stupid to sell all of it just for the US market and it would set an absolutely disastrous precedent.
A social media site is not like a company that makes widgets. The latter's profits scale linearly with the number of widgets sold. A website's costs do not scale linearly (at least, not in the same way) with the number of users; much of the infrastructure cost is the same whether 500 million or one billion users are on the site.
It's entirely possible that a TikTok without US users is unprofitable. Especially given that US creators are 21 of the top 50 TikTok users with the most followers. <https://en.wikipedia.org/wiki/List_of_most-followed_TikTok_a...>
PS - That you seriously believe that tens of millions of iPhone-using Americans will buy, carry around, and constantly switch to an Android phone just to sideload TikTok boggles the mind.
Tiktok is an offshoot of Douyin, I don't think Douyin needs the US to be profitable, and software has a low marginal cost.
> PS - That you seriously believe that tens of millions of iPhone-using Americans will buy, carry around, and constantly switch to an Android phone just to sideload TikTok boggles the mind.
I never said so, I said I wouldn't be surprised if a significant number did. Having grown up in this environment I've seen people literally buy 4 year old iPhones just for iMessage. American teenagers are very weird about social media and this kind of behavior wouldn't be out of character.
American eyeballs are worth more than other countries' eyeballs.
Tiktok in other countries monetizes mostly using the shop, not ads. Turkey brings only slightly less revenue than the US.
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