China’s Silent Tech Crackdown

China is exerting more subtle methods to tighten its grip on the country’s growing technology sector. The government has taken an ownership stake of at least 1% in a subsidiary that controls the domestic Chinese social media and information platforms of ByteDance, the Beijing-based company that owns TikTok. The arrangement has also given the Chinese government three seats on the board of ByteDance.

ByteDance Headquarters (Source: CNN)

The ownership stake on the surface does not appear to directly affect TikTok — the wildly popular video service that last year surpassed Facebook Messenger as the most downloaded app in the United States. However, the recent development could prompt fresh debate about whether TikTok poses national-security risks to American users.

In any case, it suggests that China is pushing for more sway over ByteDance, whose TikTok-clone platform inside of China is called Douyin. China’s move comes amid a months-long push by Beijing to assert more control over a domestic technology sector that has spawned a variety of successful and powerful companies active in social media, music streaming, online shopping and mobile payments.

The Trump White House previously attempted a ban on TikTok in 2020 via executive order, citing national security concerns to prevent Beijing from exploiting the app to collect user data and continuing to disseminate propaganda.

In June, the Biden White House revoked that order and replaced it with a “process” to scrutinize whether apps controlled by a foreign adversarial power presents risks to national security or to Americans’ sensitive personal data. Senior Biden administration officials said at the time that they remained concerned about the risks posed by apps owned by Chinese companies but wanted to establish a more “robust” process for reviewing them. They noted that the previous administration’s ban had faced several court challenges that led judges to temporarily block the ban while the cases proceeded.

The politics of Beijing are more frequently being perceived and billed to media as compliance measures, and not what they likely are, outright forced corporate cohesion to the needs of the CPC. Private ownership and control are not guaranteed, consistency of rule of law changes virtually overnight, and any semblance of process is largely absent. This is following a continuous pattern of a tightening on companies that were temporarily granted exemption from state control. Now that they’ve been nurtured to scale, the party is further solidifying its power.

With Alibaba’s Ant Financial, the party made a lot of noise in reigning in the threat of independent corporate power. Its light touch approach with ByteDance is likely nothing more than a PR stunt. The CPC now appears to be fully committed to checking anything that threatens its supremacy. These moves present very real concerns to citizens of the west that use these applications in how their personal data may be used and collected.

The threat of tech giants’ power over citizens in the United States free of government ownership is already large a large threat, now we’re seeing something possibly more dangerous.

The American elections in 2016 and 2020 have already demonstrated the vast capacity to leverage these platforms to “program” entire populations. What happens when an adversarial foreign power has that capacity as well with an American Congress seemingly being largely asleep at the switch.

The private sector could end this by two companies making a decision to remove the threat from the public, but they’re focused on the bottom-line, not disrupting their access to one of the largest consumer markets in the world.

Source: Brookfield Brief