TikTok’s New Defense in Washington: Going Offensive

WASHINGTON — Last week, TikTok CEO Shou Zi Chew met with several influential think tanks and public advocacy groups in Washington and shared details of how his company plans to prevent data on American users from ever leaving the United States. And the company’s lobbyists stormed the offices of lawmakers who had introduced bills banning the app, telling them that TikTok can be trusted to protect information.

TikTok, the popular Chinese-owned video app, has been in the crosshairs of American regulators for years, with both the Trump and Biden administrations weighing how to ensure information about Americans using the service is not leaked into hands get from Beijing officials.

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

But as talks with the Biden administration drag on, pressure on the company has arrived in waves from elsewhere. Congress, state legislatures, university campuses, and cities have passed or are considering rules to ban the app.

Now, TikTok is flipping its strategy for dealing with US officials. The new game plan: step out of the shadows.

“We changed our approach,” said Erich Andersen, general counsel of ByteDance, the Chinese owner of TikTok. He said the company had been “headfirst” in private talks with a Biden administration-led committee to review foreign investment in companies in the United States, but then the administration “paused” negotiations.

“Unfortunately, what we learned the hard way was that this fall we needed to accelerate our own declaration of what we were ready for and the level of commitments in the national security process,” Mr. Andersen said.

TikTok is at the center of a geopolitical and economic battle between the United States and China for technological leadership and national security. The outcome of TikTok’s negotiations with the US government could have far-reaching implications for tech and internet companies, affecting the free flow of digital data between countries.

For two years, TikTok has been in confidential talks with the government’s review body, the Committee on Foreign Investment in the United States (CFIUS), to answer questions about ByteDance’s relationship with the Chinese government and whether that connection could contain 100’s sensitive data Millions of US users in the hands of Beijing officials. The company understood those talks would soon result in a resolution after submitting a 90-page proposal to administration in August.

Under the proposal, called Project Texas, TikTok would remain owned by ByteDance. But it would take a number of steps, which it said would block the Chinese government from gaining access to data on US users and offer the US government oversight of the platform. Some of these steps have been implemented since October.

The company has proposed putting all US user data on domestic servers owned and operated by American software giant Oracle. 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 of the country.

The program proposes that CFIUS conduct regular audits of the new data system and create a new entity, TikTok US Data Security, with 2,500 engineers, security experts, and trust and security officers based in the United States with access to TikTok’s US user data for business functions. The unit would report to a CFIUS-assigned three-person board of directors. In addition, TikTok’s source code, which provides insight into why certain videos appear in users’ feeds, would be reviewed by Oracle and an external inspector.

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

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

However, the proposal has garnered little response from the panel, Mr Andersen said. TikTok said it had asked about the status of the panel’s review in numerous emails and received little response. Officials at the company only learned of the government’s thinking on the proposal through reporting, they said.

In a statement, a spokeswoman for the Treasury Department, CFIUS’s lead agency, said the body is “obligated to take all necessary actions within its authority to ensure U.S. national security.” She declined to comment on TikTok’s account of the negotiations, saying the panel doesn’t 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 technology lobby groups, such as 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 raised concerns. Senator Mark Warner, a Virginia Democrat and chairman of the Intelligence Committee, said the company has misrepresented how it protects US data from China-based employees and is considering billing a bill to ban the app in the United States .

On Tuesday, Senator Josh Hawley, a Republican from Missouri, introduced a bill to ban the app for all American users after successfully passing a bill in December banning the app on all federally-issued devices.

“Half a solution is no solution at all,” said Mr. Hawley, who is among a growing number of lawmakers who see no compromises in data storage and access as a solution to TikTok’s security risks.

But mounting pressures on the company have left it with few options other than to change its approach, say many outside experts.

“The issue has become public in a way they can’t ignore,” said Graham Webster, editor-in-chief of the DigiChina project at the Stanford University Cyber ​​Policy Center. “And this could be their way of pushing for the CFIUS agreement to actually go through, which is really their best shot at a sustainable business path in the United States.”

During a 24-hour visit to Washington last week, Mr. 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 outlined the promises at Project Texas in a presentation that included graphics of how the data will be stored in Oracle’s cloud and TikTok’s appointment of a content moderation committee and auditors.

They told the groups that the company has denied allegations that China is interfering in the deal, but that they built the system to show their commitment to security, people at the meetings said.

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

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

Mr Perault said, despite these efforts, “they can’t do anything without risk.”

“There is no way you can guarantee that the data won’t get to an adversary in some way,” he said.

As part of its more aggressive public relations offensive, TikTok invited journalists to Los Angeles this month to tour for the first time what it’s calling its “Transparency and Accountability Center,” a physical space showcasing how people and technology moderate videos on the platform .

In the past few days, TikTok and ByteDance have posted a half-dozen jobs in communications and politics in Washington. The new posts would be in addition to the 40 lobbyists the companies now have under contract or as employees. These lobbyists include four former members of Congress, including Trent Lott, the former Republican Senate Majority Leader, and John Breaux, a former Democratic Senator from Louisiana. The companies have also recently posted job openings for positions that will undertake strategic communications and guidelines for working with state and federal officials.

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

A spokeswoman for TikTok said the company’s lobbyists have had a hard time scheduling meetings with lawmakers who have criticized the company on TV appearances.

Representatives Mike Gallagher, a Wisconsin Republican, and Raja Krishnamoorthi, an Illinois Democrat, who are co-backers 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 was “taking a more aggressive stance in Washington,” but that the company has yet to meaningfully address some of its concerns, such as how it would respond to a Chinese media law that allowed the government to secretly solicit data from Chinese companies and citizens.

Mr Gallagher said he would like further information from CFIUS on ByteDance’s proposed ownership structure. “I’m a bit skeptical – I prefer a ban or a forced sale, but I’m more than willing to give due diligence to the technical aspects of such an agreement,” he said. And even then, he said, “where we have a lot of unanswered questions,” it’s about how the recommendation system works.

Mr Gallagher said new questions kept popping up too. He cited reports of ByteDance stalking journalists and Michael Beckerman, TikTok’s head of public policy for America, who struggled in a recent CNN interview, to questions about China’s treatment of Uyghurs, a Muslim minority in China’s Xinjiang region respond.

“What we’ve seen is a steady drip of negative information that challenges what they’ve said publicly,” Mr Gallagher said. “Seeing things like this, what else is there for me to conclude other than that ByteDance and TikTok are afraid of offending their overlords in Beijing? That doesn’t reassure people like me.”


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