TikTok gears up for its big day in Congress


CEO Shou Zi Chew says the company will never share U.S. user data with China

As the Biden administration escalates its threats against TikTok, the company is preparing for its chief executive’s first appearance before Congress. Given recent gestures from the White House, lawmakers and federal law enforcement agencies, TikTok CEO Shou Zi Chew is in for a potentially harsh turn under the glare of the government’s big, bright lights.

In opening statements published before the hearing, Chew offered reassurances that the company would safeguard the safety of minors, bolster its privacy and security practices and ward off any possibility of “unauthorized foreign access” to U.S. user data.

“… I understand that there are concerns stemming from the inaccurate belief that TikTok’s corporate structure makes it beholden to the Chinese government or that it shares information about U.S. users with the Chinese government,” Chew said. “This is emphatically untrue.”

Chew asserted that TikTok has never shared data on U.S. users with the Chinese government nor has it ever received a request to do so. If China did request access to data on Americans, Chew argued that the company would not comply.

“Let me state this unequivocally: ByteDance is not an agent of China or any other country,” Chew said.

Prior to Thursday’s hearing, Chew took to the app to announce that TikTok now has more than 150 million users in the U.S., a sizable jump up from its last reported numbers. The milestone cuts both ways, underlining concerns about TikTok’s massive influence among Americans and serving as a threat that a U.S. ban would outrage users and creators alike. At least one group of creators is staging a protest of the proposed ban in Washington, D.C. this week, drawing attention to the negative impact it would have on their businesses.

The hearing, hosted by the now Republican-led House Energy and Commerce Committee, will be held on Thursday March 23 at 10 AM ET. Titled “TikTok: How Congress Can Safeguard American Data Privacy and Protect Children from Online Harms,” questions from lawmakers on both sides of the aisle are will span myriad criticisms of the company, from national security concerns over TikTok’s Chinese ownership to its impact on young users’ mental health.

“Americans deserve to know the extent to which their privacy is jeopardized and their data is manipulated by ByteDance-owned TikTok’s relationship with China,” Committee Chair Cathy McMorris Rodgers said. “What’s worse, we know Big Tech companies, like TikTok, use harmful algorithms to exploit children for profit and expose them to dangerous content online.”

The committee’s leadership also said that it intends to press Chew over measures that TikTok is taking to protect kids on the app, noting that the hearing is the latest effort to make tech companies accountable for their negative impacts on society. Lawmakers will likely push the hardest on worries that because TikTok parent company ByteDance is based in China with Chinese ownership that it could be leveraged by the Chinese government to further state interests.

While there’s no evidence that China is harvesting data on Americans or intentionally shaping political behavior through its algorithms, there is reason to be concerned that the company’s privacy practices aren’t airtight.

Last year an internal investigation at the company confirmed reporting that employees at its Beijing headquarters intended to track U.S. journalists via their TikTok activity in an effort to uncover the source of internal leaks. That incident apparently prompted probes from multiple federal agencies, which were first reported last week. The Fraud Section of the Justice Department’s Criminal Division is working with the FBI and the U.S. attorney for the Eastern District of Virginia to investigate the breach of user privacy, putting additional pressure on the company’s imperiled U.S. business.

TikTok has long pushed back over privacy concerns, arguing that TikTok’s American operations are walled off from its Beijing-based leadership — and from China itself. Earlier this month, reports surfaced that the U.S. government is currently seeking to force ByteDance to sell TikTok, threatening a national ban on the app if the company doesn’t comply.

TikTok responded by pointing to its recent campaign to self-regulate, an undertaking known as Project Texas. The campaign is part of an ongoing TikTok charm offensive in the U.S. that seeks to portray the company’s U.S. operations as transparent and comes with about $1.5 billion in infrastructure spending and corporate re-organization. The idea is that TikTok itself can erect a firewall between the company’s American business and its Chinese ownership, potentially placating the U.S. government in the process.

The U.S. doesn’t look likely to back down, but it’s far from clear it’s in a position to follow through on recent threats. The White House attempted a similar maneuver during the Trump White House, but its efforts fell apart before being picked back up by the Biden administration in an unusual show of policy continuity between the two. Former President Trump’s threats against TikTok eventually culminated in a plan to force ByteDance to sell its U.S. operations to Oracle in late 2020. At the time, TikTok also rejected an acquisition offer from Microsoft, but in time the deal with Oracle fizzled too.

Oracle never bought the company, but it’s still in the picture. TikTok later partnered with Oracle to shift U.S. data onto U.S.-based servers with the company and to run audits of its algorithms and content moderation systems — an odd move and an odd partner to do it with, given Oracle co-founder and chairman Larry Ellison’s participation in the campaign to undermine the legitimate results of the 2020 U.S. presidential election.

Given the stakes for the company and its users — and politicians’ penchant for rousing anti-China sentiment — Thursday’s TikTok hearing is likely to be explosive. Whether any new information will actually surface about TikTok and ByteDance’s operations and past privacy lapses remains to be seen, but we’ll be following along as Chew defends the company’s right to continue doing business in the U.S.

TECHCRUNCH