Wait… Was That The TikTok Ban?

Summary

Summary of "Wait… Was That The TikTok Ban?"

Podcast Information:

• Title: The Journal
• Host/Author: The Wall Street Journal & Gimlet
• Description: The most important stories about money, business, and power. Hosted by Kate Linebaugh and Ryan Knutson, with Jessica Mendoza. The Journal is a co-production of Spotify and The Wall Street Journal.
• Episode: Wait… Was That The TikTok Ban?
• Release Date: January 21, 2025

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Introduction

In the episode titled "Wait… Was That The TikTok Ban?", hosts Ryan Knutson and an unnamed reporter delve into the tumultuous history of TikTok's attempts to secure its place in the United States amidst political turmoil and legislative challenges. The episode provides a comprehensive overview of the evolving landscape surrounding TikTok, highlighting key moments, legislative actions, and strategic maneuvers by both the company and political figures.

The Origins of the TikTok Ban Effort

Initial Ban Attempts Under President Trump (2020):

The discussion begins with the origins of the TikTok ban, tracing back to President Donald Trump's first term.

• At [00:05], Ryan Knutson introduces the scenario: "On Monday, just hours after he was sworn into office, President Donald Trump signed a stack of executive orders. One of them delayed enforcement of a ban on TikTok in the U.S."
• The unnamed reporter elaborates at [00:20]: "President signed an executive order to delay the ban on TikTok for 75 days," adding at [00:24] that this move was "in hopes of giving the app's Chinese owner enough time to sell off its US assets."

Ryan questions the continuity of Trump's stance, prompting the reporter to confirm at [00:38]: "Yes, the very same President Trump."

Rationale Behind the Ban:

At [02:17], the reporter explains that Trump's concerns were primarily twofold:

1. Data Security: "There was this concern that the Chinese government could lean on TikTok's parent company for US user data."
2. Propaganda: Potential manipulation of content to influence U.S. voter behavior and sow divisions, especially ahead of elections.

Ryan succinctly summarizes at [03:10]: "Basically, that the Chinese government could use the TikTok algorithm to push content that's more favorable to China or its worldviews."

Despite ByteDance's assurances at [03:19] that they would protect user data, the reporter notes the skepticism due to the nature of Chinese governmental influence ([03:27]).

Attempts to Mitigate Concerns: Project Texas

In response to the ban threats, TikTok launched Project Texas, aiming to address U.S. data security concerns.

• At [04:05], Ryan introduces the initiative: "TikTok implemented a plan known as Project Texas," which involved storing U.S. user data on servers owned by Oracle.

However, the unnamed reporter at [04:25] highlights the limitations:

• The TikTok algorithm development remained China-centric, necessitating some data flow back to China.
• Despite these efforts, U.S. officials remained unconvinced, stating that Project Texas did "not satisfy our concerns."

Renewed Pressure Amid Geopolitical Tensions (2023)

Impact of the Hamas-Israel Conflict:

The geopolitical landscape shifted in October 2023 when Hamas launched a surprise attack on Israel, which inadvertently intensified scrutiny on TikTok.

• The unnamed reporter explains at [05:05]: "Pro Palestinian videos on TikTok went viral, leading U.S. lawmakers to express concerns about content bias."
• Ryan questions the validity of these perceptions at [05:32], to which the reporter responds that "third party data scientists" found pro-Palestinian content received significantly more views than pro-Israel content, though there's no evidence of algorithmic manipulation ([05:39]).

Legislative Response:

This scenario galvanized lawmakers, particularly Republicans like Mike Gallagher, leading to the passage of a bipartisan bill mandating TikTok's divestiture or ban.

• At [06:31], Ryan notes: "That bill, which had overwhelming bipartisan support, sailed through Congress and was signed by then President Biden last April."
• The bill set a deadline for divestiture by January 19, 2025.

Trump's Shift and Ongoing Legal Battles

Trump's Changed Stance:

Despite his initial efforts to ban TikTok, Trump began signaling a potential shift in approach.

• At [06:56], the reporter points out that Trump warned banning TikTok would "only serve to help Meta," a company he had previously criticized.
• His meeting with Jeff Yaz of Susquehanna, a significant ByteDance investor, hinted at possible support for preserving TikTok ([06:56]-[07:21]).

Legal Challenges and Supreme Court Ruling:

TikTok, along with creators, contested the ban on First Amendment grounds, but the Supreme Court upheld the ban as of Friday before the podcast airing ([07:21]).

Biden Administration's Position:

As President Biden's term concluded, his administration signaled non-enforcement of the ban, leaving its implementation to the incoming Trump administration.

• At [07:21], Ryan summarizes: "Officials signaled that they didn't intend to enforce a ban... Trump said he'd like to give the company more time to find a solution."

Temporary Shutdown and Reinstatement of TikTok

Temporary Darkout:

On the brink of the January 19 deadline, TikTok experienced a temporary shutdown.

• At [08:15], the unnamed reporter explains legal liabilities: "The app still goes dark... because that's a level of legal liability that the companies don't want to face."
• However, within 14 hours, TikTok was reinstated after users rejoiced ([09:35]-[10:07]).

Reinstatement Message:

Upon returning, TikTok displayed a message crediting Trump's efforts: "As a result of President Trump's efforts, TikTok is back in the U.S." ([10:22]-[10:32]).

Current Status and Future Outlook

Executive Orders and Legal Ambiguities:

Trump's executive order granted TikTok an additional 75 days to comply with the divestiture mandate.

• The unnamed reporter at [11:02] states: "Legal experts say it's sort of unclear whether an executive order can... override this law."
• Ryan expresses confusion over the separation of powers and the executive branch's ability to counter legislative and judicial decisions ([11:16]-[11:36]).

Potential Solutions and Negotiations:

Trump proposed a 50-50 ownership split between U.S. and Chinese entities.

• At [11:45], Ryan reports: "Trump has said he wants TikTok to be owned 5050 between US and Chinese companies."
• Georgia Wells supports this view, suggesting it would make TikTok viable if the deal is signed ([11:50]-[12:11]).

Chinese Government's Stance:

The Chinese Foreign Ministry indicated flexibility, stating that any deal should be "decided by the companies on their own" ([12:36]).

Conclusion

As the episode wraps up, the hosts reflect on TikTok’s pivotal role in U.S.-China relations and its cultural significance.

• The unnamed reporter remarks at [13:57]: "TikTok has become too beloved by too many American teenagers and older people, too, for it just to disappear."
• Despite the current reprieve, uncertainty looms as negotiations continue, and the law remains enforced by statute, awaiting potential executive intervention.

Final Thoughts:

The episode underscores the complexity of balancing national security concerns with corporate interests and cultural phenomena. TikTok stands at the intersection of technology, politics, and international relations, making its future in the U.S. a barometer for broader U.S.-China dynamics.

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Additional Reporting: Elizabeth Woolman

For more episodes and merchandise, visit Wall Street Journal Shop.

Transcript

[Ryan Knudsen]

On Monday, just hours after he was sworn into office, President Donald Trump signed a stack of executive orders. One of them delayed enforcement of a ban on TikTok in the U.S. the.

[Unnamed Reporter]

President signed an executive order to delay the ban on TikTok for 75 days.

[Georgia Wells]

In hopes of giving the app's Chinese owner enough time to sell off its US assets.

[Ryan Knudsen]

Wasn't it President Trump who back in 2020 was the person who sort of kicked off this whole effort to ban TikTok in the first place?

[Unnamed Reporter]

Yes, the very same President Trump.

[Ryan Knudsen]

Our colleague Georgia Wells reports on TikTok.

[Unnamed Reporter]

This has been utter whiplash that Trump in his first term. The president who tried to ban or take away TikTok in this country is now the person who's spearheading an attempt to bring it back. So much so that in the push alert to users, TikTok thanks President Trump for his work on this.

[Ryan Knudsen]

So TikTok is still functioning. It's thanking President Trump. But is the story really over? Is it really actually saved now?

[Unnamed Reporter]

So this is a company that has been facing the prospect of a ban for years and seems to have potentially shifted the tide on this ban attempt, but it's not done. We are very much still in a wait and see. TikTok still has this law hanging over its head. It has a brief reprieve, but this is not done for TikTok.

[Ryan Knudsen]

Welcome to the Journal, our show about money, business, and power. I'm Ryan KNUDSEN. It's Tuesday, January 21st. Coming up on the show, the TikTok ban that wasn't. All right, let's go back in time for a second. Why did Donald Trump want to ban TikTok in the first place? When he first brought this up back.

[Unnamed Reporter]

In 2020, Trump was never that explicit publicly with what his rationale was. But people who worked with Trump on the span said that their concerns came down to two. There was this concern that the Chinese government could lean on TikTok's parent company for US user data. And so, for example, you could see the Chinese government having a list of people's interests or their contact list or who they interact with on TikTok. The other concern is propaganda. So US officials have been concerned that the Chinese government could lean on ByteDance to put their thumb on the scale for the content that's served to US Users. So you could, you know, imagine content that kind of encourages the divisions of US Voters ahead of a pivotal election or something like that.

[Ryan Knudsen]

Basically, that the Chinese government could use the TikTok algorithm to push content that's more favorable to China or its worldviews.

[Unnamed Reporter]

Yeah, that too.

[Ryan Knudsen]

TikTok's parent company, ByteDance, has said it would not comply with such requests from the Chinese government and that it protects user data.

[Unnamed Reporter]

It's a little bit of a tricky stance for a Chinese company or a company owned by a Chinese company to take though, because when the Chinese government asks companies for something, the Chinese government tends to get what it wants.

[Ryan Knudsen]

After calling out TikTok, Trump tried to use his presidential powers during his first term to bring the app under US control.

[Unnamed Reporter]

So he issued these executive orders about attempting to ban TikTok. And Trump also tried to orchestrate a U.S. deal to buy TikTok. His legal efforts just didn't stand up in court. And then any potential deals were thwarted by the Chinese government.

[Ryan Knudsen]

In an effort to head off concerns, TikTok implemented a plan known as Project Texas. The idea was that U.S. user data would be walled off by TikTok and stored on servers in the U.S. owned by Oracle, a U.S. tech company. And did Project Texas work in the way that it was envisioned?

[Unnamed Reporter]

So the algorithm that fuels TikTok is largely based or largely worked on and created in China. And so a certain amount of data continued to flow back to China in order to kind of provide some level of feedback for this algorithm. Then, since then, it came out that these issues were one of the factors that kind of were weighing on US officials who were considering this proposal at the time, as will Project Texas kind of satisfy our concerns? And for many of those officials, the answer was no.

[Ryan Knudsen]

And then when Hamas launched a surprise attack on Israel In October of 2023, the pressure on TikTok picked up again.

[Unnamed Reporter]

It suddenly mobilizes a chunk of US lawmakers who, while China national security concerns weren't necessarily top of mind, the US relationship with Israel was top of mind for many of them. And the reason this came up was because on the TikTok app, there were more pro Palestinian videos than pro Israel videos on the app. And many of the pro Palestinian videos went quite viral.

[Ryan Knudsen]

Is that a proven fact or was that just a feeling that some lawmakers had that there were more pro Palestinian views on the platform?

[Unnamed Reporter]

There were analyses that third party data scientists did that showed the views that these pro Palestinian videos were getting were receiving far, far more views than the views that the pro Israel videos were getting. There's no evidence that TikTok was putting their thumb on the scale to influence in any way the like ratio of Pro Palestinian vs Pro Israel content on the app. But this nonetheless Kind of activated a certain group of lawmakers in the US who hadn't really paid much attention to TikTok before. So after this moment, Republican Mike Gallagher and others in Congress really pushed through this law around forcing a divestiture of TikTok or a ban. So a divestiture would mean that ByteDance would need to sell TikTok or TikTok could not continue to operate.

[Ryan Knudsen]

That bill, which had overwhelming bipartisan support, sailed through Congress and was signed by then President Biden last April. It gave ByteDance a deadline for divestiture. January 19, 2025. Meanwhile, Trump started signaling that he had changed his mind about TikTok. He warned that banning it would only serve to help Meta, a company Trump had been critical of after it kicked him off Facebook.

[Unnamed Reporter]

And that timing was soon after he had met with Jeff Yaz of Susquehanna. Susquehanna is a major investor in ByteDance, TikTok's owner. So we don't know exactly what occurred in that meeting, but he left that meeting with this person who has a lot of money riding in ByteDance, and then says, we don't want TikTok going away.

[Ryan Knudsen]

Trump also joined TikTok this summer, and he has said it helped him win support among young voters. Regardless, the options for TikTok were dwindling. The Chinese government kept signaling that any deal was off the table. TikTok and a group of creators challenged the law on First Amendment grounds. But the Supreme Court ruled on Friday that the ban could go ahead. And then a twist. As Biden's presidency wound down, officials signaled that they didn't intend to enforce a ban. They said that it would be up to the Trump White House to implement the legislation. And Trump said he'd like to give the company more time to find a solution that would keep TikTok in the U.S. it was sort of like a game of chicken almost. Where it seemed like the US Government wanted to put maximum pressure out to try to get a deal done, here comes the deadline, the deal's not done yet. And all the politicians are kind of.

[Unnamed Reporter]

Like, right, when it takes time for someone to own this bipartisan law, no one's wanting to own it.

[Ryan Knudsen]

But on Saturday, a day before the January 19 deadline, TikTok shut down anyway. When TikTok users opened the app on Saturday afternoon, they got a message that said TikTok was no longer available. And the quote, we are fortunate that President Trump has indicated that he will work with us on a solution to reinstate TikTok once he takes office. Please stay tuned. If it seemed like The Biden administration was saying that they weren't going to enforce it. Trump was sending very strong signals that he also wanted to try to figure out a way to save the app. Why did TikTok go dark then, over the weekend? Temporarily.

[Unnamed Reporter]

So the law still remains on the books. And if you kind of try and get into the head of the general counsels at Oracle or at Apple or at Google, per the letter of the law, they could face fines of up to $5,000 a user a day for not being in compliance with this law. And so even though the Biden administration has said they're not going to enforce it, and Trump is sending all these signals, the app still goes dark, because that's just like, that's a level of legal liability that the companies don't want to face.

[Ryan Knudsen]

But then On Sunday, about 14 hours after it went away, TikTok was back. That's next. When TikTok came back online on Sunday, TikTok users rejoiced. TikTok is back, baby.

[Unnamed Reporter]

Woo. My goodness. This is so cool. I feel so grateful. I love you all so much, and I'm just excited to be posting again on TikTok. The doom scroll tonight will be legendary. I'm looking at three to four hours. Something slight. I don't want to go too crazy.

[Ryan Knudsen]

Because I don't want now. When users opened the app, they were greeted with a new message with another nod to Trump. It said, quote, as a result of President Trump's efforts, TikTok is back in.

[Unnamed Reporter]

The U.S. so we see TikTok, like, attempting to kind of hand Trump a political win in this moment in time. And it's unclear whether Trump's efforts right now will ultimately save TikTok in this country. But nonetheless, we see TikTok kind of casting him as this hero to their users.

[Ryan Knudsen]

But the drama still isn't over. Trump's executive order just gave the company more time to strike a deal, and it's still not available for download in the app stores.

[Unnamed Reporter]

So the executive order Trump signed kind of gives TikTok an additional 75 days before the enforcement of a ban. But legal experts say it's sort of unclear whether an executive order can, like, actually override this law.

[Ryan Knudsen]

Yeah, I mean, I'm honestly very confused about this. I mean, Congress overwhelmingly passes a law. It's challenged at the Supreme Court. The Supreme Court upholds it. How can then one person, the President of the United States, just sort of say, yeah, I know that two other branches of government have said this needs to happen, but I'm gonna try to make it not.

[Unnamed Reporter]

That's the big question. Legal experts right now who have spoken with are scratching their heads. So we're gonna have to see how this plays out.

[Ryan Knudsen]

Trump has said he wants TikTok to be owned 5050 between US and Chinese companies.

[Georgia Wells]

I think the US should be entitled to get half of TikTok, and congratulations, TikTok has a good partner. And that would be worth, you know, it could be $500 billion or something. It's crazy. The numbers are crazy, but it's worthless if I don't. If the President doesn't sign, then it's worthless.

[Unnamed Reporter]

Trump has said he'd want a 5050 kind of US China split for TikTok, which seems to be lowering the bar from what previously lawmakers had been asking for. It's kind of interesting because ByteDance is already 60% owned by global institutional investors like BlackRock and General Atlantic and Susquehanna. So the 5050 split for TikTok does not seem that hard.

[Ryan Knudsen]

Last week, the Chinese Foreign Ministry said that any deal should, quote, be decided by the companies on their own, indicating that the Chinese government might now be more open to a deal than it was in the past. So where. Where. What's going to happen next?

[Unnamed Reporter]

TikTok. More than any company I've ever covered, TikTok is the company where, like, if I could look into a crystal ball and see what's going to. And I'm, like, very impatient and very curious because I keep on getting whiplash, like, it's gonna get banned. It's not gonna get banned. Trump wants it banned now. He doesn't want it banned. Like, I don't know.

[Ryan Knudsen]

And right now it looks like it's gonna be saved, but, like, a deal of some sort still does need to happen. The can has just been very firmly kicked down the road, but it's still been kicked.

[Unnamed Reporter]

It looks like we've got the political momentum to achieve some sort of deal. This law is not going away, and so how are they gonna satisfy this law? And how is TikTok going to kind of work itself out of this one?

[Ryan Knudsen]

What do you think that this whole saga says about how important TikTok has become and also what the relationship is like at this moment between the US and China?

[Unnamed Reporter]

I mean, TikTok has been just, like, a fascinating way to view the U.S. china's relationship over the years? Like, there's been a company that's been more kind of successful, at least on, like, a consumer tech level, that's been caught in the crosshairs between these two countries. And like, it seems like we're at this moment in time, like you're saying where TikTok has become too beloved by too many American teenagers and older people, too, for it just to disappear.

[Ryan Knudsen]

That's all for today. Tuesday, January 21st. The Journal is a co production of Spotify and the Wall Street Journal. Additional reporting in this episode by Elizabeth Woolman. Thanks for listening. See you tomorrow.