TikTok vs the U.S.A. | Trending Upwards | 1

0:07It's February 1st, 2023 in Washington, D.C. inside the Situation Room of the White House. United States Defense Secretary Lloyd Austin peers at satellite footage showing a small white dot flying over the state of Montana. It's a Chinese spy balloon equipped with surveillance equipment, and it can be programmed to fly over specific targets. Relations between the U.S. and China are already tense, and now China is brazenly violating U.S. airspace. Austin wants to know where the balloon is headed, An Army official grimaces and says that if it stays on its current trajectory, the balloon will fly directly over Malmstrom Air Force Base.

0:49There's a murmur around the room. Malmstrom is one of three sites in the U.S. that house the country's intercontinental ballistic missiles. These missiles can travel several thousand miles and are designed to deliver nuclear warheads. Intelligence about how these weapons are secured is not information the United States wants to get into the hands of a hostile nation. Austin asks how much time the Air Force would need to shoot the balloon down. An Air Force general says they can have F-22 fighter jets airborne in a matter of minutes, but shooting down the balloon comes with serious risks. The balloon is 200 feet tall, the size of three school buses.

1:31Shooting it down would create a debris field with a seven-mile radius, at a minimum. A lot of civilians could be hurt. Austin nods. Nevertheless, they need to be prepared to take quick action if the president deems it necessary. He wants flights at the airport in Billings grounded, and wants F-22 fighter jets scrambled, airborne, and ready to shoot the balloon down at a moment's notice. But he also wants them to come up with alternative plans. He orders someone from NASA to continue to look along the balloon's projected path and find the safest place to shoot it down. Austin stands and says he'll brief the president.

2:09But everyone needs to be on their toes. This is a clear breach of U.S. sovereignty by China. They need to be prepared for further action. The advisors in the room are also aware that they can shoot down as many balloons as they want. But millions of Americans have the digital version of a spy balloon on their phones and are voluntarily allowing the Chinese government into their lives. They call it TikTok. They wonder when the U.S. government is going to stop that Chinese threat.

2:47So, you just realized your business needed to hire someone yesterday. How can you find amazing candidates fast? Easy. Just use Indeed. See, when it comes to hiring, Indeed is all you need. Stop struggling to get your job posts seen on other job sites. Indeed's Sponsored Jobs help you stand out and hire fast. With Sponsored Jobs, your post jumps to the top of the page for your relevant candidates so you can reach the people you want faster. And that makes a huge difference. According to Indeed data, sponsored jobs posted directly on Indeed have 45 % more applications than non-sponsored jobs. Plus, with Indeed sponsored jobs, there aren't any monthly subscriptions, no long-term contracts.

3:36You only pay for results. How fast is Indeed? Well, in the minute I've been talking with you, 23 hires were made on Indeed, according to Indeed data worldwide. Look, there's no need to wait any longer. you can speed up your hiring right now with Indeed. And listeners of Business Wars will get a$75 sponsored job credit to get your jobs more visibility. That's at Indeed.com slash BW. Just go to Indeed.com slash BW right now and support our show by saying you heard about Indeed right here on Business Wars. That's Indeed.com slash BW. Terms and conditions apply. Hiring, indeed, is all you need. This message is brought to you by Apple Card.

4:24So, you left your wallet in the car. Or was it at home? No need to panic. With your iPhone, you can tap to pay using Apple Card with Apple Pay and earn unlimited daily cash back when you do. Apple Card is ready when you need it. Subject to credit approval, Apple Card issued by Goldman Sachs Bank USA, Salt Lake City Branch. Terms and more at AppleCard.com.

4:51From Wondery, I'm David Brown, and this is Business Wars.

5:21Since he was a child, Zhang Yiming has looked up to American entrepreneurs Bill Gates and Steve Jobs. In 2012, he founded a company called ByteDance. Within five years, the apps it developed were a huge hit in China. But Zhang wanted more. He wanted ByteDance to be a global success on the scale of Apple or Microsoft. It was an audacious goal. No Chinese-based app had ever found widespread success in the West. But in 2018, he found a way. ByteDance entered the U.S. market with a video-sharing app called TikTok. Zhang set Instagram, Facebook, and Snap in his sights, determined to make TikTok the top platform in the United States.

6:07But soon, TikTok was not just facing pushback from its business rivals, but from the United States government itself. In our new four-part series, we explore whether TikTok is a legitimate national security threat or a political pawn in a new Cold War. This is Episode 1, Trending Upwards.

6:35In July 2019, a YouTube executive stands in a ballroom at the Anaheim Convention Center. She sips a beer and taps her foot along with the beat of a song, played by a DJ in the center of the room as she looks around the room, bored. YouTube's party is usually one of the hottest parties at VidCon, an annual convention for influencers and online marketers. But this party feels stuffy and middle-aged, more like a party thrown by a pharmaceutical company than a hot platform. A brand manager sidles up next to her, munching on a salad in a plastic cup, Uh, no offense, but this party's kind of sad. Ugh, I feel ya.

7:17I hear TikTok's party is lit. Can you sneak out of here to come with me to check it out? I probably shouldn't. But as she says that, a caterer walks by with a tray of vegetable skewers. The executive shakes her head. This is not fun party food. To hell with it. Let's go. You gotta know what the competition is up to, right? Totally. The two of them head outside and catch an Uber to a bowling alley two miles away. As the car approaches their destination, they see a line snaking around the block. They're mostly young, under 25, and diverse. They're a mixture of punk and geeky, boy next door and bad boy.

8:00Almost all of them have their phones out. The executive looks at her friend, surprised. Are all of these people waiting to get into the TikTok party? The YouTube executive knew that ever since entering the market the year before, TikTok had been aggressively marketing itself. Ads were appearing across the major social media platforms like Facebook and Snap. In 2019, TikTok is reportedly spending$3 million per day on advertising. Users jokingly said they were feeling harassed by the relentless ads for the goofy video site. But the YouTube executive hadn't given TikTok much thought as genuine competition.

8:40She'd believe they were wasting money on all this advertising. For one, no Chinese app had ever truly taken hold in the West, and she and other executives had no reason to believe that TikTok would fare any better. For another reason, TikTok entered the U.S. market by purchasing an American app called Musical.ly that allowed users to share videos of themselves lip-syncing. Musical.ly had millions of users, but they were predominantly pre-teens. Young users are notoriously fickle and frequently abandoned apps. At the time that TikTok purchased it, Musical.ly's growth had stagnated. So the industry belief was that TikTok paid a lot of money for an app that gave them a built-in audience, but an audience that wasn't going to grow.

9:24But as she looks out at the line of people waiting to get into TikTok's party, she has to admit that it seems like TikTok's approach is working. And that notion only gets worse as she steps out of the car. Less than a minute after she's exited her Uber, a group of teens swarms past her and her friend and approaches a boy with floppy hair and glasses. They shriek that they love him and ask for his autograph. He happily obliges. As they walk down the line, groups of teens film choreographed dances. Others say hi to fellow creators and make promises to collaborate in the future. Others sing the song Old Town Road, which went viral on TikTok and launched the career of Lil Nas X.

10:07The brand manager spots a creator he recognizes in the line. He excuses himself and tells the YouTube executive he just wants to say hi real quick. He's a big fan of that creator's work. The YouTube executive nods. She's not even inside the party, but the scene out front is more lively and more engaged than anything she saw at the YouTube party. TikTok has energy and is commanding the zeitgeist. She used to think TikTok was a flash in the pan, but it's a major competitor. The YouTube executive isn't wrong. By 2019, users are leaving competitors like Facebook, and TikTok's growth is on the rise.

10:47But TikTok has a weakness that apps based out of Western countries don't. Duyin, the Chinese version of TikTok, is forced to abide by strict Chinese censorship laws. ByteDance claims that TikTok, the international version of the app, does not follow the same censorship guidelines as it does within China. But rumors circulate that TikTok's recommendation algorithm suppresses certain topics critical of the Chinese government. In September 2019, reporters at The Washington Post searched TikTok for the words Hong Kong. Widespread anti-China protests are taking place throughout the city, but the search results show almost nothing about the unrest.

11:29It seems highly unlikely that no one is posting about the demonstrations that have embroiled the region for months. And a few weeks later, a whistleblower leaks internal documents that prove that censorship suspicions are correct. And it's not just videos about the protests in Hong Kong that are being suppressed. The documents show that TikTok has instructed its moderators to restrict a wide swath of videos that discuss subjects critical of the Chinese government, no matter where the person is located. This includes videos about the 1989 Tiananmen Square massacre, when the government killed peaceful protesters, and also Tibetan independents from China.

12:11But it's not just topics the Chinese government objects to. Moderators are also instructed to restrict posts about independence movements more broadly, including Northern Ireland pushing to secede from England, and the Republic of Chechnya from Russia. The app is not deleting the videos, but setting them so that only the person who posted it can see it, not allowing the posts to be discovered by a broader audience. ByteDance puts out a statement claiming that the LEED guidelines show policies that were retired months before and that they represent the site's early attempts at content moderation.

12:47The goal, they argue, is not to censor, but to limit hate speech and misinformation. They say that they now use a more delicate touch, including hiring local moderators to implement policies that are appropriate in the country they're located in. But their statement does little to appease concerns. Critics are quick to argue that these documents prove that ByteDance, TikTok's parent company, is promoting the Chinese government's interests overseas. This isn't just a business venture by an ambitious Chinese entrepreneur. This is the Chinese government trying to exercise soft power over the American public.

13:25And the suspicion that these leaked documents foster gives TikTok's rivals like Facebook and Snap a powerful tool to wield against the app.

13:40In October 2019, Facebook's CEO, Mark Zuckerberg, appears at Georgetown University. He's been invited to speak about free speech in the era of social media and the line between content moderation and censorship. The co-founder of the Georgetown Technology Policy Initiative introduces Zuckerberg to a packed room. After outlining the challenges of overseeing a technology that is no longer a novelty, but a central part of millions of people's lives, she welcomes Zuckerberg to the dais. Zuckerberg is dressed in a plain black long-sleeved shirt. His light brown hair is cropped into a tight Julius Caesar cut.

14:19Despite being in his late 30s, he doesn't look much older than the college students filling the room. Once the applause dies down, Zuckerberg begins. He talks about how giving people a voice has been key to some of the most revolutionary moments in history and how Facebook is part of that tradition. You know, we see movements like Black Lives Matter and Me Too spread and go viral on Facebook. The hashtag Black Lives Matter was actually mentioned for the first time on Facebook. And this just wouldn't have been possible in the same way before. About three quarters of the way through his speech, he warns that this era of free speech may not last.

14:58A decade ago, almost all of the major Internet platforms were American. Today, six of the top ten are Chinese. And we're beginning to see this in social media, too. While our services, like WhatsApp, are used by protesters and activists everywhere due to strong encryption and privacy protections, on TikTok, the Chinese app growing quickly around the world, mentions of these same protests are censored, even here in the U.S. And then he pauses and asks the audience a simple question. Is that the Internet that we want? To the Americans who are flocking to TikTok, the answer seems to be yes. But the U.S.

15:40government isn't convinced.

16:02But that isn't just a number. It's experience that matters. It's 160 years of promises held, helping generations retire with confidence, protect their loved ones, and plan for whatever comes next. Whether you're looking for life insurance, employee benefits, or retirement income solutions, when your future is on the line, you want history on your side. And believe me, Pacific Life has been there, always there through changing times, always focused on your needs. Ready to secure your tomorrow? Ask a financial professional how Pacific Life can help you feel prepared for what's next. Pacific Life Insurance Company, Omaha, Nebraska, and in New York, Pacific Life & Annuity, Phoenix, Arizona.

16:43Because with Pacific Life, you're not just planning for the future, you're partnering with trusted experience. You hear it all the time on Business Wars, the battles between brands, the bold moves, the breakthroughs. But behind every winning business, there's something less talked about. Great IT. That's where Manage Engine comes in. Manage Engine offers a comprehensive suite of AI-powered IT management solutions that give you complete control over your IT operations. Your employees can collaborate securely. Your IT admins can easily monitor and manage devices. And you get full visibility of your data hygiene.

17:25Manage Engine also integrates well with most popular IT software programs out there. So, if you're a growing business or an organization looking for enterprise-grade IT management and cybersecurity solutions, visit manageengine.com to take control of your IT. That's www.m-a-n-a-g-e-e-n-g-i-n-e dot com.

18:04October 2019. While Facebook CEO Mark Zuckerberg is in Washington, D.C., he doesn't just give a speech at Georgetown University. He also meets with several lawmakers, including President Donald Trump. A top item on Zuckerberg's agenda during his meetings is to warn politicians about the danger of the rise of Chinese tech companies. In several of the meetings, he mentions that TikTok specifically is a threat. Shortly after Mark Zuckerberg's visit to D.C., several lawmakers on both sides of the aisle start expressing concern about TikTok. Late in October, Democratic Senator Chuck Schumer and Republican Senator Tom Cotton write a letter to the Director of National Intelligence urging him to investigate TikTok as a national security threat.

18:53They highlight both the app's data collection procedures and the company's censorship policies as potential issues. In response, TikTok posts an update to their company blog. They assure users that Americans' data is stored on servers located in the United States and that this data is not subject to Chinese law. They also reiterate that the Chinese government does not dictate what can and cannot be shown on the American app. According to TikTok, there is no threat to American national security. But on November 1, 2019, the Committee on Foreign Investment in the United States opens up an investigation into TikTok's acquisition of Musical.ly back in 2017.

19:38One of the committee's jobs is to assess whether the sale of a U.S.-based company to a foreign company endangers national security. If they deem that there is a credible threat, they could recommend that the president ban the app. But the committee's investigation takes time to complete. Meanwhile, the anti-TikTok sentiment amongst government officials is gaining steam. The United States Navy decides not to take any chances. They ban service members from installing the app on their phones. And on March 12, 2020, Republican Senators Josh Hawley and Rick Scott introduce a bill that would ban the app from any device issued by the United States government.

20:19But the next day, on March 13, President Trump issues a nationwide emergency due to the COVID-19 virus. And on March 15th, the New York City public school system shuts down, and the state of Ohio calls for restaurants and bars to close in an effort to contain the spread. In the wake of the COVID emergency, Senators Hawley and Scott table their bill. There are more pressing issues for the Senate to deal with. Soon, mandated lockdowns spread across the country. People pivot to working from home and attend school by Zoom. Sports events, concerts, and parties are all canceled. And the easiest way to entertain oneself while stock at home is by staring at a screen.

21:04TikTok's popularity explodes. The algorithm keeps a steady feed of amusing videos in front of viewers, and it also provides other opportunities to pass the time as a family. Teens rope their parents, grandparents, and siblings into making videos together. By the end of April, the app surpasses 2 billion users worldwide. Seeing the surge in popularity, TikTok hires 1 ,000 more U.S.-based staff members. And it's not just programmers and marketing experts.

21:41In spring 2020, TikTok's head of U.S. policy, Michael Beckerman, logs on to Zoom. Beckerman was brought on in February with the express purpose of ramping up the company's lobbying efforts. They're on track to hire 15 new lobbyists, hoping their connections in Washington will help change the company's reputation among American politicians. and it's Beckerman's job to make sure each new hire understands how to pitch TikTok when talking to lawmakers. Beckerman checks the time and size. The lobbyist he's meeting with is late and Beckerman has a busy schedule. Finally, the computer dings and the lobbyist appears on screen.

22:22His hair is shaggy but neatly combed and he wears a jacket and tie. Beckerman gets right to the point. Bottom line, there's a lot of misinformation about TikTok floating around Washington. It's our job to correct it. And some of that misinformation is about how connected it is to China? Absolutely. When you go into these meetings, you want to emphasize that TikTok has an American CEO. And many of the people in leadership roles in key areas like safety and security are based in the United States. The lobbyist jots notes down on a legal pad. Got it. and if they bring up the concerns that American data could be provided to the Chinese government.

23:00How do you want me to counter that? Well, first make clear that American data is stored on American servers and that the Chinese government has never asked TikTok to turn over data, but also emphasized that TikTok is an entertainment app. The most popular videos are made by a teenager in Connecticut who likes to dance in her living room. This is not an app used by people generally targeted for government surveillance. I wonder if we should really lean into that. Unlike other social media platforms, TikTok is fun. It's uplifting. We could share videos of people talking about Tiger King. Yeah, I love it.

23:37Okay, so here's your talking points. TikTok is American, it's fun, and most importantly, it's harmless. Okay, I think I'm all set. I'll let you know how my first round of meetings on the Hill goes and what kind of feedback I'm getting. Beckerman thanks the lobbyist and logs off. He has a good feeling about the angle of pitching TikTok. With the COVID pandemic raging, America needs TikTok. But soon, the tenor of what's going viral on TikTok changes.

24:10I can't breathe! I can't breathe! I can't breathe! In late May 2020, George Floyd, a 46-year-old black man, is murdered by a white police officer in Minneapolis, Minnesota. him. Floyd's death kicks off a wave of protests around the country. People march against police brutality and demand the officers responsible for Floyd's death are held accountable. The hashtag Black Lives Matter trends on TikTok, garnering 4.9 billion views. Videos pour in of people calling for change and mourning Floyd's death. White people, this is your daily reminder that as long as you stay silent, you are a part of the problem.

24:53I don't know how we break free from this system, but we can't forget those who died because of it. We are doing this for justice of George Floyd and all black matters. TikTok publicly supports the trend. General Manager Vanessa Pappas gives a statement acknowledging the pain and anguish being expressed on the app. She says that now more than ever, TikTok stands with its black community. Some see the statement as clearly intended to distance the TikTok up today from the TikTok that was caught censoring posts about independence movements last year. Later in June, President Donald Trump announces that he's going to hold his first in-person campaign rally since the COVID lockdown started in March.

25:40It will be held on June 19th in Tulsa, Oklahoma. There is immediate uproar. Known as Juneteenth, June 19th is the anniversary of when the Emancipation Proclamation was enforced in Texas, officially ending slavery in the United States. And in 1921, a white mob enacted a race massacre, killing hundreds of black residents in Tulsa. For Donald Trump to hold a rally in that city on that day, while the country is still reeling from George Floyd's death, feels deliberately incendiary to some, and TikTok users take to the app to express their outrage.