Is TikTok about to go full Maga?

0:00Emily Baker-White:This is The Guardian.

0:09Emily Baker-White:Today, is Trump seizing control of TikTok?

0:21Next, sir, we have an executive order on TikTok from the first days of your administration.

0:25Emily Baker-White:Donald Trump has signed a lot of executive orders in his time. This one, last week, you might have heard about. Giving his approval to the sale of one of the world's most popular apps, a$14 billion deal that could hand a huge chunk of TikTok's US arm from its Chinese owner to a group of American billionaires. A very good talk with President Xi. He gave us the go-ahead. You know, it's run by American investors. The White House says this is a victory after long-running security fears about TikTok and Chinese influence in the US. The thing that we wanted to accomplish is that we wanted to keep TikTok operating, but we also wanted to make sure that we protected Americans' data privacy as required by law, both because it's the right thing to do, but also because it's a legal requirement of the law that was passed last year by Congress.

1:17Emily Baker-White:But there are troubling questions. How this deal was done and who really wins out? Is this a sweetheart deal that hands one of the biggest platforms in the world to Trump's political allies and cements his grip on the media landscape? From The Guardian, I'm Lucy Hoff. Today in Focus, can Trump fulfil his wish of making TikTok 100 % MAGA?

1:46Emily Baker-White:Emily Baker-White, you're an investigative reporter and senior writer at Forbes, and you're the author of Every Screen on the Planet, The War Over TikTok. So let's start at the beginning. When and why did you first get interested in TikTok as a company? It was almost an accident. So I was a reporter at the time at BuzzFeed News, and our editor-in-chief, Mark Shufs, downloaded TikTok one weekend, and he thought, wow we should do more reporting on this and so I guess he went to the editor's meeting and said hey somebody should report more on TikTok and I just finished a story and I said sure I'll I'll take a whack at it I'll go talk to a bunch of people who work at TikTok and see what happens and TikTok had really exploded in popularity during the pandemic I'm a savage yeah classic bougie M M M M M to the B some to the B some to the B

2:38A lot of people were using it, but it was very light content, mostly on TikTok. It wasn't necessarily where you would turn for conversations about politics or science or what have you.

2:53Emily Baker-White:Well, we're talking just after the announcement of a deal for TikTok's sale. I mean, set the stage for us. So how big a platform has TikTok become in the US since you started reporting on it several years ago? And how central is it, would you say, to American culture and politics? I would say it's very central. So TikTok and ByteDance said at least a year ago now that at least 170 million Americans used the app. That is more people than voted in the last presidential election, I believe. One in five Americans are now turning to TikTok to consume news. That is a huge number of people more than any individual network.

3:31And so this is a platform that has a sort of immense power over the conversations that we have, the information that we see. And it's a pretty big political and geopolitical prize.

3:45Emily Baker-White:Talk to me about how this algorithm has been built and how powerful it is comparatively to other apps. When you open Facebook or Instagram or YouTube, you tell it a lot about what you want to see. You search in the search bar. You say, these are the people who I want to be my friends, whose content I want to see. You give the algorithms, you've expressed preferences about what you want. Yeah. When you open TikTok, it just happens to you. And TikTok is, from the moment you first open the app, trying to learn as much about you as it possibly can from your revealed preferences. It's not what you say you want, but what you're showing that you want.

4:24And that has proven over the course of its life to be an incredibly sticky, incredibly attractive algorithm. People talk about how the TikTok algorithm just gets me. It just knows me. But the TikTok algorithm is making a lot of inferences from your behavior. If you linger for two additional seconds on videos that have really, really attractive men in them, you might be attracted to men, right? And you're not telling it that you're attracted to men, but it's figured that out. And that's sort of how the TikTok algorithm brings you in. There are many more subtle things. Maybe you have an addiction problem and you're lingering on stuff about alcohol a little more than you should.

5:02It can figure that out.

5:08Emily Baker-White:Tell me more about this company, ByteDance, TikTok's parent company. Who are they and how did they build this global giant of a platform? So ByteDance is known as an app factory in China. It is one of the biggest Chinese tech giants. This is on the order of a Google, on the order of a Meta, certainly. It has one of the most important news aggregator apps in China. And when you're a Chinese tech giant, any Chinese tech giant, especially one that's serving news, you have a pretty intense relationship with the Chinese government because the Chinese government is so involved in censoring and sort of pushing out propaganda.

5:46It's not that ByteDance is particularly pro-CCP. In fact, I would say that ByteDance is more annoyed than most Chinese companies by the government. But it's sort of the cost of doing business when you are a Chinese company that you have to have those relationships. And so that is something that ByteDance has long had held around their neck as they try to do business around the world. And so I started reporting on TikTok, started talking to people at TikTok. and they told me about this project that the company was working on, secret project known as Project Texas, which was an effort to sort of segregate American users' data and keep it in a new safe place in the United States and sort of keep it safe from the rest of the company and from the Chinese parent company, ByteDance.

6:31The bottom line is this, American data stored on American soil by an American company overseen by American personnel.

6:45Emily Baker-White:So as you say, this is a platform that exploded in popularity during the pandemic. And in the last five years or so, TikTok's rise in the U.S. has become extremely contentious. Tell me more about that. Yeah, so from TikTok's earliest days in the United States, there was a group of people, Marco Rubio was very early to this, who said, hey, because ByDance is a Chinese company, TikTok poses a risk to our national security. Could the Chinese government, through its ownership of ByteDance, that owns ByteDance U.S., could they use TikTok to control data on millions of users? Yes. They're hoovering up all this data about our young people, and that data could later be used to blackmail those people or otherwise harm them.

7:30And they have control over what we see, and so they might be able to clandestinely seed propaganda into our apps, and we wouldn't necessarily know it if they did.

7:41Emily Baker-White:And how well founded are those fears? I think most national security experts across parties in the United States would tell you that the concern is real. The Chinese government has a long record of data mining and then using that data to harass especially dissidents, people who have family in the PRC who may be critical of the regime overseas. Like, we know that the PRC government does this, and we know that they do it in a way that can be really harmful to people when they have leverage over those people. One thing that's really important to note, though, is they didn't see evidence that the Chinese government was doing this in the United States.

8:18No one was saying they are doing this right now. They were saying, hey, there's no due process in China. The Chinese government can, you know, knock on a random engineer's door and say, you have to turn over this data right now. And so that became the worry. Not that we knew it had happened, but that it might happen at any moment or it might have happened already and we didn't know it.

8:37Emily Baker-White:So some undercurrents of some shady practices or at least a lack of transparency. This is something that you yourself encountered, wasn't it? Whilst writing the book, you were not spared from that type of surveillance. Are you able to talk about that? Yeah. So I broke the story of Project Texas, this internal project. I was then leaked a bunch of internal audio tapes by someone who had worked at the company. at this point the company is kind of freaking out because nobody has done this sort of investigative reporting about them yet and they really did have a startup mentality everybody's moving fast everything is chaotic over there and they're like oh my god what do we do about this yeah and so a team called the internal audit and risk control team right they were tasked with investigating leaks and they were like all right you know what we're gonna do we're gonna pull the data from this reporter's phone to see where she's going and then see if any of our employees were at those physical locations at the same time.

9:34And then we can see who's talking to her. And I want to be clear that this happened to me. It also happened to another reporter, Christina Criddle at the Financial Times, who had also done critical accountability reporting about the company. I get wind of this. Like I hear about it from sources inside the company. I write about it. I ultimately confirmed that it happened. Then the company says that I'm mistaken. They go out on Twitter and say that I'm wrong. But like, I don't know. I saw what I saw. People told me what they told me. And then they launched an internal investigation, which ultimately comes back and says, yes, OK, this did happen.

10:07We're going to fire all the people who were involved. We're going to make sure it never happens again. Historic admission from TikTok parent company ByteDance. The Chinese tech giant reveals some of its employees improperly accessed the TikTok user data of two journalists from the Financial Times and BuzzFeed. The fact that it had happened and the fact that some of the people who pulled the data were in China, honestly, the fact that it happened to me, probably the fact that it happened to Christina, like, we are not the nightmare targets here. The nightmare targets are people who do have family in China who the regime could actually harm.

10:44They're, you know, people who are working for Western militaries. Like, we have no evidence that the Chinese government had anything to do with this, what Byte Dance now calls the misguided effort. But the fact that it happened means that it could have happened in a much more malicious way, honestly.

11:10Emily Baker-White:I know this is quite a complex and long-running saga, but what have politicians in the US tried to do about these concerns over TikTok? There's been a lot of to-and-froing in the last few years, hasn't there? Yes. In his first term, President Trump decided he was going to ban TikTok. He didn't like it. There had been a group of young people who had trolled him by signing up to go to one of his rallies and then not attending the rally. Today, a bunch of teenagers across America are taking credit for the Tulsa political disaster. Using the Macarena dance to spread the word, thousands of them reserved tickets for the Tulsa rally with no intention of going.

11:50So it ended up empty and that offended him. And soon after that, he said, TikTok's a national security threat. We're going to ban it. We're looking at TikTok. We may be banning TikTok. He wasn't very careful in the way he went about trying to ban it. And so the courts said no. Then Trump leaves office. He has failed to ban TikTok the first time, but what's he going to do? President Biden comes in and his team says, yeah, we're not going to ban TikTok. We're going to negotiate with TikTok. The concerns are real, but banning isn't the answer. So the Biden administration spends two-ish years negotiating with TikTok.

12:23And eventually they come right back to where the Trump administration was, where like, this isn't going to work if ByteDance owns it. So the Biden administration says ByteDance, you have to sell it to a non-Chinese company or we're going to ban it. And TikTok kind of called their bluff and said, make me. And Congress then passed a law that said, you've got to sell this app or we're going to ban it. The lead on drafting some type of legislation, what she calls a targeted ban of TikTok. They're going to take a few weeks at least. TikTok and ByteDance challenged that up to the U.S. Supreme Court and the courts say no, what Congress did was OK.

12:59And at that moment, the saga should have been over. But it wasn't because President Trump gets reelected, comes back to power and says, actually, we're not going to ban TikTok. We don't need to ban TikTok. I'm going to negotiate a deal. So Trump tells his Department of Justice to ignore the law. Like under the law today, TikTok should be banned. But Trump has discretion about how to enforce those laws. And he says, nope, we're not going to enforce the law. We're going to ignore the law and do it my way.

13:28Emily Baker-White:Yeah, and it's notable how Trump has changed his mind on TikTok. He obviously saw its value on the campaign trail last year. I'm looking for a job and I've always wanted to work at McDonald's. I never did. I'm running against somebody that said she did, but it turned out to be a totally phony story. President Trump! And perhaps saw how useful it could be in terms of getting his message out to a younger audience. So since coming to office, Trump's been working on a deal not to ban TikTok, but to sell its US operations to American investors. And finally, we have the outlines of that deal agreed last week.

14:05Emily Baker-White:Emily, what exactly has been agreed? It's not clear. And it's not clear who exactly has agreed to what. I do want to be really, really clear to everybody that there's just a lot we don't know. What we do know is that the same proposal that TikTok and ByteDance made to the Biden administration looks a lot like what we're seeing from the Trump administration now. And the Biden administration ultimately didn't buy it. They said this isn't good enough. This isn't strong enough. But parts of that Project Texas proposal seem to be coming back in the deal that Trump has approved. So Trump says that this is a sale of TikTok's U.S.

14:43operations. But reporting has now shown us that it's a sale of some of TikTok's U.S. operations, but that ByteDance will retain control over other parts of it. Most importantly, ByteDance controls still this algorithm that is behind the For You page that determines what you see. And ByteDance is going to license that algorithm to the new U.S. version of TikTok. Software license can mean a lot of things. If this is a license where they hand over the code and TikTok US can do whatever they want with it, that might be okay. But there are a lot of software licenses where you're not allowed to change all the code.

15:16By chance will also retain control over advertising and e-commerce, which seem like pretty important key functions. And this is all still coming out. But I think those were ideas, too, that were sort of considered in this Project Texas plan. And Congress ultimately looked at that and said, yeah, that's not enough separation. We want more separation. And we just don't know how much functional separation between By Dance and new TikTok we're really going to get here yet.

15:46Emily Baker-White:What do we know about who the investors are from the U.S. side involved in this deal? One of the biggest characters set to take more control over U.S. TikTok is Larry Ellison of Oracle. Ellison has been a longtime supporter of President Trump. I believe he hosted a fundraiser in his house for the president at one point. Right. Oracle has been working with TikTok on Project Texas for years. So transferring some amount of control to Ellison is definitely part of the plan. He is an interesting character. He's a colorful character in Silicon Valley. Very competitive. You're competitive. Yeah. My original goal when I started Oracle was to build a company of 50 people.

16:26It got to be a little bigger than that. We have 150 ,000 people inside the company now. Where do you go from here? Well, we want to make sure we beat Amazon and Cloud Database. Ellison is also interesting because of his involvement in the Paramount merger. We've been talking about this Paramount Skydance, which is the merger of Paramount and Skydance. And now the CEO of Paramount is David Ellison. And he is now making a bid for Warner Brothers Discovery, which are two other corporations that have already merged. And the Ellison name has gone from a name associated with a relatively boring, stodgy cloud computing company to the world of media and news and information dissemination.

17:10And I think that is something to watch because if they do seek to play a larger role in what information we see and whose point of view we see, that is really important.

17:25Emily Baker-White:Yeah, because Larry Ellison is a big donor to Israel. He's a well-known supporter of Friends of the IDF. And Benjamin Netanyahu has even praised what this potential sale could mean for Israel in a press conference. We have to fight with the weapons that apply to the battlefields in which we're engaged. And the most important ones are the social media. And the most important purchase that is going on right now is... Tiktok. Tiktok. Number one. Number one. And I hope it goes through because it can be consequential. Who else has Trump brought in as possibly being part of this consortium? Trump has also mentioned bringing in the Murdochs of Fox News.

18:09A man named Lachlan is involved. Do you know who Lachlan is? That's a very unusual name, Lachlan Murdoch. Mr Murdoch. I believe. It's not clear what sort of stake or leadership role they would have, if any, but it's hard to think of anyone more sort of central to the conservative MAGA movement than the people in control of Fox News. There is also an Emirati firm that is reportedly involved, MGX, which is interesting because Trump has sort of hailed this as control will now be in the hands of American investors. And that sounds like it might partially be true, but what role exactly the Emirati firm will play as also an interesting wild card.

18:46Emily Baker-White:I mean, one of the striking aspects of the reporting of this deal is that the US arm of TikTok was valued at$14 billion, which seems quite a remarkable undervaluation, to say the least. I wonder what that tells us about the normalcy of this deal and the way in which it was carried out. Clearly, a lot of people are quite worried about how this has been done. Yeah, so there are a couple things going on there. First of all, Bloomberg reported recently that ByteDance stands to keep about half of the revenue that the TikTok US arm will make going forward through a series of licensing deals that offer them a revenue share.

19:24And if you only get half of the revenue that the thing you're buying makes, that definitely is going to notch that value down. And so that's one reason the valuation is lower. Another reason the valuation is lower is that this wasn't a normal free market sale. This was a forced sale. And it was a forced sale where Trump and the White House had to approve of the buyers and sort of curate who would be buying this thing. And if you had an open auction, someone might have bid more for it. But that person might not have been someone that Trump was keen on having.

20:00Emily Baker-White:Trump claimed that Xi Jinping, the Chinese president, had consented to the deal. I mean, from what you're saying, from ByteDance's perspective, there's a lot that they would have been very happy about in terms of what's been agreed. Xi Jinping wouldn't have approved it unless he thought it was ultimately good for him. And so I think that tells us something. And the more we're learning about the deal, the more we're learning that it sounds not dissimilar to what ByteDance was pitching in the first place and what ByteDance had been pitching for years, which is not a full severance between TikTok and ByteDance.

20:34I don't think Donald Trump is thinking about TikTok from a national security perspective. I think he's thinking about TikTok as he thinks about a lot of things, assessing it based on how good it is for him.