On August 2nd of last year, TikTok celebrated its first birthday. To mark the occasion, I wrote about the four biggest risks facing the company. One was finding new customers. Two was continuing to develop compelling new features. Three was attracting top influencers. And four was managing its relationship with regulators.
The big news over the past few weeks has been that TikTok, due to reasons largely outside its control, ultimately failed at the fourth task. President Trump has ordered that the Chinese company ByteDance divest TikTok, transferring all of its assets to an American company. And on Monday, TikTok sued the Trump administration. Here are Mike Isaac and Ana Swanson in the New York Times:
TikTok sued the U.S. government on Monday, accusing the Trump administration of depriving it of due process when President Trump used his emergency economic powers to issue an executive order that will block the app from operating in the country. [...]
“We do not take suing the government lightly; however, we feel we have no choice but to take action to protect our rights, and the rights of our community and employees,” the company said in its suit. “Our more than 1,500 employees across the U.S. pour their hearts into building this platform every day,” the company said, noting that it planned to hire more than 10,000 more workers across eight states in the coming years.
Two things about the TikTok case appear to be true at the same time. One is that it really is unclear whether TikTok was afforded due process before Trump decided to ban it. His initial action took the form of executive order, and like many Trump executive orders it was hastily written and offered no evidence supporting its claims. The Council on Foreign Investment in the United States did conduct a separate, year-long investigation, but it unfolded in secret, and no report was ever made public.
But two is that even if you find Trump’s actions here disturbing, most experts who have weighed in so far have suggested that the president’s action was probably legal. Courts generally give presidents wide latitude at the mere mention of national security, and there is a legitimate national security case to be made against a dominant American social platform being Chinese-owned.
All of that raises the question: why sue? Isn’t the outcome foreordained? Not necessarily. It seems like a long shot, but a court could theoretically block Trump’s executive order. Short of that, it could grant ByteDance more time to divest the company — which it might need, given the sheer technical complexity of unwinding TikTok from the mothership. As for CFIUS, there are very limited options for contesting the council’s decisions; so far, ByteDance has not said whether it will try. In the meantime, TikTok continues to negotiate a sale with its investors, a source familiar with the matter told me.
While the legal case proceeds, it’s worth noting how effectively TikTok did manage the first three risks I laid out last year. The company underlined its outsized success in its legal filing today. Alex Sherman recapped some of the highlights at CNBC:
In the filing, TikTok revealed its monthly active users have grown nearly 800% since Jan. 2018, when the application was used by about 11 million Americans. About a year later, that figure had more than doubled to about 27 million. By June 2020, months into pandemic quarantines, TikTok’s total number of U.S. month active users had soared to more than 91 million. More than 100 million Americans are monthly active users today, the company said earlier this month. The company also revealed it has more than 50 million daily U.S. users.
Find new customers? Check — it has exploded in popularity, particularly during quarantine. Develop exciting new features? Check: the company outpaced all its rivals in releasing popular new creative effects. Attract top influencers? Check: every day a new hype house seems to open somewhere in Los Angeles, and several may turn into reality shows. From a product and management standpoint, TikTok navigated the past year almost flawlessly. I can’t help but wonder whether, if Trump successfully cleaves it from its parent company, the remnants of TikTok will retain all of the elements that have made the company so successful to date.
Elsewhere, was the hidden hand behind Trump’s executive order ... Facebook CEO Mark Zuckerberg? That’s the (somewhat faint) suggestion in this Wall Street Journal piece on Zuckerberg’s Washington lobbying last year, which focused on the importance of American tech companies in projecting soft power around the world. Zuckerberg has been publicly critical of ByteDance’s restrictive speech policies, so that part tracks. But as the story goes on to acknowledge, and as I first reported here, Zuckerberg has told employees that he is disturbed by the precedent that Trump’s attempted TikTok ban has set.
My read here is that Zuckerberg was promoting the idea that a big, antitrust-proof Facebook was in the national interest. For this purpose, TikTok has been an occasionally useful foil. But Facebook would much rather live in a world where it has to compete with TikTok than one where a social network can be banned whenever it displeases the ruling party of one country or another.
To wit: Reuters reported on Monday that Facebook had blocked access to a group with 1 million members dedicated to discussing the king of Thailand after the government there said the group hosted defamatory posts. That ban, which Facebook surely imposed against its will, contradicts the company’s oft-stated mission of giving people a voice. But enforcement like this is now the price of admission for companies on a rapidly splintering internet. If there’s one obvious lesson to be learned from TikTok’s fate in America, is that’s Facebook and its peers have to manage their relationship with regulators, too.
Today in news that could affect public perception of the big tech platforms.
🔽 Trending down: Uploads of a sequel to “Plandemic” racked up well over 100,000 combined views on YouTube, despite the company’s efforts to remove copies of the film for violating its coronavirus misinformation rules. (Alex Kaplan / Media Matters)
🔽 Trending down: A smear campaign linked to the Cambodian government went viral on Facebook, sending a Buddhist monk into exile to protect himself. His downfall shows how repressive governments can weaponize social media to disgrace their opponents with stunning speed. (Hannah Beech and Sun Narin / The New York Times)
⭐ Facebook is preparing for the possibility of Trump using the platform to contest the results of the 2020 election in the United States. One strategy could be shutting off political ads on the platform after the election, since that type of content isn’t fact-checked. Here’s Mike Isaac and Sheera Frenkel at The New York Times:
In recent weeks, Mr. Trump, who uses social media as a megaphone, has sharpened his comments about the election. He has questioned the legitimacy of mail-in voting, suggested that people’s mail-in ballots would not be counted and avoided answering whether he would step down if he lost.
Alex Stamos, director of Stanford University’s Internet Observatory and a former Facebook executive, said Facebook, Twitter and YouTube faced a singular situation where they “have to potentially treat the president as a bad actor” who could undermine the democratic process.
Facebook’s approach here ignores the fact that ads are not the major vector of misinformation, argues this author. The most successful content promoted by Russian Internet Research Agency operatives in 2016 spread organically. (Nina Jankowicz / Wired)
A prominent Washington-based conservative advocacy organization is running a deceptive ad campaign on Facebook, stoking fears about mail-in voting. Some of the ads feature an image of LeBron James and misconstrue a quote from the basketball star. (Isaac Stanley-Becker / The Washington Post)
A parliamentary panel in India will question Facebook on how it regulates content in the country. The news comes in the wake of a Wall Street Journal article which found that Facebook executive Ankhi Das opposed applying hate-speech rules to some Hindu nationalists. (Aditya Kalra and Nigam Prusty / Reuters)
The Facebook executive, Ankhi Das, apologized to Muslims employees for sharing a post on her Facebook page that called India’s Muslims a “degenerate community” for whom “nothing except purity of religion and implementation of Shariah matter.” (Pranav Dixit / BuzzFeed)
Facebook has consistently courted right-wing nationalists in India at the expense of removing hate speech from the platform, this piece argues. The country, with its more than 290 million users, is a critical market for the tech giant. (Rana Ayyub / The Washington Post)
Facebook shut down the pages of antifascist and anti-capitalist organizing groups as part of an expansion of its “Dangerous Individuals and Organizations policy.” The move follows a pattern established by the Trump administration that draws false equivalences between organized, racist fascists, and the antifascists who oppose them. (Natasha Lennard / The Intercept)
Content moderation on platforms like Facebook and Twitter is particularly hard in African countries. A 2019 study from the Oxford Internet Institute showed governments in Angola, Egypt, Eritrea, Ethiopia, Rwanda, Sudan, and Zimbabwe have started deploying information-control tactics to suppress, discredit, or drown out dissent on social platforms. (Tomiwa Ilori / Slate)
Facebook asked the Federal Trade Commission for clear guidance on how to comply with new “data portability” laws without violating user privacy. The laws allow consumers in Europe and California to collect and move their personal data to new websites. (Sarah Frier / Bloomberg)
Facebook’s French subsidiary agreed to pay more than $118 million in back taxes after a ten-year audit of its accounts by French authorities. France has said the big tech companies pay too little tax in the country where they have significant sales. (Mathieu Rosemain / Reuters)
QAnon supporters are organizing “Save The Children” rallies on Facebook, bringing the conspiracy theory from the fringes of the internet to dozens of cities. The movement has gone mainstream, and has benefited from credulous coverage by local TV news stations covering the protests. (Brandy Zadrozny and Ben Collins / NBC)
TikTok has a long way to go to crack down on hate speech on the platform. A study by Mediabrands found that the app ranked the lowest in media responsibility out of all social-media platforms, including YouTube, Twitter and Facebook. (Renata S Geraldo / Bloomberg)
Russian government-supported organizations are playing a small but increasing role amplifying conspiracy theories promoted by QAnon. Academics who study the movement say there were no signs Russia had a hand in the early days of the conspiracy theory. (Joseph Menn / Reuters)
Startups and other smaller businesses are using antitrust lawsuits to try and rein in Big Tech. Some feel government agencies are moving too slow with their investigations. (Reed Albergotti and Jay Greene / The Washington Post)
Epic Games filed a new motion in its lawsuit against Apple, claiming the tech giant is threatening an entire ecosystem of game developers. The motion centers on iOS support for the Unreal Engine, which Apple has threatened to revoke as part of Epic’s broader loss of developer privileges. (Kim Lyons and Russell Brandom / The Verge)
The Trump administration has been reaching out to tech companies including Apple to reassure them that they can still do business with WeChat. The move comes two weeks after President Trump ordered a US ban on the Chinese-owned service. (Jennifer Jacobs, Saleha Mohsin and Jenny Leonard / Bloomberg)
Apple proposed new measures to address antitrust concerns in South Korea, including $84.02 million in grants for small businesses. Apple Korea has been under investigation by the Korea Fair Trade Commission over allegations it abused its dominant position by forcing mobile carriers to pay for advertising and warranty repairs. (Reuters)
Some 13,500 tech workers at companies like Facebook, Google, Netflix and Disney are volunteering their time to help down-ballot Democratic candidates in competitive state-level races. Tech for Campaigns is aimed at helping Democrats with digital tools and marketing. (Ashley Gold / Axios)
⭐ Scammers are using Facebook to target people in Kenya. BuzzFeed identified 52 scam loan and recruitment Facebook pages with more than 245,000 followers. Here’s Odanga Madung at BuzzFeed:
The scam pages falsely claim to belong to well-known banks, supermarkets, gas stations, and other companies known to give loans or recruit large numbers of people. They leverage the credibility of real brands to entrap people like Elizabeth into applying for fake loans or for nonexistent jobs that require real fees.
And these ads appear to be working. The Tuskys supermarket fraud, which asked for 350 Kenyan shillings in order to be short-listed for a job interview had 24,772 interactions. Another supermarket fraud, using the Naivas brand name, which requested 370 Kenyan shillings in order to be short-listed for a job as well, had 6,576 interactions, according to analytics data provided by CrowdTangle. In total, BuzzFeed News found 78,936 interactions from the 52 forms. Going by current engagement rates on Facebook, this means that the fraudsters could have reached millions of Kenyans with the help of the platform’s ad program.
Facebook’s “classic” experience, the interface with the iconic blue navigation bar at the top, is disappearing for good in September. Starting next month, everyone will have the new design. (Jon Porter / The Verge)
Facebook chief marketing officer Antonio Lucio is stepping down after two years. Lucio came to the company amid fallout from the Cambridge Analytica scandal. (Paige Leskin and Tanya Dua / Business Insider)
Gossip accounts like TikTokRoom are keeping pace with outlets like TMZ, documenting drama in the influencer community and sharing it on social media. Here’s an interview with the creators, both of whom are under the age of 20. (Kate Lindsay / NoFilter)
Current and former Google employees are forming an online school aimed at preparing students for the workforce if they’re taking time off school due to the coronavirus pandemic. Google executives have volunteered to mentor college students. (Jennifer Elias / CNBC)
The move to remote work has led to an uptick in workplace bullying, according to some experts. People are willing to talk to each other on Slack in a way they probably wouldn’t in person. (Chip Cutter and Aaron Tilley / The Wall Street Journal)
Zoom had widespread outages early this morning. Sadly, the service has now been restored. (James Vincent / The Verge)
⭐ Also: I talked to Alex Kantrowitz about why the backlash against tech journalists, covering Facebook, and why I love writing a newsletter. This transcript captures the flavor of the discussion, but I really recommend listening to the full podcast — it’s less than an hour long, and basically charts my entire worldview at the moment. Thanks to Alex for having me on and letting me talk at great length!