Roundup: TikTok bans are about economic power, not security

Stay to the end for a reflection on the inequity of entrepreneurship

Roundup: TikTok bans are about economic power, not security

I hope you weren’t awaiting some GPT-4 thoughts this weekend, because I really couldn’t be bothered. If you do want something to read, find it down in the recommended section, but needless to say it’s always disappointing when the hype engine goes into overdrive and the critical voices get drowned out — something this industry is very good at. We’re in another phase of some people really wanting to believe in the Next Big Thing, but that doesn’t mean it’s going to be as transformative as they want us to believe.

Last week I was on my way to New Zealand, and unfortunately one of the first things I saw once I touched down in Auckland was a massive advert for Starlink! New Zealand recently had a devastating cyclone and public officials were giving the company a lot of free publicity as they responded. Some (right-wing, opposition) politicians even made the embarrassing move of tweeting at Elon Musk to request he send more Starlink kits, as though New Zealand isn’t a wealthy country that can surely respond to a natural disaster without begging the richest man in the world for a handout. Anyway, that’s just to say I imagine the ad is linked to all that.

Starlink advert with the slogan "High-speed internet available planetwide"
Advert for Starlink outside Auckland International Airport

Aside from the Starlink ad, I’m having a great time down here and will surely have more to share in a future Disconnect issue. This week I’m emailing you from Dunedin, in the southern part of the country. In fact, as this hits your inbox, I’ll be seeing some cute blue penguins — photos next week! Just a reminder I’ll be doing some more events over the next couple weeks if you’re down this way. I had a great first event in Auckland the other day with columnist Simon Wilson.

In this week’s issue, I’m digging into what’s behind all these TikTok bans and why we shouldn’t believe the justifications of our governments. Then, for paying subscribers, I question whether Apple’s planned mixed-reality headset will really show that Tim Cook can launch a new product line, and recommend a ton of great reads you might have missed this week.

If you’re not already signed up, make sure to do it now to read the full issue!

TikTok Bans Are a Joke

The TikTok bans continue to proliferate. After the US banned the app from government phones late last year, they’ve been spreading to many other countries, with the EU and Canada launching their own bans in February, followed this week by the UK and New Zealand. The bans are justified on the idea that TikTok could share data with the Chinese government, but I have to be quite frank: this is ridiculous.

These moves are all optics with little substance, aimed at showing how much Western governments are willing to drive a wedge between themselves and China instead of making any real difference to security or privacy. If they were really concerned about the security of government communications, particularly the governments other than the United States, they would also be banning other social media apps from state-issued devices, but they’re explicitly not doing that. The only target is a specific (and very popular) app from a Chinese company.

It’s possible governments are not going after other social media apps because they know how pointless their TikTok bans are in the first place, other than to generate headlines that signal they’re being tough on China and adopting policies that will keep the United States happy. As journalist Shoshana Wodinsky explained a few years ago when the prospect of banning TikTok entirely was first raised, the truth is that if the big scary government in China really wanted your data, they have plenty of other (easier) ways of getting it without causing problems for TikTok and its owner ByteDance.

In the article, Wodinsky detailed how the digital advertising ecosystem that all these apps are hooked up to — and many besides — makes controlling data effectively impossible, because as soon as one of those data intermediaries is involved, the idea that you’re going to be able to keep data within particular national boundaries is very difficult to realize because of how these networks have been constructed — and pulling one app out of the equation doesn’t change that.

The entire clusterfuck of digital dollars that fuels our internet has essentially flattened state lines by promising people that they can tap into any consumer, anywhere they want—for a price.

The layers of intermediary partners mean that even if TikTok (or Google, or any other major tech player) swears up and down that it keeps any user data here in the U.S., that point is mostly moot. As soon as a foreign intermediary gets its hands on the data, any liability—or really, any control—is largely out of a U.S.-based company’s hands. […]

So, summing it all up, this means that when you open your phone to, say, Facebook, or Twitter, or YouTube, and see an ad that Adtiger (or any of its intermediaries) helped plop onto your screen, this is pretty much the basic path your data might go down—only multiplied by about 50 or 100, or by however many of these companies there are, and there are many. The wonderful world of digital advertising is built on black boxes inside of black boxes inside of black boxes. This means that there’s a good chunk of people who work at these companies who likely can’t tell you exactly where your name, your phone number, your precise location, or other personal data might actually end up.

Given this reality, it becomes very clear very fast that these TikTok bans are effectively useless, especially as TikTok has an agreement with Oracle to store its US data and is now planning additional data centers in Norway and Ireland to show the European Union it will keep data secure. Does that mean there will never be instances where some data may be accessed from China? Not at all, but the idea that TikTok is some nefarious player (at least in the data sense) where a caricature of Xi Jinping is pulling the strings behind the scenes is difficult to justify. It also ignores all the ways the apps we usually rely on mishandle our data all the time.

So, if these bans and the larger campaign against TikTok to scare consumers away from using it — including the latest suggestion that the Biden administration will force its Chinese owners to sell their stake in the company to avoid an outright ban — aren’t really about security, what is driving them? I honestly think it’s pretty simple.

Since the dawn of the internet era, the United States has been pushing the line that every company needed to allow unfettered access to the web, or else they were violating the rights of their citizens. Any country that dared limit access to the web was chastised for their supposedly authoritarian actions. The only permitted explanation for these actions was that governments wanted to restrict access to particular information — and in some cases that was certainly true — but it wasn’t always the case.

If you think about these approaches from an economic lens, we can make some pretty different conclusions. The US desire to have every country adopt an open web served its geopolitical and economic interests, similar to how it was already pushing them to drop their trade barriers in favor of free trade and unrestricted capital flows. The companies to gain an early foothold on the web were US companies, and the internet’s global expansion was great for their businesses. Today, most of the internet services we depend on are run by US companies — and the US government wants to keep it that way.

Meanwhile, there has long been an economic development model that saw countries put up tariffs and import restrictions so they could develop local industries, like Japan and South Korea did with electronics and automotive manufacturing. While there’s certainly an element of China’s Great Firewall that did restrict what information some Chinese people could access online, it’s wrong to only see it that way. It has also been an incredibly effectively economic development policy that allowed China to develop its own tech companies — including hardware and services — that now compete internationally with US and European competitors. If that wasn’t the case, the US wouldn’t have been so forcefully targeting so many aspects of China’s tech industry over the past few years.

Now, after decades of saying that every country had to allow unfettered access to virtually anything online, the United States is shifting its position. Everyone should still be able to access services from Western countries, but their Chinese competitors who are now challenging them in a growing number of tech domains are being restricted. Under the Trump administration, this was called the “Clean Network” (as opposed to the “dirty” one, I guess). Governments might claim this is all about national security, but it seems pretty clear the motivation is actually about maintaining technological supremacy and ensuring that US tech companies continue to dominate well into the future.