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--:-- Sean Rameswaram: You're listening to Today Explained. TikTok. You love it. Your grandma loves it. Your nephew loves it. Your dog's kind of into it. You know who's not into it? Congress.
--:-- Sean Rameswaram: The time to wait to secure the privacy of American citizens is long past. The federal government. We do have national security concerns, at least from the FBI's end, about TikTok. State governments. But just this month, more than a dozen Republican governors have moved to ban the app on government devices. Colleges. The crackdown on TikTok continues with Alabama's Auburn University now banning the video sharing app on campus, Wi-Fi and school devices. Other publicly funded universities are expected to soon take similar action. The movement to ban TikTok.
--:-- Sean Rameswaram: Ahead on Today Explained. Support for Today Explained comes from Saks Fifth Avenue. Fall is here. Might be time to find some nice new pieces you can wear again and again. With Saks Fifth Avenue, it can be a breeze to shop for your personal style, like maybe a relaxed Prada blazer or Gucci loafers that are great for both work and the weekend.
--:-- Sean Rameswaram: This is very Sean-coded. Gucci loafers. Saks says Saks makes shopping feel totally customized to you, whether that's from an in-store stylist or a visit to Saks.com, where they can show you just what you want to see. They say they'll even let you know when arrivals from your favorite designers are in or when something you've been eyeing is back in stock. You can find inspiration for your personal style every day at Saks Fifth Avenue.
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--:-- Sean Rameswaram: Alex Heath, deputy editor at The Verge. What is going on with TikTok right now? A bunch of people want to ban it, and no one really knows what's going to happen. And people have wanted to ban it for a while, but these calls are getting louder.
--:-- Alex Heath: That's right. This started really in the Trump administration. We may be banning TikTok. We may be doing some other things. There are a couple of options, but we are looking at a lot of alternatives with respect to TikTok.
--:-- Sean Rameswaram: Has since grown quite loud. The fact is, the algorithms to determine what you see on TikTok is determined out of Beijing by China. And the truth is, if you look at what Chinese kids are seeing on their version of TikTok, which emphasizes science and engineering versus what our kids and kids around the world are seeing, it is dramatically different.
--:-- Alex Heath: So both from a data collection and from, frankly, a propaganda tool, it is of huge concern. And now the CEO of TikTok, Shou Chu, is actually going to be testifying in Congress next month. So there's a lot going on.
--:-- Sean Rameswaram: You could kind of just throw a dart in the congressional halls and probably hit some member that wants it banned.
--:-- Alex Heath: I want to ban TikTok for a very simple reason. They allow the Chinese Communist Party to gain access to all of the private data on any device in America that's using TikTok. And that's a national security threat, but it's a direct threat to our way of life, our economics. It's allowed them to interfere in the midterm elections. This company should be banned. I don't know why they're allowed to operate in the United States.
--:-- Sean Rameswaram: The obligations of TikTok's parent company, ByteDance, under Chinese law, requires it at a moment's notice when Beijing asks for it, demands it, to share any data that it has. acquired on the site. And I think that that could force TikTok to surrender sensitive data from Americans.
--:-- Alex Heath: A bunch of states have banned TikTok on government phones. As of this week, five states, Texas, Maryland, South Dakota, South Carolina, and Nebraska, all with Republican governors, are banning TikTok from being used on state networks and devices. There's actually a federal ban as well. The Senate now passing a new GOP-led bill that would keep government devices from accessing TikTok.
--:-- Sean Rameswaram: This administration needs to force TikTok to put up a firewall to U.S. TikTok between itself and Beijing. And for different reasons, probably just because students spend too much time on it, you're starting to see TikTok banned at college universities across the country. Not allowed to post TikToks anymore. The University of Texas in Austin joining a growing list of schools blocking TikTok on campus Wi-Fi networks.
--:-- Alex Heath: We've all, you know, used college Wi-Fi and it's easy to get around. So I don't know if that ban necessarily means anything. But selfishly, every American tech company that competes with TikTok, you know, Meta, Facebook, Snap, Twitter, would probably secretly love for TikTok to be banned.
--:-- Sean Rameswaram: Right. It's always nice to have a competitor taken off the field. But at the same time, I think a lot of the American companies are worried about the precedent that a ban would set in terms of the government being able to kick companies out of the U.S. like that.
--:-- Alex Heath: The main concern is TikTok's parent company. It's called ByteDance, and it's this giant tech conglomerate based in Beijing that operates dozens and dozens of apps around the world. There's a Chinese version of TikTok that TikTok was based off of called Douyin that is huge, makes billions of dollars a year. And ByteDance controls TikTok effectively, right? So even though they have created a separate org and they're wanting to even further wall that off if the government allows them to and says that's enough to not get banned, it's an app that is controlled by a Chinese company.
--:-- Sean Rameswaram: And the concern is that if you're a Chinese company, you kind of have to do whatever the Chinese government tells you to do.
--:-- Alex Heath: We, the FBI, do have national security concerns about the app. So the idea of entrusting that much data, that much ability to shape content and engage in influence operations that much access to people devices in effect to that government is something that concerns us.
--:-- Sean Rameswaram: And so at the heart of that there really two concerns which is that one TikTok could be used to spy on Americans to harvest their data, their location, their preferences, what have you.
--:-- Alex Heath: And then on the other side, there's the fear that there could be some kind of pressure campaign from the Chinese government to manipulate what people see in their TikTok for you page.
--:-- Sean Rameswaram: TikTok is not unique anymore, but it was unique at the time when it broke out in the U.S. because of the way that its algorithm really dictates what you see. It's not really based on who you follow, like Facebook and Instagram and what we've traditionally been used to with social media. It gives them the ability to control the recommendation algorithm, which allows them to manipulate content and, if they want to, to use it for, you know, influence operations.
--:-- Alex Heath: And so the fear is that that powerful algorithm that now, you know, a billion-plus people around the world use a lot could somehow be manipulated in a way that could compromise American national security by the Chinese government.
--:-- Sean Rameswaram: And so those are the two main concerns. In that context, is this app any worse than the other social media apps we have and use? The ones that, you know, lead to deaths in Myanmar because of misinformation on Facebook or, you know, the one with the loudest man in the world sounding off and twisting the algorithm to suit his own ego? Is TikTok actually thus far worse or are we just waiting for it to one day be worse?
--:-- Alex Heath: It's not worse on the surface. I would say the only thing that's separate that I think, you know, the American tech leaders have a point in raising is that at least they're subject to U.S. jurisdiction and U.S. oversight. Right. And like they're U.S. companies. Right. So they're subject to U.S. law and TikTok is subject to Chinese law. And it's a very different dynamic.
--:-- Sean Rameswaram: And so, no, it's TikTok is not doing anything more nefarious than any other social media companies that we talk about that are based in America, but it's not an American company. And that's become the issue.
--:-- Alex Heath: And that's the thing that I'm not even sure anyone knows how to actually address still.
--:-- Sean Rameswaram: Let's just cut to the chase right here. Do we have any evidence to suggest that TikTok has ever done anything untowards with the massive amounts of data that this company has?
--:-- Alex Heath: Not really. And I say not really, but there was this one thing that happened last year where ByteDance actually admitted that TikTok employees who were based in the U.S., but still TikTok employees actually improperly accessed the location data of journalists who were covering the company for Forbes and the Financial Times.
--:-- Sean Rameswaram: What?
--:-- Alex Heath: Yeah. That sounds like a big one. Yeah, it's not good. We knew that a ByteDance team called the Internal Audit and Risk Control Department had tracked the specific location of individual U.S. citizens for a purpose that didn't have to do with advertising or sorting them content in the app.
--:-- Sean Rameswaram: We were the people who were being tracked.
--:-- Alex Heath: They're nice to you unless you happen to be saying nasty things about them?
--:-- Sean Rameswaram: Well, you know, they say this is part of a leak investigation. And, you know, to be perfectly frank, like this is common. You know, American companies do this to their employees if they suspect them of linking confidential information.
--:-- Alex Heath: But the issue is that TikTok's out there saying we would never spy on anyone, look at their data. And then this comes out in the middle of very heated negotiations with the government where senior officials in the U.S. government are becoming increasingly hawkish about TikTok. And it's really set them back and set them back in a way that could hurt their ability to operate long term in the U.S.
--:-- Sean Rameswaram: That's really the only public example that we've seen of data being improperly used. That's not to say it hasn't been used in other ways that we don't know about.
--:-- Alex Heath: And in terms of the other concern of manipulating the algorithm, we don't really have evidence of that either in a way that should be concerning for government officials.
--:-- Sean Rameswaram: So a lot of this is, frankly, politics. It's becoming increasingly trendy to be hawkish on China and Chinese companies in the U.S. and a lot of senators are just kind of piling on with each other.
--:-- Alex Heath: TikTok is not as innocent as it sounds. It is owned by a Chinese-based AI company called ByteDance. Just about every Chinese company like this is owned or controlled by the government. That's the way China works.
--:-- Sean Rameswaram: So when you go on TikTok, China has your data.
--:-- Alex Heath: Saying, you know, no, there are actual concerns here about American data, and China being able to potentially manipulate the algorithm, and we may need to just ban TikTok. And so the conversation was about a ban, and then when Trump left office, TikTok quickly changed it to, well, you don't need to totally ban us. What if we just wall things off in a way that ensures ByteDance, the Chinese parent company, can't meddle in TikTok in the U.S.? Is there a chance that that could actually ultimately lead to this wildly popular social media app getting banned in the United States?
--:-- Sean Rameswaram: I mean, never say never, but I would put the odds of a ban at being very low, even at this point. Merely because of the precedent it would set, TikTok would certainly challenge it in the courts. It's kind of unclear exactly how the government would legally do it.
--:-- Alex Heath: But I'm told, and you've done reporting on this, that if the government were to ban TikTok, they kind of got a backup plan. That's right. They have this thing they're working on called Project Texas.
--:-- Sean Rameswaram: Cue your doo-doo-doo-doo-doo music. And then I'll cue. I'll cue. After you cue that, I'll say something like, and unfortunately we have to take a break in the middle of our show, but we'll talk about it in a moment on Today Explained.
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--:-- Sean Rameswaram: Support for Today Explained comes from Built Rewards. These days, it seems like everybody has a rewards program. You swipe your card and you get one cent on the But with your rent frequently you just pay month after month You never get anything from it other than that roof over your head Not anymore says Built Rewards Built Rewards says it lets you earn points on your rent. By paying rent through Built, they say you can earn flexible points that can be redeemed toward hundreds of hotels and airlines, perhaps a future rent payment, your next Lyft ride, and so much more.
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--:-- Sean Rameswaram: Today Explained. We're back. Alex Heath, Deputy Editor, The Verge. And before we took a little break, Alex told us that TikTok has a plan in process just to make sure they don't get banned. And it's called Project Texas. What is it and why is it called Project Texas, Alex?
--:-- Alex Heath: Well, it's called Project Texas because that's where Oracle, the company that TikTok is trying to build this proposal with, is based. And it was also just an internal code name that leaked in reporting and they stuck with it because it also is American sounding, right? So Project Texas is this thing that I was invited to hear about at TikTok's headquarters actually recently in Los Angeles.
--:-- Sean Rameswaram: And we were brought into TikTok's office, which, you know, it looks like any other tech office, right? You've got like the fancy logo out front where you can take selfies, really nice conference rooms, et cetera.
--:-- Alex Heath: Did you take a selfie?
--:-- Sean Rameswaram: I did not take a selfie. Professional. I have evidence I was there, but I did not take a selfie.
--:-- Alex Heath: And we met with, you know, executives there and then they walked us around the corner to another building where they have this thing they're calling their transparency center. They talk about Project Texas and they show people, you know, a basic kind of 101 of how TikTok works. This is really designed for lawmakers to come in and get a crash course in TikTok.
--:-- Sean Rameswaram: Were there like portraits of Chairman Mao on the walls and stuff?
--:-- Alex Heath: Yeah. Well, it was interesting because, you know, TikTok is very much trying to distance itself from ByteDance because it doesn't want to be forced to totally spin off from ByteDance. So, you know, it uses language like, you know, we're an American company, you know, with American employees. We don't have any ties to China.
--:-- Sean Rameswaram: But then you're in the office and it's not even really that subtle. Like the Wi-Fi says ByteDance. ByteDance has its own version of Slack that they built for all their employees globally. And that's like on the conference room TVs, right? There's just all these reminders that TikTok is not its own entity, right?
--:-- Alex Heath: And so that's in my mind as I'm hearing these leaders from the company pitch this plan to be technically separate, but not fully separate. So the plan with Project Texas is to create a new entity in the U.S. for TikTok that is legally separate and separates all the code, importantly, from the rest of TikTok globally and ByteDance.
--:-- Sean Rameswaram: And there's a bunch of auditors that are brought in that are approved by the U.S. government. There's a separate board that reports to the U.S. government. And Oracle is the quote-unquote trusted partner that is reviewing all of TikTok's code that is literally recompiling the app and putting it in the App Store itself.
--:-- Alex Heath: So TikTok can't even be trusted to submit its own app to the App Store under this setup. And it really positions TikTok as like a defense contractor in terms of the compliance, the government oversight that they will have to go through to form this entity. It's very strange. It's frankly unprecedented for a company to propose something like this in the U.S.
--:-- Sean Rameswaram: TikTok says it's already spent over $1.5 billion trying to set up Project Texas, and it estimates it will cost it over like $700 million a year to operate. So this is not a trivial operation. And this is all designed to avoid the government trying to force a ban or an actual spinoff where a separate entity is created totally away from ByteDance.
--:-- Alex Heath: Because you got to think like, yeah, you know, all these employees for Project Texas and this new entity in the U.S., they will be under these really strict compliance regulations with the government. They're still ByteDance employees at the end of the day. Like they're compensated in ByteDance equity.
--:-- Sean Rameswaram: And I'm not technical enough to understand if this will actually assuage fears adequately in terms of like, can you do a line-by-line read of TikTok's code and somehow determine that the Chinese government is not asking for data or trying to influence how some engineer somewhere programs things to amplify certain content over others.
--:-- Alex Heath: It's unclear because no one has seen this, right? So when we walk into this transparency center, which, you know, I've done some of these tours before with tech companies and, you know, they're optics driven. So like you get in there and it's like a giant screen that you can touch. Like, here's how TikTok works.
--:-- Sean Rameswaram: And we can go in another room and then see a basic version of what it's like to be a content moderator for TikTok. So it's a way to like learn about the policies. Nothing like super revelatory that you couldn't learn from Googling, right?
--:-- Alex Heath: But behind this wall in a corner of this transparency center is this room we weren't allowed to go in as journalists. And TikTok says if you sign a non-disclosure agreement, put your phone in a locker, go through a metal detector and go in this room, there are servers that house the TikTok source code.
--:-- Sean Rameswaram: Hmm I find this very hard to believe.
--:-- Alex Heath: A lot of this is just we trusting TikTok at this point that this is how things are going to work. And the government isn really saying anything except with these really increasingly hawkish statements we're getting in the press and in hearings.
--:-- Sean Rameswaram: So do you think Project Texas will be enough to alleviate all the concerns at state governments, the federal government, federal agencies, college campuses?
--:-- Alex Heath: I don't know. And I don't think TikTok knows either. I think the reason they're doing this big press push, inviting people like me into the Transparency Center, having their CEO testify in Congress, is that they're partly just frustrated that negotiations with the government have drawn on for as long as they have and that the government seems to have changed its mind back and forth several times.
--:-- Sean Rameswaram: And they're also, I think, really doing the best they can kind of in the ninth inning to say like, look, we care. We're serious about this. Like you don't need to ban us. Like this is a really robust program that we think will alleviate all the concerns.
--:-- Alex Heath: And problem is like we have a pitch of what it is, but it hasn't really been exposed in a, I think like independent way, like how this program actually works. So we're kind of just waiting and seeing. And I think TikTok is too.
--:-- Sean Rameswaram: Their fate's kind of going to be decided by what this Committee for Foreign Investment in the United States, CFIUS, thinks here in the near term. It's not like if Project Texas gets totally turned on tomorrow, that there's not Chinese employees involved in the strategy and decision-making and maintaining of TikTok. That will still be the case.
--:-- Alex Heath: It will just be us trusting all these auditors and Oracle and all this to make sure that TikTok's not being manipulated. If you don't trust TikTok now, just wait till a billionaire is in charge and then you can trust it.
--:-- Sean Rameswaram: Well, a billionaire is already in charge, but it's just, you know, do you trust, you know, ByteDance or do you trust Larry Ellison? Right.
--:-- Alex Heath: So, yeah, I don't know. I don't, they don't really know either. And I think that's why they're doing this kind of last ditch press campaign.
--:-- Sean Rameswaram: Well, Alex, you've been inside the belly of the ByteDance. Did you feel more inclined to trust anything going on here having walked the walk?
--:-- Alex Heath: I gotta be honest. I just saw a lot of smoke and mirrors. I don't doubt that there are people working there who really eagerly want to fix the concerns and keep TikTok going. I don't think TikTok is incentivized as a for-profit entity to be subjugated to Chinese government influence or, you know, spying requests. Like it doesn't, it doesn't align with their incentives as a business, right?
--:-- Sean Rameswaram: But there's still that uncomfortable dilemma of they're still owned by a Chinese company at the end of the day. And even if Project Texas is approved, that's still going to be the case.
--:-- Alex Heath: And, you know, like I'm on this tour and I ask at one point, you know, what happens if an employee in China makes a request that's, you know, not documented, just like on the phone or something to an employee at the US entity of TikTok to do something? Like what's to keep that employee from saying no?
--:-- Sean Rameswaram: And I didn't get an answer. I was actually just told that wasn't appropriate for this Transparency Center tour.
--:-- Alex Heath: Wow. Please do not ask critical questions during your tour. During your transparency tour.
--:-- Sean Rameswaram: During your transparency tour.
--:-- Alex Heath: Well, there's so much of the optics here. Like the transparency tour, we weren't allowed to quote the people presenting directly or name them, which to me suggests that there's concern that people will say something that comes back to bite, you know, TikTok in the future.
--:-- Sean Rameswaram: Wow. Right. So, you know, it's when you have a Transparency Center tour that's on background, that's never really a good sign.
--:-- Alex Heath: It's unclear if the way Project Texas works will actually keep the Chinese government from manipulating anything. And I should say TikTok says, like, you know, we have never been asked by the Chinese government to do any of this. And even if they do ask, we would refuse. That kind of belies logic for a couple of reasons, mainly because, you know, from my, you know, talking to current and former TikTok employees, including some who have worked in Beijing.
--:-- Sean Rameswaram: It's not like it's not like they would necessarily even know if the Chinese government asked for something or it's not like that. It's not like, you know, in the U.S. where, you know, you need a subpoena or, you know, there's lawyers get involved. Like in China, it can just kind of happen.
--:-- Alex Heath: Right. It's just, there's really, you know, ByteDance's board has a Chinese government official on it, right? There's really no separation like we have in the U.S. And the idea that they would refuse it is kind of crazy to me. Because if you're looking at, like, potentially being jailed in China for refusing a government request, you're really not going to do it.
--:-- Sean Rameswaram: So, yeah, I don't know. There's just some really uncomfortable questions here. And TikTok's just been put in a really uncomfortable spot where they're trying to be this, you know, global slash American company while also having this tie to this very controversial Chinese company.
--:-- Sean Rameswaram: Alex Heath, Deputy Editor at The Verge. Find his work at TheVerge.com
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--:-- Sean Rameswaram: Our program today was produced by Hadi Mawajdeh. He had help from Matthew Collette, Laura Bullard, Patrick Boyd, Halima Shah and Paul Robert Mounsey. This is Today Explained. Thank you.
