November 28, 2023

WASHINGTON — TikTok CEO Shouzi Zhou met with several influential think tanks and public interest groups in Washington last week to share details of how his company plans to prevent the data of American users from leaving the country. Lobbyists for the company have flooded the offices of lawmakers who introduced bills to ban the app, telling them they can trust TikTok to protect information.

The popular Chinese video app TikTok has been a target of U.S. regulators for years, with both the Trump and Biden administrations weighing how to ensure that the information of Americans using the service does not fall into the hands of Beijing officials.

Throughout, the company has kept a low profile in Washington, keeping classified interactions with government officials secret and avoiding more typical lobbying tactics.

But as negotiations with the Biden administration dragged on, pressure from other quarters came flooding in. Congress, state lawmakers, college campuses and cities have passed or considered rules to outlaw the app.

Now, TikTok is upending its strategy for dealing with U.S. officials. New game plan: Out of the shadows.

“We’ve changed our approach,” said Erich Andersen, general counsel for TikTok’s Chinese owner, ByteDance. The company had been in private conversations with a committee under the Biden administration that reviews foreign investment in U.S. businesses, but then the administration “paused” talks, he said.

“Unfortunately, what we’ve learned the hard way is that this fall we need to expedite our interpretation of what we’re prepared to do and our level of commitment to the national security process,” Mr. Anderson said.

TikTok is at the center of a geopolitical and economic struggle between the United States and China over technological leadership and national security. The outcome of TikTok’s talks with the U.S. government could have wide-ranging implications for technology and internet companies, affecting how digital data flows freely between countries.

For two years, TikTok has been in secret talks with the government’s review panel, the Committee on Foreign Investment in the United States (CFIUS), to resolve questions about ByteDance’s ties to the Chinese government and whether the link could put together 100 percent of sensitive data. Millions of U.S. users fell into the hands of Beijing officials. The company believes those talks will lead to a resolution soon after submitting a 90-page proposal to the government in August.

Under the proposal, called Project Texas, TikTok would remain owned by ByteDance. But it will take a series of steps that it says will prevent the Chinese government from accessing the data of U.S. users and give the U.S. government oversight of the platform. Some of these measures have been in place since October.

The company proposed putting all U.S. user data on domestic servers owned and operated by U.S. software giant Oracle. The data will not be allowed to be transferred outside the United States, nor will ByteDance or TikTok employees have access to it while abroad.

The plan proposes regular audits of new data systems by CFIUS and the creation of a new division, TikTok US Data Security, with 2,500 engineers, security experts and trust and safety officers, all in the US, who would have access to TikTok US data Safety department. User data for business functions. The department will report to a three-person committee appointed by CFIUS. Additionally, TikTok’s source code provides insight into why certain videos appear in users’ feeds, which Oracle and third-party inspectors will review.

Some details of the proposal are The Wall Street Journal reported earlier.

“We knew that in order to earn trust, we had to build a system that provided unprecedented levels of security and transparency — and that’s what we’ve done and will continue to do,” Mr Chow said in an interview.

However, Mr Anderson said the proposal had received little response from the panel. TikTok said it had asked the group about the status of its review in multiple emails but had received few replies. Officials at the company could only learn about the government’s thinking on the proposal through news reports, they said.

A spokesman for the Treasury Department, the lead agency for CFIUS, said in a statement that the committee is “committed to taking all necessary actions within its remit to preserve the national security of the United States.” She declined to comment on TikTok’s characterization of the negotiations, saying the group does not comment on cases it may or may not be reviewing.

TikTok’s more aggressive lobbying stance won’t necessarily make a difference. The company has few allies in Washington. The most powerful tech lobbies, like the Progressive Chamber of Commerce and TechNet, prefer to represent U.S. companies and have policies against representing Chinese companies. In fact, many large tech companies, such as Meta, believe TikTok poses a security threat.

Lawmakers from both parties have expressed concern. Senator Mark Warner, a Democrat from Virginia who chairs the Intelligence Committee, said the company misrepresented how it protected U.S. data from Chinese employees and that he was considering a bill to outlaw the app in the United States.

On Tuesday, Sen. Josh Hawley, Republican of Missouri, introduced a bill to ban all U.S. The user uses the application.

“A half-finished solution is not a solution at all,” said Mr. Hawley, who is part of a growing number of lawmakers who don’t see compromises on data storage and access as the answer to TikTok’s security risks.

However, many outside experts say companies are under increasing pressure to have little choice but to change their practices.

“The problem has become public in a way that they can’t ignore,” said Graham Webster, editor-in-chief of the Digital China Project at Stanford University’s Cyber ​​Policy Center. “This is probably their way of pushing to actually get the CFIUS deal done, which really is their best chance of being on a sustainable business path in the United States.”

During a 24-hour visit to Washington last week, Zhou held four consecutive 90-minute meetings with think tanks such as New America, academia and public interest groups such as Public Knowledge. In a presentation at the company’s temporary WeWork suite near Capitol Hill, Mr. Chew and Mr. Andersen outlined the promise of the Texas project, complete with diagrams showing how data is stored in Oracle’s cloud and TikTok A content review committee and auditors were appointed.

They told the groups that the company dismissed allegations of Chinese interference in business, but that they had set up the system to demonstrate their commitment to security, according to people who attended the meeting.

“It seems like a serious effort,” said Matt Perrot, director of the University of North Carolina’s Center for Technology Policy, whose center received funding from TikTok, who attended a briefing.

The company appears to be trying to shift the discussion about it away from hypothetical risks and toward operational and technical solutions, he added. TikTok would spend $1.5 billion to develop its proposed plan, and then $1 billion a year thereafter. U.S. users may have a slightly worse experience using the app abroad because of the cost of running it on Oracle servers, company executives said.

Even with those efforts, Mr Perault said, “they can’t be zero risk.”

“They can’t guarantee that the data won’t somehow go to an adversary,” he said.

As part of its more aggressive PR offensive, TikTok invited reporters to Los Angeles this month for the first-ever tour of what it called its “Transparency and Accountability Center,” a physical space that showcases how humans and technology moderate video. the platform.

TikTok and ByteDance have posted six communications and policy job openings in Washington in recent days. The new jobs will add 40 lobbyists who are now contracts or employees of the companies. Those lobbyists include four former members of Congress, such as former Republican Senate Majority Leader Trent Lott and former Democratic Senator John Brooks of Louisiana. The firms also recently posted job openings for positions responsible for strategic communications and policy with state and federal officials.

ByteDance spent $4.2 million on federal lobbying in the first three quarters of 2022 and is expected to far exceed that figure this year.

A TikTok spokeswoman said the company’s lobbyists had a hard time arranging meetings with lawmakers who criticized the company on television.

Rep. Mike Gallagher, R-Wis., and Raja Krishnamurthy, D-Ill., co-sponsors of a bill to ban TikTok in Congress, said they plan to meet with the company soon.

But Mr Krishnamoorthi made clear he would not be easily persuaded to change his position. He said in an interview that TikTok has “taken a more aggressive stance in Washington,” but the company hasn’t really addressed some of his concerns, such as how it will respond to Chinese media laws that allow the government to secretly request data from Chinese companies and citizens. .

Mr. Gallagher said he would like more information from CFIUS on ByteDance’s proposed ownership structure. “I’m a bit skeptical – I’d prefer an injunction or forced sale, but I’m very willing to do my part to check the technical aspects of the arrangement,” he said. Even so, “a lot of the unanswered questions we have” revolve around how its recommendation system works, he said.

Mr Gallagher said new problems were also emerging. He pointed to reports about ByteDance’s stalking of reporters, as well as TikTok Americas head of public policy Michael Beckman’s efforts in a recent CNN interview to answer questions about China’s treatment of Uyghurs, a Muslim minority in China’s Xinjiang region.

“What we’re seeing is a steady stream of negative messages that call into question what they’re saying publicly,” Mr Gallagher said. “When I see something like this, what conclusion can I draw other than ByteDance and TikTok are afraid of offending their overlords in Beijing? It doesn’t reassure people like me.”

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