U.S. opens a national security review of TikTok’s acquisition of Musical.ly (opens in new tab)

I've heard this myth that musical.ly was founded in China before, but it's hard to believe if you look at some basic facts.

One cofounder worked full time at SAP in SF bay area for several years before and after musical.ly was founded. The other says on his LinkedIn that he was working in Santa Monica for several years on either side of the founding. They lived, worked, and founded the company in CA.

"TikTok also says China does not have jurisdiction over content of the app, which does not operate in China and is not influenced by any foreign government."

If it's a Chinese company, why is TikTok saying that China has zero jurisdiction over the app?

Besides that, the US can require that Bytedance peel off TikTok / Musical.ly. If Bytedance wants access to the US market with that app, it will have to play by US rules. That works similar to how China blocked the Qualcomm - NXP acquisition. Neither Qualcomm nor NXP are Chinese companies. If the combined entity wanted access to China they had to obey China's position on that acquisition. And given China's extreme behavior on restricting US Internet companies from their market, this is more than fair game.

Well the Reuters article says it's a US company, as does https://www.crunchbase.com/organization/musical-ly.

It doesn't matter, just like china reviews acquisitions of American companies by American companies because they do business in china the US does the same.

US consumers become subject to Chinese censorship policies under services, media, and entertainment provided by US companies too.

I tried to find it but failed. Do you happen to remember the date it aired?

What’s the point here though?

America et al also don’t like certain things being published on social media and try stop it from existing on those platforms too.

Yet we got Lil Nas X out of it.

Their censorship algorithm must be broken.

I wonder too if say you tried to advertise on TikTok but your company was not complying with Chinese censorship requests, or you employed an outspoken advocate, or you employed some folks who posted something about Uyghurs on social media elsewhere ... what would TikTok's response be?

I mean, as a Canadian consumer using American social media platforms, we're subject to American censorship policies. Tumblr / Facebook / YouTube being most notable in their filtering of LGBT content and suspending accounts of LGBT users, because of the American governments stance on human sexuality. This argument of who censors makes sense for Americans, but it's more about picking your poison for people from other countries.

People need to be more skeptical about governments (both murican and chinese) and have more faith in fellow human beings. Why is it that US government gets it panties wet at the thought of Tiktok having influence in USA but somehow is proud of he fact that Google or Facebook are global companies ? What is that Tiktok would do to american that Google or Facebook won't do to Indians ?

Google and Facebook not being in China is not necessarily a bad thing. Both the companies are massively popular in India but make no profits off Indians yet. On other than their popularity has made Indians value these companies a lot as employers and every third Google/Facebook engineer in Mountain View is an Indian person. Google or Facebooks adventures in India (and China) if at all are nothing but a huge subsidy being delivered to these upcoming markets at the expense of American consumers.

Say China opens up its markets for Google and Facebook like tomorrow would you be fine with that ? Both Google and Facebook are then going to borrow money from american to build massive data center networks in China spending billions of dollars which may or may not be recovered in near future.

Xenophobia and divergence from free market principles in USA have made other countries better potential successors to Silicon Valley. In near future we will see more and more companies coming up from China. What USA has done with Tiktok is essentially a child like tantrum to scare other investors and chinese companies but very likely US government will end up with an egg on its face.

I'm not sure what you're referring to in reference to "drop this claim completely".

FCC is actively pursuing removal of Huawei and ZTE equipment under a threat to national security.

https://techcrunch.com/2019/10/28/fcc-rules-huawei-zte/

You're making up facts. US is actively restricting Huawei from doing business with them.

China started cooperating on trade talks?

The point is that any foreign company becomes a national security threat if it's big enough and it threats the domestic player. It's really all about power(economic and technological).

> I honestly don't know what to believe anymore.

Business is business.

Facebook has released a TikTok clone, Lasso, but they miss a lot of basic things that made TikTok popular, both from a policy perspective and from UX. It's much less competitive than Instagram's cloning of Snapchat.

Initially Lasso only supported registering with a Facebook account, defaulting to exposing your real name to the world. TikTok let you browse anonymously and register with just a phone number or email account, letting users protect their identities much easier. Lasso now allows you to register with an Instagram account.

Lasso has much worse video quality-- seemingly SD vs HD, presumably to save bandwidth, but it makes videos much less appealing since they're noticeably blurrier. This may be because Lasso decided to show me Spanish videos for no apparent reason (or maybe that's where their users are?), and most Spanish-speaking countries have predominantly Android phones which have worse video quality.

The infinite scrolling feels worse because videos fade in from black instead of displaying their first frame while scrolling into view. The feed isn't actually infinite, but refuses to load past a certain point. You can't swipe right from the feed to view a user's profile.

Regarding censorship, I'm not convinced ByteDance's Chinese style "ban anything contentious" censorship is actually a downside for most teen users. Instagram has _very_ loose censorship policies, which easily allow the feed to become very sexualized. I expect this makes younger users feel less comfortable posting publicly-- Instagram is where the bikini models and their followers hang out!-- while TikTok's more carefully curated space feels age-appropriate. That may all be network effects, though, with social networks as always being colonized first by the young.

16-24 yo (and even younger) American kids/youth being exposed to Chinese propoganda and censorship is most definitely a national security concern.

> is the real-time interests of millions of 16-24 yo Americans reported back to the Chinese government a national security concern?

Yes. They are kids today, but they might be a Senator, CEO, or President tomorrow.

Or they might grow up to be an average person, but with a sensitive job and a Chinese intelligence officer needs background on someone to flip them.

They don't need sensational information, just insight on how their target can be influenced.

>One question I have, is the real-time interests of millions of 16-24 yo Americans reported back to the Chinese government a national security concern?

Perhaps not, but the influence of a nebulous "algorithm" controlling what comes up next certainly can reinforce a message or way of life that line up with China's cultural norms

Grindr's in the hands of the Chinese was already raising hairs. When you consider that Tik Tok is again (after COPA) under FCC investigation over its handling of children data.

> these are mainly kids making music videos. They aren't using it to organize campaigns.

I think that's a dangerously naive interpretation of the platform (or any platform really), particularly when it involves children and young adult minds.

It's sickening to think of music and art as something that is great when its restricted to only be meaningless.

It's not the creation that's the problem. It's the dissemination of others' content and ads (and the choices in what gets promoted/highly ranked/etc).

There are certainly controversies to be had in music videos:

* Songs glorifying violence

* Songs about drugs

* (Partial) nudity

* Songs "belonging" to controversial groups and movements.

If they're highering engineers at "20% above Facebook compensation", it really doesn't make sense. In china they could higher roughly 15 top engineers for the price of 1 engineer in the bay area (in China there's an even bigger surplus of engineering talent).

That doesn't matter at all.

The US controls its domestic market - just as China controls their domestic market - and when it comes to going back and reviewing the TikTok / Musical.ly combination it can dictate terms across the app stores which are all US controlled.

The US can say: we're going to ban your combined entity from all global app stores by forcing Google and Apple to comply with our position on that merged entity (TikTok + Musical.ly).

Google and Apple resist? Say hello to national security based sanctions. They will immediately comply, no more questions asked.

The US can instantly, globally kill TikTok, for all intents and purposes. TikTok would disappear from most global app store availability within a week, from Canada to Australia. It would probably only exist in China.

It's unfair? Tell Qualcomm - NXP that. That was blocked solely out of spite by China. This is an economic conflict with China. When China lets US Internet companies have proper, full access to their market maybe the US will relent and start playing 'fair.'

Most people probably realize it. What we need is for the American CEOs, financial elite, members of government that have investments in China to invest in their own country rather than in a lop-sided trade economy that doesn't allow free flow of money back to the US.

American companies can and do buy Chinese companies. Foreign ownership restrictions have been relaxed or dropped entirely in most sectors in China over the last two decades.

Complaining that American companies can't invest in China is strange, given that until fairly recently, the flow of investment was almost 100% in that direction. It's only in the last few years that Chinese companies have begun investing significantly in American companies.

As for "operat[ing] in China," American companies have a massive presence in China. Where are you getting the idea that American (or foreign) companies can't operate in China? It's the most important market for all sorts of Western companies. The restrictions on tech companies, specifically, have to do with political censorship. Companies that censor have access.

What about French companies buying strategically important companies in the US? That then gets bought by a Chinese company at a later date? Is it a French company still?

Why do you care that US firms can't invest in China? Globalization proponents tell me that this sort of thing only hurts China, by limiting its access to capital - which doesn't seem to be our issue.

Or are you claiming that foreign investment into local companies hurts local companies? If so, please justify our past three decades of policy towards Asia, Africa, South America, and the post-Soviet Eastern Europe. Foreign investment into those countries owns a lot of key businesses and infrastructure, but for some reason, very few firms originating in those countries have significant investments in the US.

If openness to foreign investment is a good thing, why do you care about making it quid-pro-quo? If it's a bad thing, why do we push so hard for it?

This reminds me of the South Park episode where Japan markets Pokemon (Chipokemon) as a secret plot to overthrow the American government using kids -

https://en.wikipedia.org/wiki/Chinpokomon#Plot

So are you saying that currently American companies are NOT allowed to acquire Chinese companies or operate in China?

There are a few instances where that's true (there are also a few instances where Chinese companies are not allowed to acquire U.S. companies or operate in the U.S.) but you said "I would support a wholesale ban on Chinese acquisitions of American companies". So again are you insinuating that at this moment, no American companies are allowed to acquire Chinese companies or operate in China?

And when that happens you will also demand the committee on foreign investments be disbanded to PREVENT any veto of Chinese purchases.

To avoid said double standards.

https://en.m.wikipedia.org/wiki/Committee_on_Foreign_Investm...

A curious development I noticed: Chinese dominated parent company in the Caymans or equiv with two subsidiary "sister companies", with one in US, UK, etc, and the other in China. Besides the obvious IP leakage due to Chinese law, what problems do you see with this and how would you approach this issue?

As would I, but current political realities prevent actions of any kind from being taken.

Ha ha ha...the U.S doesn't like double standards. It must be a first. If you need examples think about human rights and international law not to mention trade.

These types of applications come and go. That a Chinese company made a popular one shouldn't be shocking or indicate some major breakthrough.

And jumping bytes is a great company yet they have no choice but to get political and enforce censorship that bans lgbt contents.

It's similar like Instagram. In your video feed, it would mix some promoted videos.

They're trying to make them more interactive with things like "challenges" and making them look like regular [usually funny] videos.

It's still super easy to skip by them.

Profitability is not required if you are an intelligence asset for the state. In this case, the state is China. Maybe it's legitimately profitable, maybe the Chinese govt is purchasing ads with other companies it owns, maybe the books are entirely cooked. It's hard to tell in China.

A huge swath of the consumer market in physical products is Chinese goods. Why would your average nontechnical, fairly apolitical, non-foreign policy or intelligence news following person draw a distinction?

They see a fun app, they play with it. If they're even aware of censorship issues or geopolitical power games, that seems very distant from some app that amuses them for a few minutes a day.

The globe increasingly feels so connected as to make people not question where things like social networks reside. In the mind of average people, until they have a political axe to grind, the Nation is all but obsolete. The only time the idea has any sticking power is when people are concerned about jobs. Other than that, nobody seems to care all that much.

I'd venture to guess the vast majority don't know it's a Chinese social network

Because Twitter is ignorant of any sign of market opportunity. They had a massive mobile user base, and then they burried the DM functionality deep in the app (this was years ago). Twitter could have become the biggest messaging app before messaging apps were even cool.

I asked my wife’s kid sister, she’s 19 and in college. Her and her boyfriend had no idea about it being Chinese. It was the hot thing at the moment and that’s all they really cared about.

Musical.ly, which TikTok parent company acquired for 1B, was far more American (the company was based in Shanghai, but they had more success in the US and rebranded accordingly).

I myself had no idea they were Chinese, despite working in the space. I wouldn’t expect any average teen to know they are Chinese either

(A) Vine was horribly mismanaged by Twitter. No marketing, no interesting new features, needless attempts to integrate it into Twitter.

(B) How would the average consumer know it's Chinese? They totally rebranded it from their mainland product and in fact the social network itself is totally isolated, so you can't even find Chinese people on it.

> "I'll never understand why (a) Vine was shut down, and (b) So many Americans are eager to rush out and use a Chinese social network."

TikTok is a better app than Vine was. It has far more features (visual effects, etc) and does a good job of making them easy to use. This all translates into better growth and retention.

TikTok was also very well marketed. Lots of slick online ads that went straight to their target demographic. I'm not sure if Vine ever knew quite what it wanted to be.

Vine was and still is a failed execution of the idea of short form video clips. Music.ly and by extension, TikTok are actually really fun, well executed products. I don't think it has anything to do with it being made in China or not and suspect kids today do not care.

Despite the initial hype, Vine was super niche and stopped growing. After it was bought, it seems the new owners didn’t have the foresight or patience to evolve the product into something with more mainstream appeal.

We should have all gone to Coub, but for some reason Americans don't care for Lukashenko joke videos. Go figure.

After all the political stuff going on, every country began seeing foreign communication companies as a national security threat. Russia and China were early on this but EU is also tightening the grip. We had a good go but since the politicians got involved I expect the internet to become separated into regional islands of regulations.

Facebook probably had a dream of becoming a global political influence broker and sell mandate to the highest bidder but I think the people who control the guys with the guns are not especially thrilled to play this game.

This is about more than simply censorship, the broader concern is social manipulation at the hand of foreign governments.

And likewise, those US companies have also drawn similar regulatory attention.

Everyone just stop using other ppl's app. If you need a app you need to code it yourself.

This line of discussion seems a bit off the topic of the thread, but I want to respond to you. Based on your last paragraph, it seems to me like it should be pretty clear why there is so much hate for the Chinese government and the companies that act as agents for Chinese government censorship and oppression policies. There are many Chinese nationals suffering and dying in concentration camps _right now_. Am I obliged to engage in whataboutism just to hold the opinion that example and other human rights atrocities are sufficient reason to reject cooperation with the Chinese regime, or the opinion that domestic companies should not become active agents of the the regime’s censorship objectives to do business there?

Your comment seems to conflate all of that criticism with “hate for Chinese people,” which seems unfair and disingenuous since I and presumably many people opposed to the CCCP feel that way because of the fate of all the people currently in China’s borders and subjugated by the regime.

Easy, there's a double standard here: Chinese companies can buy US companies but not the other way around.

> I absolutely do not understand why there is so much hate for Chinese people, Chinese companies, or the Chinese government.

> please do not act as if your statements about Chinese nationals

I think it's misleading to bring up the Chinese people in this way: the "hate," if it can even be called that, is for the Chinese government and the CCP. The real or imagined influence of the CCP over Chinese companies is causing the latter to be viewed with greater suspicion.

The Chinese people/Chinese nationals as a group aren't being viewed as antagonists (though unfortunate abbreviations like using "the Chinese" for "the Chinese government" do confuse things sometimes). If anything, I'd bet most people who are critical of the CPP, etc. would see the Chinese people sympathetically as closer to victims than anything else.

Markets work best when there is transparency: for instance adding MPG to car labels helps "the market" make good choices by informing customers at the point of sale. The law which dictates an MPG sticker is "the government getting involved".

Another example: trademarks allow superior brands to win over time. The enforcement of trademarks is "the government getting involved".

The market is no longer free when China is involved. They'll gobble American market share (and use that market share to further their political goals) while completely blocking out American companies from the Chinese market.

Nobody would care if TikTok were Taiwanese or South Korean.

The free market is usually predicated on rational actors. I don't think the target market of teenagers fits the bill, nor does any market, really, once propaganda enters the picture.

would anyone use it though? Isn't this the same as launching a instagram clone a couple of years ago. It's not a challenge to build but your a clone and presumably don't have the clout to get teens to even see it let alone use it.

It was only in Turkey, since TikTok has to follow local laws.

i suppose there are trade deal talks going on between us and china?

> Trump supporters are a prominent voice on the platform

Not necessarily, the algorithm shows you things you are interested in. I see China, Golden Retrievers and various songs I like. You see Trump because your eyeballs got locked on the screen. So you will see more Trump.

YouTube isn't hip enough to take away TikTok market share in any worthwhile amount.

There are a few US companies that might, but Google isn't going to be it. Social sharing isn't in Google's blood, and they've never succeeded before with their $1,000,000,000+ spent on attempts.

Maybe this explains where all those lobbying $$ are going. If you can’t beat China at market manipulation, then join ‘em!

Honestly, I think it's more "You know what happens when you piss off the US gov, Youtube?" (Gov shoots TikTok, to make an example) "That's what. Now get back to work."

Youtube has done a lot of stupid things lately that really do feel like it is an external political agenda being forced on them, not an internal one being forced by misguided placation of shareholders.

Americans beginning to complain that the Chinese government is influencing American's free speech at home due to the financial entanglements made freely by American companies. In essence, US companies economic interests are impacting US citizen free speech.

Great point! Now I we don't have to worry about it. Move along everyone, nothing to see here!

Yup, US power is being attacked on all fronts. Just look at how fearful congress was of the Libra cryptocurrency. They were literally talking about libra being a risk to the entire US financial system because libra could blackmail the USA by pulling USD as a reserve backing libra, causing high inflation in the USA. It is no surprise that people/countries/companies are trying to get out of the web we have created around the world (through the financial system). The problem is the USA is imposing all sorts of rules and regulations on foreign countries, threatening their sovereignty. Also the USA is usually extremely militant in how we enforce our rules. Don't comply with the rules - we shut down your accounts, seize your assets etc. Then we require ever financial institution to monitor their customer's activity and report it to authorities. Completely Orwellian system. No wonder people are trying to get out of it.

I agree with your premise. Still, at some point one has to pick sides and I know I by far prefer a world ruled by the US than a world ruled by China. That there are situations that could improve I won't argue but it does not change what is preferable for most people in the planet I would say.

The false equivalence is strong with this one. In no way shape or form is it even remotely similar.

[flagged]

We changed the title because the actual story, as stated in the first paragraph, is distant enough from the article title as to make that title misleading. "U.S. opens national security investigation into TikTok" connotes something very different from reviewing a specific acquisition. Actually Reuters is usually a lot more careful than that.

As for whether the headline says TikTok or ByteDance, the only thing I care about is what readers will complain about least. If we make it say ByteDance, that's correct, but people will accuse us of trying to bury the lede because no one has heard of ByteDance. (Why on earth would we do that? Obvious answer: we must be controlled by the Chinese state, or some other sinister interest. How people come up with this stuff...)

The problem is that if it says TikTok, people will complain about the title being incorrect. I've flipped it the other way for now; let's see what's worse.

I really wish HN wouldn't do this except for materially incorrect titles. I find myself trying to figure out if a link/discussion is the same one I've already read after the title has been editorialized.

Wouldn't a more accurate and informative title include "TikTok's owner Beijing ByteDance"

I wonder if anyone ever built an HN title change tracker. Seems a trivial project for the audience of this site.

https://news.ycombinator.com is run by M5 Hosting out of San Diego.

M5 Hosting is also known as M5 Computer Security out of San Diego.

These firms are a strange choice for a place like YCombinator to host I think.

This is a completely ridiculous title change, doesn't match the article title, and totally obfuscates the relevance of the article.

They also edited a headline for a #1 ranked story about Blizzard and the Hong Kong issue, removing Hong Kong from the headline entirely.

HN sort of reminds me of China -- a dictatorship with zero transparency and a penchant for manipulation.

Edit: Can't forget the spineless bootlickers who are hopelessly devoted to the state! You know you've struck a nerve when the best 'reply' they can offer is a silent downvote.

You can't flex "soft power" when all you have is monetary grip of the situation (investments).

Where is tactful diplomacy, cooperation and building mutual rapport when dealing with China?

This app is amazing. Its growing like crazy.

I mean, there's basically one primary mechanism by which the president's actions can be challenged (other than lawsuit on constitutionality), and that mechanism is currently in progress in the House of Representatives.

I'm not sure I'd call that "Everything's fine"