TikTok Users Aren’t Freaking Out Over ‘Disaster’ CEO Testimony

TikTok Users Aren’t Freaking Out Over ‘Disaster’ CEO Testimony

The US government may be moving towards a radical restructuring of TikTok, if not an outright ban on the Chinese-owned social media app. But for Jaci Butler, internet personality and singer with 4 million followers on the disputed platform, the commotion is old.

“I’m kind of out of touch with it,” said Butler, 27, of Los Angeles. “I’m like, ‘No, there’s no way this could happen again.’”

And yet, it seems to be happening again. In 2020, then-President Trump — fueled by growing concerns about the app’s data privacy standards and ties to the Chinese government — began pushing for parent company ByteDance to separate TikTok’s U.S. assets or face an outright ban from the country.

Those efforts petered out after the courts blocked Trump’s ban attempt, but they never completely disappeared. Now President Biden is chasing them again.

The Committee on Foreign Investment in the United States, or CFIUS, supposedly told ByteDance that it has to sell TikTok or get kicked out of the country. Meanwhile, Congress is considering an outright ban on apps that China can control, and there appears to be broadly bipartisan demand for changes.

TikTok Chief Executive Shou Zi Chew testified before a House committee in Washington on Thursday morning, answering questions about the platform’s data privacy, ties to China and influence on American users.

“ByteDance is not owned or controlled by the Chinese government,” Chew told the House Committee on Energy and Commerce. Responding to concerns about user privacy and security, he added: “We believe that clear and transparent rules are needed that apply broadly to all technology companies.”

In the eyes of many analysts, the panel signaled impending crisis for TikTok.

“We see a period of 3-6 months ahead for ByteDance and TikTok to complete a sale to a US technology player,” investment firm Wedbush Securities said in a note to clients following the hearing. “If ByteDance fights this forced sale, TikTok will likely be banned in the US by the end of 2023.”

“We would characterize today’s testimony … as a ‘disaster’ moment,” the realtor said.

In a statement, TikTok spokeswoman Maureen Shanahan criticized lawmakers and referred to the company’s plan (known as Project Texas) to address concerns about Chinese influence by working with Austin-based technology company Oracle to store US user data domestically and examine TikTok’s code.

“Shou came prepared to answer congressional questions, but unfortunately, the day was dominated by political arrogance that failed to recognize the real solutions already under way through Project Texas,” said Shanahan. “Also not mentioned today by Committee members: the livelihoods of 5 million businesses on TikTok or the First Amendment implications of banning a platform loved by 150 million Americans.”

TikTok creators who spoke to The Times this week described mixed emotions in reaction to the growing likelihood of a forced ban or divestment. Some who generate a substantial amount of their income on the platform are concerned about adapting. Others said they are less anxious, either because they’ve seen it all before or because they’re more prepared to adapt.

During Trump’s ban campaign, the app’s creators were freaking out, said Butler, who joined the app in 2017 (back of Musical.ly) and now, through partnerships with brands, she earns about 40% of her revenue from it. “We were all posting our final videos and ‘If this is the last time we see you’ [messages] to our fans.”

TikToker Jaci Butler, with green hair and several necklaces, poses for a portrait.

Jaci Butler has been using TikTok since 2017. Now, she’s counting on a federal crackdown on the app — the second such effort she’s faced since joining.

(Brandon Friend-Solis)

This time around, she said, the nervous energy the TikTok community displayed in 2020 has been replaced by a more subdued sadness.

“People don’t seem as panicked as they did the first time,” said Alex Stemplewski, an Orange County TikToker known for his photography. “My friends who are creators, they didn’t even bring this to me. … People say, ‘Well, we were so worried about it the first time that we thought it would happen, and it didn’t.’”

The tone isn’t the only thing that has changed in the years since the first push for a federal crackdown on TikTok. Many social media creators and influencers have started to diversify their online presence by asking their fans to follow them on various rival social media sites.

That task has become easier in recent years as American technology companies have started releasing their own versions of TikTok’s signature format: an endless feed of fast-paced video clips powered by invisible recommendation algorithms. Creators can now share their TikTok-like content on YouTube Shorts, Instagram Reels, and more.

“The first time TikTok was potentially banned was a good wake-up call,” said Stemplewski, 33, who generates more than half of her earnings through TikTok. “It was a reminder that a good business strategy for me as a content creator was to diversify.”

Emile El Nems, senior vice president of credit at Moody’s Investors Service, said in an email that a US ban on TikTok would benefit competitors like YouTube, Instagram and Snap (which hosts its own TikTok copycat Spotlight).

However, even as platforms like Reels and Shorts offer viable alternatives, many creators feel emotionally attached to TikTok, which started the current wave of super short video stars.

“I had so much fun with it,” said Kelsey Kotzur, a 29-year-old fashion and lifestyle influencer based in Brooklyn. “I learned a lot. I was able to reach an audience that I probably never would have.”

When the Biden administration started hinting that it might file a lawsuit against the company, she started backing up her old Pinterest and YouTube posts in case one day her phone suddenly stopped allowing her to open TikTok.

“Are we going to have to be forced to start over on another app?” she asked. “It’s messing with our creativity. We’re nervous. We’re all on edge, basically, waiting for the other shoe to drop.

To avoid a ban on TikTok, politicians have suggested that parent company ByteDance could sell its US operations to a domestic buyer, although on Thursday the Chinese government said it would oppose a compulsory sale.

It would be a less disruptive change for TikTokers because they would still have access to the app. However, such a sale would introduce new issues. For example: how would another owner change TikTok?

“I never thought my audience would be global, but it is,” Kotzur said, adding that she’s worried that a new owner could change how the app’s content recommendation algorithm works. “I wonder, if it was bought by an American company, would it not be so globalized.”

The effect of a sale “really depends on who bought it,” said Butler, the singer. “I think the concern is if something happens like with Twitter and Elon, you know? How things kind of spiraled.”

Elon Musk, the tech mogul who runs Tesla and SpaceX, acquired Twitter in October, after a prolonged will dispute, will not go with the administration. Since then, he has laid off employees, faced legal challenges, overseen bugs and outages, released a site change list, and at one point, commissioned a system designed to aggressively promote your posts to users.

For many of Twitter’s users, it has been a wake-up call about what can happen when a popular social media app is taken over by a new one.

The renewed effort to ban TikTok has also hurt the ambitions of neophyte influencers.

Valeria Fridegotto, a 23-year-old student living in Chicago, has begun building her presence on the app in recent months, gaining popularity in part through her involvement with a tendency to “disinfluence”. She recalls seeing in 2020 Instagram memes of the TikTok music note logo emblazoned on a tombstone. Now a TikToker, she has a personal stake in the matter.

“I don’t think people really believe anything is going to happen,” she said. “I hope people take this a little more seriously – because now that I’m in it, I’m like, ‘OK, this could drastically change the way I support myself.’”

Helen Li, a colleague at the Los Angeles Times, contributed to this report.

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