What We Know—And Still Don't Know—About Trump's Announced U.S.-China TikTok Deal

Key Concepts

• TikTok US Deal: Potential sale of a subset of TikTok's US operations by ByteDance to address national security concerns.
• Recommendation Algorithm: The system that determines what content users see on TikTok; a key point of contention in the deal.
• Project Texas: ByteDance's initiative to store US user data in a US-based Oracle data center with restricted access for ByteDance.
• Data Security: Concerns about the potential for foreign governments to access and misuse user data.
• Algorithm Curation: The process of humans selecting and promoting videos to train the algorithm and influence user experience.
• Information Seeking vs. Information Finding: The shift from users actively searching for information to algorithms proactively serving content based on predicted interests.
• Algorithmic Bias: The potential for algorithms to reflect and amplify the biases of their creators and the data they are trained on.
• Consolidation of Power: The concentration of control over information and data in the hands of a few large tech platforms.

TikTok US Deal: Status and Uncertainties

The White House released preliminary information about a potential deal for TikTok's US operations, but many details remain unclear. ByteDance, TikTok's Chinese parent company, has been attempting to address US national security concerns for years. Congress passed a law mandating ByteDance to sell TikTok or face a ban in the US. The Trump administration opted to broker a deal instead of enforcing the law.

• What's Being Sold: The deal involves selling a subset of TikTok's US operations, but it likely excludes the recommendation algorithm and potentially advertising and e-commerce components.
• ByteDance's Role: ByteDance will hold less than 20% of the stock, have only one director on the seven-seat board, and be excluded from the company's security committee.
• Framework Agreement: The deal is described as a "framework," suggesting that some details are still subject to negotiation.
• Revenue Sharing: Bloomberg reported that ByteDance would likely receive about 50% of the new US TikTok's revenue through licensing agreements, impacting the valuation of US TikTok at $14 billion.
• Algorithm Licensing: The Chinese government prohibits ByteDance from selling the recommendation algorithm, leading to a compromise where it would be licensed to the new US TikTok. This is a concession the Biden administration was unwilling to make.

Oracle's Involvement and Data Security

Oracle's role in the deal involves data security and investment.

• Project Texas: Oracle would continue to hold new US user data in a secure data center, a practice already in place for the past couple of years.
• Investor Role: Oracle is also an investor in the new US TikTok entity, acting as one of the buyers.

Messaging and Creator/Small Business Impact

The administration is emphasizing the benefits for American content creators and small businesses.

• ByteDance's Strategy: ByteDance is using the argument that TikTok is too big to ban because it supports many creators and businesses, a strategy previously employed by Facebook and Google.

The Algorithm and Human Curation

Emily Baker White's book, "Every Screen on the Planet," explores the algorithm and its impact.

• Human Curators: Early on, ByteDance employed curators like "Jorge" in Mexico to select and promote videos, influencing the algorithm's learning process.
• Algorithm's Limitations: Algorithms lack a sense of humor, irony, and satire, making human curation essential for identifying engaging content.
• Data Inputs: The algorithm relies on data inputs like watch time and user behavior to determine preferences, often subconsciously.
• Information Finding vs. Information Seeking: ByteDance's founder, Jeanying, envisioned a system where information finds people, potentially replacing user agency in seeking information.
• Dystopian Implications: Concerns arise about the potential for algorithms to serve unwanted or harmful content, even if relevant to a user's life.

The "Guy Named Bob" Analogy

A quote from a former FTC commissioner, Moren, is used to illustrate the human element behind algorithms.

• Algorithm as a Person: Moren suggested replacing the word "algorithm" with "a guy named Bob" to highlight that algorithms are created and controlled by individuals.
• Accountability: Algorithms cannot be held accountable for their decisions, emphasizing the need to hold the people behind them responsible.
• Codification of Choices: Algorithms codify the preferences and choices of their creators, influencing their behavior.

Overarching Message and Concerns

Emily Baker White's goal for the book is to highlight the immense power of platforms like TikTok and the need for skepticism.

• Consolidation of Power: These platforms consolidate power over information and data, requiring scrutiny of those in control.
• Government Influence: Concerns exist about both foreign and domestic governments using these platforms to exercise control and shape information.
• Freedom of Information: The book touches on freedom of information, freedom of speech, and technological changes.

Conclusion

The future of TikTok in the US remains uncertain, with a potential deal raising questions about data security, algorithm control, and the influence of both ByteDance and the US government. Emily Baker White's book emphasizes the need to understand the human element behind algorithms and to be skeptical of the immense power wielded by large tech platforms. The key takeaway is that algorithms are not neutral entities but rather codifications of human choices, and their impact on society requires careful consideration and regulation.