Why Trump’s TikTok Deal Seems Like A Repackaged Version The Biden White House Rejected

Key Concepts:

• TikTok, ByteDance, Project Texas, USDS (TikTok US Data Services), Trump Administration, Biden Administration, National Security, Advertising, E-commerce, Recommendation Algorithm, Revenue Sharing Agreements, CCP Propaganda, Operational Relationship, Sale vs. Spin-off.

Trump's TikTok Deal: A Repackaged Project Texas?

• Main Argument: The proposed TikTok deal under the Trump administration resembles the Project Texas proposal that the Biden White House previously rejected. ByteDance appears to have successfully negotiated a deal that allows them to retain significant control over key aspects of TikTok's US operations.

• Similarities to Project Texas: The deal shares similarities with a 2022 draft agreement (reported by Forbes in 2023) where ByteDance would maintain visibility and control over key functions like budgeting, asset sales, debt, and bankruptcy within the new US entity.

• Key Points of the Proposed Deal:

  • ByteDance retains control over advertising, e-commerce, and the recommendation system.
  • ByteDance will receive approximately 50% of the new US TikTok's revenue through revenue-sharing agreements.
  • The deal involves a "sale of limited TikTok assets," potentially just TikTok USDS.

Project Texas: A Rejected Proposal

• Description: Project Texas involved creating a new US legal entity, TikTok US Data Services (USDS), supposedly separated from ByteDance with data stored in a US data center managed by Oracle.

• Biden Administration's Concerns: The Biden administration rejected Project Texas because it allowed TikTok's algorithm source code and software development to remain in China, enabling Chinese employees and ByteDance to influence TikTok's operations.

• Congressional Action: Congress passed a law requiring TikTok to be sold or banned, explicitly stating that the new TikTok could not have any "operational relationship" with ByteDance, rejecting the premise of Project Texas.

The Illusion of a Sale

• Repackaging Project Texas: ByteDance's lobbyists have spent over a year repackaging Project Texas's terms as a "sale" to meet the letter, if not the intent, of Congress's law.

• Semantic Differences: Casting the arrangement as a "sale of US TikTok" rather than a spin-off or limited set of functions creates the impression of a more comprehensive deal.

National Security Concerns: Advertising and CCP Propaganda

• ByteDance's Continued Control of Advertising: A Reuters report indicates that a division wholly owned by ByteDance will control US TikTok's revenue-generating operations, including e-commerce and advertising.

• Potential for CCP Propaganda: If ByteDance retains control over US TikTok's advertising, it could use that control to serve CCP propaganda to US TikTok users, as it has done in Europe.

• Example: In 2023, Forbes reported that Chinese state media organizations had run ads on TikTok reaching millions of Europeans with CCP propaganda.

Notable Quotes:

• Trump's Executive Order: "TikTok's United States application will be operated by a newly established joint venture based in the United States."
• Senior Biden Administration Official: Project Texas "would still allow TikTok's algorithm source code and software development to remain in key measures in China and it would allow Chinese employees and ByteDance employees to continue to have influence over TikTok's operations."

Technical Terms and Concepts:

• Recommendation Algorithm: The system that determines which videos are shown to users based on their viewing history and preferences.
• Revenue Sharing Agreements: Contracts that specify how revenue will be divided between different parties.
• Operational Relationship: A direct connection or involvement in the day-to-day activities and functions of a business.
• CCP Propaganda: Information or ideas spread by the Chinese Communist Party to promote its ideology and policies.

Synthesis/Conclusion:

The proposed TikTok deal under the Trump administration raises concerns that it is a repackaged version of Project Texas, a proposal previously rejected by the Biden administration and Congress. ByteDance's continued control over key functions like advertising and the recommendation algorithm, coupled with revenue-sharing agreements, suggests that the company may retain significant influence over TikTok's US operations. This raises national security concerns, particularly the potential for CCP propaganda to be disseminated to US users. The deal's framing as a "sale" may be misleading, as the actual contract terms may not reflect a complete transfer of ownership and control.