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Today, in the wake of an election that surprised everyone and no one, we’re publishing a re-post of a piece we wrote earlier in the year: the TikTok ban.

Why are we doing this? Because it’s a great example of what’s to come: incoherent policies, and flip-flopping positions based on who can curry favor.

Update on this piece: Trump signed the executive order to ban TikTok. Now he’s saying he’d never ban it. Why did he change his position? Because he said the ban would only help Mark Zuckerberg, who he considers to be an enemy of the people.

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TikTok: Thinking clearly about the ban

First off, this isn’t a direct ban.

Congress passed a law that would force ByteDance (TikTok’s parent company) to divest from its US business. The timeline is 9-12 months.

A big topic surrounding this potential sale is the ownership and use of TikTok’s algorithm, the thing that causes this app to have a chokehold on our attention.

Our prediction?

A sale won’t happen. TikTok will shut down its US business. The company will focus its business in other fast-growing markets. It can’t afford giving up any part of its algorithm.

Why ban it?

TikTok is a foreign company. It’s a huge part of a Chinese parent company. And Chinese companies are required to turn over any data collected on users whenever the government asks for it.

Whether TikTok has shared US consumer data is irrelevant. The fact is that the company is required to turn over data collected

….whenever the Chinese government asks for it.

This is essentially government surveillance conducted by a foreign government that could weaponize an algorithm against foreign populations across the globe.

Note: China does not allow Facebook or Google to operate in its country. This fact should make anyone look twice at who operates in their backyard.

What about freedom of speech, tho?

Yeah, this is an absolute no brainer. Seems kinda dystopian ‘banning’ something for national security purposes.

Is it a boon for free speech to have as much of it and across as many platforms as possible? Yes, absolutely. Speech thrives when there’s a multitude of perspectives, opinions, etc.

But now a lot of that speech is fed and filtered through an algorithm, and we also have to think through the consequences of having so much of our speech live on platforms owned by 3 or 4 giant companies.

Which brings us to our next point…

This entire thing is avoiding broader privacy regulations

There’s a very popular argument going around that US companies collect as much data as any other company and we’re not doing anything there.

Absolutely valid. We need stricter data and privacy regulation when it comes to our online life, and it’s a tragedy that congress didn’t do anything after the 2016 election to pass any sweeping legislation that would put user data back into the hands of the user.

I got to the end of this email…Give me the details of a deal

Alright yeah.

Here are some terms/conditions on a potential deal:

1. Straight up sale to a US buyer: the ones that are liquid enough would be a tech giant like Microsoft, or any PE group that likes money…ha.

2. Algorithm Ownership: The sale of the algorithm is a no-go for ByteDance. More than likely, the government might get on board with a licensing agreement but with a data protection clause that would unable the algorithm holder (that’s ByteDance) to access any of the data. We don’t know how viable this is.

3. Algorithm licensing fee: It’s going to be hefty as hell.

4. No deal at all: You’re a company with your back against the wall. You’ve have no leverage. Maybe it’s better to shut the thing down than to sell a premium asset at a discount price.