President Biden has resorted to extortion to destroy one of China’s leading digital companies ByteDance, the owner of the highly successful social media group, TikTok.
Strongly backed by Congress, Biden insists ByteDance must be sold to an American company, or he will ban it in the US where it has 140 million monthly users. The adoption of such gangster tactics by a US president is a new low in how America relates to the rest of the modern world.
ByteDance has responded by spending over US$1.5 billion on a restructuring plan to keep all of the data in America within a US software group Oracle Cloud. This means no US customers’ data can go to China. Problem solved! Or so it might seem. Yes, it will stop China accessing the data if it wants to. But this does not fix Biden’s main worry – that TikTok is symbolic of China’s growing success in high-tech industries. He wants to destroy it as a Chinese asset.
Whether China does access any of TickTock’s data is unclear, but he certainly has the power to do so. Australian governments can, and do, access data of corporations operating here. It can even order them to alter their technology to make it easier for Australian agencies to access data. But Biden is taking the level of interference to another level by threatening to ban a Chinese company operating in the US unless it sells the entity to an American company.
TikTok initially gained attention for attracting teenagers who post a brief item of them singing or dancing on the site. But it is far from the only app to engage in the extensive collection, storage and transfer of data, as noted in a recent paper for the American Center for Strategic and International Studies. The paper says numerous US companies transfer sensitive personal information across international borders, including to some entities located within China. It says, “PayPal shares customer names, addresses, transaction details, and device identifiers with two companies in China to process payments and target advertisements.” Unlike PayPal, the paper says that the majority of US digital enterprises “tend not to publicly reveal which foreign individuals, private companies or governments, they might transfer information to.”
In July 2020 , the American Civil Liberties Union released a large quantity of redacted information showing how the Department of Home Security buys mobile location data to monitor US citizens without following proper protocols. The ACLU said it was particularly concerning that government agencies bought access to huge volumes of peoples’ cell phone location information to “sidestep” the fourth amendment’s right not to be subject to unreasonable government searches and seizures.
Biden set another precedent last year when he seized all the assets of Afghanistan’s central bank held in America. This was nothing short of theft. He said half, US$3.5 billion, will fund court cases brought by alleged victims of the terrorist attacks in September 11, 2001. The other half will go to agencies to help alleviate the appalling hunger the US left behind after losing its 20 year war there. An American critic said the 9/11 victims deserve justice, “but not from the Afghan people who became pawns in the middle of the US led war on terror and the oppressive Taliban regime”.
Earlier, President Trump imposed high tariffs on goods from China, supposedly to punish it for unfair trade practices. He also wanted China to buy US$200 billion of US products over two years. Some Australian industries lost out, as China switched to buying from the US. Subsequent studies, however, show the tariffs hurt American consumers the most.
Although he did not adopt Biden’s extortion tactics, Trump ordered Google to stop selling $11 billion worth of software each year to a leading Chinese high tech company Huawei to use in its phones, which were out- selling Apple phones around the globe. Although the ban hurt Google as well as Huawei, it also reduced the gains from international trade.
Australia had already joined the US in a bigger campaign to smash China’s dynamic high tech companies. At its peak Huawei allocated 10% of its revenue to R&D in 37 centres around the globe. It developed a superior version of 5G communications equipment that looked like dominant dominating the fire, the global industry. The destructive campaign focused on claiming this technology allegedly could be used for spying. The campaign succeeded in greatly harming Huawei’s profitability, regardless of whether the 5G system is used to spy.
Similar allegations were earlier made against a less sophisticated form of Huawei’s communications infrastructure. In 2012, the then Australian prime minister Julia Gillard stopped Huawei from supplying telecommunications Routers to the NBN, supposedly to protect the nation’s top-secret national security communications system. But that system can’t be accessed from the NBN, and even if it could, the communications are protected by what the Australian Signals Directorate calls unbreakable encryption.
The US electronic spy organisation, the National Security Agency, and its network of over 30 partner countries, is by far the most powerful spy group in the world. It illegally intercepts vastly more communication signals from a wide range of sources than China.