MC: Hi everyone. Welcome to Gadget Lab. I am Michael Calore, a senior editor at WIRED, and I am joined remotely by my cohost, WIRED senior writer Lauren Goode.
LG: I think you mean aspiring TikTok star, Lauren Goode.
MC: Send her all your sponsored content requests. We are also joined this week by WIRED staff writer Louise Matsakis. Louise, welcome back to the show.
Louise Matsakis: Hey, thanks for having me again.
MC: Of course. Today we are talking about TikTok. Since the app is owned by the Chinese company ByteDance, there has been some concern that it collects data about American users and shares it with Chinese intelligence services. So in August, President Trump signed an executive order labeling both TikTok and another Chinese owned app, WeChat, national security threats—unless they could broker a deal that would transfer control over to American tech partners. And if they couldn’t, both apps would be banned in the United States.
That deal has not exactly worked out. We’ll get into the issues about data collection and what China actually wants later in the show. But first, let’s talk about the apps themselves, and let’s start with TikTok. Now, Louise, we talked about TikTok when you came on the show back in July, and please, if you can, quickly take us through the history up to this moment.
LM: OK. So the history with TikTok starts a few years ago when this Chinese company called ByteDance, which is sort of like, I hate this analogy, but maybe the Facebook of China in a lot of ways. They bought an app called Musically, which was this lip-syncing app popular among teens and tweens. So a couple of years later, as relations between the US and China started to heat up, Congress took an interest in TikTok, and they said, “Hey, millions of Americans are using this app. Maybe we should be concerned about that.” For a while, it was sort of a little bit of interest here or there, some senators put out some statements, but there wasn’t really too much happening.
And then the pandemic happened. So once the pandemic happened, obviously relations between the US and China completely exploded, and the Trump administration decided that TikTok would be a great pawn to use in relations with China, essentially. So as you said, Trump signed these executive orders, and then there was this great scramble to buy TikTok. So a bunch of companies express interest, from Google to Twitter to Microsoft, which for a while, seemed like the main contender.
But then TikTok decided to reject the offer from Microsoft, and now basically it has decided to go with Oracle and Walmart. So Oracle and Walmart have said that they’re going to make an investment in TikTok, and that’s supposed to resolve the national security concerns raised by the companies’ Chinese ownership. However, as you mentioned, this deal has sort of fallen apart, and there’s a lot of confusion. I’m sure you have plenty of questions, but that’s a lot. I’ll leave it there to start.
LG: Louise, I’m wondering what the involvement of companies like Oracle, Microsoft, and Walmart say about the way this deal is going. Because you would think it would be some of the younger social media companies that would raise their hands and say, “This is a natural fit.” But we’re talking about these stalwart companies at this point. So what does that say about how this has all gone down?
LM: Yeah. So let’s take them one by one. So I think it makes sense for Microsoft here, because unlike Google, Facebook, and Twitter, some of these bigger companies, they have not gotten a lot of interest from regulators about antitrust concerns. So Microsoft is not one of the companies that a lot of people are worried about having too much power right now, for better or worse. So I think Microsoft realized that there wasn’t going to be as much scrutiny if they went for it, unlike Facebook. I think that if Facebook said, “Hey, we want to buy TikTok,” The Trump administration would be like, “Absolutely not. You already have two of the largest social networks in the country. We’re not going to give you a third to resolve the national security concerns.”