Democrat and Republican lawmakers are pushing for a U.S. ban on TikTok, arguing the Chinese-owned social media app is a national security risk. But many of its users argue that will severely harm their businesses.
Democrat and Republican lawmakers are pushing for a U.S. ban on TikTok, arguing the Chinese-owned social media app is a national security risk. But many of its users argue that will severely harm their businesses.
Today, we hear from some of them. Read the full transcript here.
Host: Gustavo Arellano
Guests: L.A. Times reporter technology reporter Brian Contreras and L.A. Times business reporter Jaimie Ding
More reading:
For some, TikTok is a path to riches and the American dream. With a ban, it could all disappear
TikTok might get banned after ‘disaster’ testimony. Why do some TikTokers not care?
The Biden administration’s threat to ban TikTok: Here’s what you should know
Gustavo: So you know TikTok? Video app, funny stuff, the youth in your life use it while you still don’t get it because you’re still on Facebook? Yeah, it’s big.
So big that Republicans and even some Democrats on Capitol Hill think it’s just one big conspiracy by China to take down the United States.
AP Tape-Biden Admin: The White House is giving all federal agencies 30 days to wipe TikTok off all government devices. The Chinese own social media app is coming under increasing scrutiny in Washington. Over security concerns.
Gustavo: There are even some bills threatening to ban TikTok in the U.S. altogether.
But the social media app has become part of how people keep their businesses alive, and how some people make a living, period.
I’m Gustavo Arellano. You’re listening to “The Times,” essential news from the L.A. Times.
It’s Monday, April 10, 2023.
Today, the people who’ll suffer if TikTok becomes illegal in the United States.
Here to talk about all this is my L.A. Times colleague Brian Contreras. He's a tech reporter who covers the influencer economy.
Brian, welcome to “The Times.”
Brian: Glad to be back. Thanks for having me.
Gustavo: So I'm old enough to roll my eyes at the very premise of this episode that TikTok is somehow different from any social media app ever that has come before it, or that it's this revolutionary innovation unlike anything ever seen since, oh, I don't know, papyrus. So go for it.
Convince me what sets TikTok apart that makes it so revolutionary and innovative.
Brian: Well, uh, I'll leave the convincing you to TikTok’s PR team, but I think the real innovation we're talking about here is sort of this idea of a AI-curated feed of content. The main innovation that TikTok brought to the table was what's called the For You page, which is sort of this main centralized feed of algorithmically curated content.
So what that means is in social media platforms of days past – you know, your Facebooks, your Twitters – what you were doing there is choosing whose content you wanted to see: You friend someone on Facebook, you follow them on Twitter. TikTok is choosing it for you based on your behavior on the app, and, you know, figuring out what you like and what you're gonna continue to engage with going forward.
So, you know, it's sort of a black box, how that algorithm works. We know a little about it, some of that from leaks, but it's really hard to say what makes it so good.
But certainly in my experience, and I think in the experience of most people who have used the different types of apps within this space, TikTok is just far and away the best one at knowing who you are and knowing what you want.
There's also some, you know, aesthetic differences. It sort of has this vertical scroll of videos that's sort of like falling down this hole of content going deeper and deeper. But the real innovation here, I think is this, uh, algorithmic curation that you're starting to see copied by other platforms.
Spotify even recently rolled out a new homepage that sort of looks like TikTok. So I think this is something a lot of companies are catching on to and implementing on their own platforms because it did so well for TikTok.
Gustavo: So what has TikTok’s success looked like?
Brian: Yeah, I mean, it's one of the biggest apps in the country, depending on what metrics you're looking at. It is continuing to churn out stars. You know, some of the biggest names in social media recently. You think about Charli D’Amilio or sort of that space of like the very classic TikTokers, people living in the house in Beverly Hills, uh, you know, making videos with their other teenage friends.
Like, it has dominated the culture over the last few years. And like I said, everyone's copying it now. You know, you have, uh, Instagram and YouTube and uh, Snapchat launching basically clones of TikTok because they are so desperate to get in on this gold rush.
Gustavo: And you know, you mentioned Snapchat. There was Instagram, Facebook, and all of the YouTube for that matter. They, they all offered ways to monetize what you would post online. What makes the TikTok way of making money different?
Brian: Sure. I mean, one thing is that because there's less of that mechanism for following people and it's more algorithmically driven. What this means for creators is that you can get discovered sort of out of nowhere if you are able to ride the wave of that algorithm.
So you know, on your very first video in theory, even if you have zero followers, if you are able to make a video that capitalizes on what the algorithm wants, or at least what it thinks users want to see, you can blow up sort of out of nowhere.
Now, the flip side of that is of course, that fame can be very fleeting if you don't build relationships with your followers, right?
You're really relying on this invisible machine to keep you famous and keep your content out there in a way that wasn't necessarily true in a system that's more reliant on sort of follows and friendships and that sort of more bidirectional connection. TikTok has also introduced a number of different monetization features to help people make money.
They have a creator fund that's supposed to share some of the profits that the company is getting through ads. There's a lot of criticism that you make a lot more money from a YouTube video than you do from one TikTok or even multiple TikToks. Your presence on the platform doesn't necessarily convert to money unless you're a big name, at the end of the day.
So it's a mixed bag, but certainly it has made people take making money on social media more seriously than they did before.
Now people look at that as a serious career path. Whether they should or should not is another question, but certainly you're seeing young people treat that in a way that they might have thought about being a rockstar in a previous generation.
Gustavo: So we have something that rewards creativity and has sparked a new generation of entrepreneurs. That sounds cool to me. So why do lawmakers want to ban it.
Brian: So this is one of the rare issues we've sort of seen both parties push for. People will remember under President Trump there was this big campaign to ban TikTok, and that ultimately got blocked by the courts, and now we're seeing it come back under President Biden. The main concern here is national security.
TikTok's parent company is ByteDance, a Chinese firm that U.S. politicians are concerned has too-close ties with the Chinese government.
And the main thing people are worried about is China essentially has a national security law that, if it deems it necessary for national security, it can have TikTok or, you know, any other Chinese company surrender user data, surrender information that it might need.
This in a time of heightened tensions with China, sort of across the board, something that both parties are becoming more concerned about, generally; you see people pushing back on sort of the ability of China to access user data.
Gustavo: So what's the status of any ban or anything right now?
Brian: So right now where we stand is that CFIUS or the Committee on Foreign Investment in the United States, is this federal agency. And it's essentially given ByteDance, which is TikTok's parent company, an ultimatum, which is either you can sell TikTok to a U.S. company or we're gonna kick you out of America entirely.
And the Chinese government has said, well, we're definitely not gonna sell it.
So it's sort of a stalemate right now. We're waiting to see what happens. Is the U.S. gonna kick the app out of the country? A few weeks ago, the CEO of TikTok testified before Congress, and he certainly held his ground talking about the ways in which American user data is safe from the Chinese government, safe from surveillance.
Shou Zi Chew: I have seen no evidence that the Chinese government has access to that data. They have never asked us. We have not provided.
Rep. Anna G. Eshoo (D-Menlo Park): Well, you know what, I find that, I find that actually preposterous.
Shou Zi Chew: I have looked and I have seen no evidence of this happening. And in order to assure everybody here and all our users. Our commitment is to move their data into the United States to be stored on American soil by an American company overseen by American personnel. So the risk will be similar to any government going to an American company asking for data.
Brian: But the general takeaway from that hearing was that American politicians really don't want TikTok in the country right now, or they at the very least want to force a sale to an American company.
So it's hard to say where things go. You know, there's a lot of political pressure for President Biden to appear strong on China, and that could lead to him going through with a ban. On the other hand, that would be a really big move for him to ban such a popular app. one that's bringing a lot of money to people who make their living on it in America.
So, you know, I'm certainly not a political reporter, but it's gonna be interesting to see where that goes cuz there's a lot of tension on both sides of the table.
Gustavo: But you are an influencer reporter, so how are TikTok creators feeling about all this, this potential ban.
Brian: Yeah, I mean, you have to keep in mind this is the second time a lot of these people are worrying about their, in some cases, their primary source of income getting just kicked off their phones from one day to the next. So to some extent, people are worried. You know, I talk to people who make more than half of their money on this app. It's certainly a decently sized part of the American economy at this point, even if it is a Chinese company.
On the other hand, my sense among the influencers I talked to is, last time a president was saying they were gonna ban TikTok, that being Trump, he tried to do it and then the courts blocked it and nothing happened for a few years.
And certainly people were, in my conversations with them, saying, all right, I've seen this playbook before. I'm not going to, you know, get all worried about it when I don't actually think something's gonna happen. So they're sort of in this limbo where there are high stakes for them, but people are a little skeptical that Biden is gonna be any more successful at pushing this through than Trump was.
Gustavo: Who did you talk to about the impact of TikTok on their career?
Brian: So another TikToker I spoke with was Jaci Butler, who's a singer. She has 4 million followers on the platform, and, uh, she said she's sort of over it. I mean, she's sort of skeptical that this is really gonna happen. At the same time, if it does happen, it would be a big impact on her. This is a substantial part of how she gets her music out to the public.
Jaci joined the app back in 2017 when it was an app called Musical.ly.
Jaci Butler: I was in a rock band for eight years. And when that disbanded I ended up moving out to L.A. to be a solo artist. And I jumped on Musical.ly because, you know, people were doing it and I thought this might be a cool way to promote my music or something.
Brian: And Musical.ly, essentially would become TikTok later on through this acquisition. It would get bought by ByteDance and then sort of merge into TikTok. But she's been on the app a long time and, in that time she's come to make about 40% of her income on TikTok.
Jaci Butler: I'm at about 4 million followers now, so it's my biggest platform.
Gustavo: What would a creator like Jaci then stand to lose with a TikTok ban?
Brian: There's multiple levels to this. On one hand you have the financial level. Like I said, she makes about 40% of her income on TikTok. On the other hand, people, especially people like Jaci who are trying to pursue a creative pursuit, in her case, singing, lose access to their fans, they lose access to people they've developed friendships with, whether that's, you know, their fans or other creative people, other influencers.
So those are sort of two sides of it, especially with someone like Jaci who's in the music industry. TikTok has changed how the music industry works. Music is really central to it and a lot of studios and a lot of producers use it to either test musical ideas or push songs out there and get essentially free promotion if you can go viral.
So it's a big part of that industry and seeing it disappear overnight, or even just change if it gets sold to someone who messes with the algorithm, would have a big impact on people who rely on it.
Gustavo: So you mentioned all these creators who would be very upset if TikTok got banned in the United States. How does TikTok feel, not just about a band, but about the assertion by a lot of politicians that it poses a national security threat to the United States.
Brian: So on the technical side of things, TikTok's big plan to address this is what they call Project Texas, which would see American user data move to servers owned by Oracle, and the idea here is that once the data is within, you know, U.S. shores it, you no longer have to worry about the Chinese government accessing user data of, you know, whatever teenager is on TikTok.
Um, you know, so they say that in the process they're deleting old user data, um, from other servers and migrating new user data onto Oracle servers. That's sort of their technical answer to the question. Politically, you know, like I mentioned, the chief executive testified before a house committee recently, and he was, you know, very adamant that ByteDance, which is TikTok's parent company, isn't owned or controlled by the Chinese government.
Gustavo: So what's next for TikTok?
Brian: It really depends on where the U.S. government goes with this. Like I said earlier, the Chinese government has said they're not down for a sale to a U.S. company, which sort of, you know, between that and the ultimatum that CFIUS gave to ByteDance, you sort of are only left with this one outcome, which is: Does the U.S. government want to ban TikTok wholesale from America?
It would be a pretty unprecedented move, uh, especially with a company and a social media company of this size. But politically, I think it's sort of a game of chicken at this point. Like who is going to commit to doing what they've said they're gonna do? So especially, you know, coming up on a presidential election, it's gonna be interesting to see: Do they go forward with this.
Gustavo: Coming up after the break, how a ban on TikTok could affect the small-business owners who have come to rely on the app to keep their doors open.
Gustavo: L.A. Times business reporter Jaimie Ding has also been covering the potential fallout of a TikTok ban. Jamie, welcome to “The Times.”
Jaimie: Thanks for having me, Gustavo.
Gustavo: So Brian Contreras, our colleague, told me that TikTok became a viable way for creators to grow their audiences.
And you spoke to a few smallbusiness owners who use the app for basically the same reasons. What are some of their concerns about a potential TikTok ban?
Jaimie: So a lot of small businesses use TikTok to sort of start growing their customer base. I talked to Elyse Burns from North Carolina. She runs a stationery and home goods design company for her original artwork.
So Elyse started her business in college, but it really started taking off in law school. When she joined TikTok and she started posting about her business, she basically talked about her journey, how she started her small business, the troubles that she went through. How she had to order all these supplies and really get product off the shelves, and people really bought into that.
Elyse: In less than two months, I'm moving my small business into a new office space, and before then, we have literally thousands of pounds of inventory that we need to get through to make that move even possible. So to help with that, I'm bringing back the best deal that we do, which are mystery grab bags.
Jaimie: And so it became a part of her business strategy so much that she started making a lot of money.
Elyse: in 2019, I had $20,000 in revenue. In 2020 I had $360,000 in revenue. In 2021, I had $1.2 million in revenue. And in 2022 I had $1.8 million in revenue.
Gustavo: Wow, that's a lot of money that she made. So what kind of business was she able to build off of TikTok?
Jaimie: So she was making a lot of revenue through TikTok, but she knew that she couldn't depend on one thing. She wanted to diversify her revenue a bit, and so she actually moved into wholesale. She started working with arts and crafts stores, home goods stores, where her designs were being put on products.
And she also actually recently opened a bricks-and-mortar store, and she has employed six full-time employees. And, you know, this is a full business.
One huge thing that she was able to do is pay off her student loans, which, you know, of course, is a concern of millions of Americans. She was also able to pay for all of law school, and she could put out a down payment for a home.
Gustavo: And obviously she's not the only small-business owner whose sales were impacted in a great way by TikTok. Why has TikTok been so impactful for these businesses in a way that other styles of marketing or social media haven't?
Jaimie: So a lot of forms of traditional advertising is quite expensive, and people just can't afford to pay that much at the beginning. They don't really have money, they don't have any sort of advertising budget. TikTok is an easy way for someone to really hit the ground running and get their name out there and really get an audience for their business.
Kellis: If you're a bigger business, you can afford to market across a bunch of different channels and change your strategy and you've got some money to do that.
Jaimie: I spoke with Kellis Landrum. He's an L.A.-based social media marketing expert, and he told me that this ban would really hurt small businesses in their reach.
Kellis: If you are a small business or especially a small proprietor who's been very successful on TikTok, probably a lot of that has to do with your expertise or just how well you fit a market niche. And as a smaller business, it's harder for you to market across a bunch of different channels. and right now as far as small business goes, TikTok offers the broadest organic reach of any of the channels right now. So it helps a lot of small businesses in that respect. And if you take away that option, some of those small businesses might not have any other viable alternative.
Gustavo: So a small business would stand to lose an easy way to grow themselves. What else did they say?
Jaimie: So the thing about TikTok in its algorithm is that you can really utilize it to talk about your product and its development through, you know, short-form storytelling, and you're able to find a niche audience that really resonates with you.
I spoke with one business owner, Lauren Wyman. She founded her business, Dark Mother Clothing, after feeling really stifled at her finance corporate job. And she wanted to make a brand to allow for more self-expression for people like her who dress in sort of a more alternative goth style.
She started off using Facebook ads for marketing, but it was quite expensive, it was not reaching the people that she wanted to reach, and it really wasn’t growing like she wanted it to. But after posting just a few videos on TikTok, she went from a couple hundred to more than $200,000 in sales in about a year or two.
And when we talked about the potential of TikTok getting banned, she told me she's really anxious about what's gonna happen. And she spoke about this idea of finally being able to pursue her passion and, really, her American dream.
Gustavo: Yeah, Lauren told you that she finds it ironic being able to achieve the American dream through a Chinese app. Why do you think she said that?
Jaimie: So I think people for a long time have been unhappy about the system that they're facing in the United States, um, you know, it's not really working for parts of the population. I mean, TikTok on the other hand, a lot of minority owned business owners have spoken up about how it's been able to help them take matters into their own hands, pursue entrepreneurship in a way that, you know, the existing system hasn't allowed them to.
People are able to now quit their 9-to-5s. You know, they can work from home, they can take care of their families. And especially amongst millennials and the younger generation, there's a sense that, you know, TikTok is a platform where they can really speak up, find people like them, and pursue similar interests.
Gustavo: After the break. What backups exist for TikTok in case it gets banned and what creators think about them?
Gustavo: So Jaimie and Brian, the people that the both of you talked to, what are their plans to replicate what they were able to achieve on TikTok if it gets banned?
Brian: I mean, for a lot of the creators I spoke with, they've been trying to diversify their content and what platforms they use since the last time this was an issue under President Trump. So, in the time since that first TikTok ban effort, we've seen a lot of companies like Facebook and YouTube launch these TikTok clones, and some of the instant influencers I spoke with said they hopped on those platforms in part because of the memory of the last time TikTok almost got banned.
They wanted to diversify their content. They wanted to be able to continue reaching their fan base even if, as we're now seeing, another ban effort against TikTok happened.
Jaimie: And the interesting thing that I heard from the business owners that I spoke to is that even though you can post the exact same video from TikTok onto Instagram, you don't get the same burst in sales. You don't get the same kind of engagement, from the community onto Instagram as compared to TikTok.
Gustavo: How are talk's competitors feeling about a possible ban?
Brian: You know, I'm not sure if someone like Mark Zuckerberg has addressed it yet, directly, but you have to imagine the conversations in those boardrooms are pretty happy about what things are gonna look like if this ban does go through. You know, YouTube and Instagram, like I've said, have these competitors and these copies of TikTok they've launched, but they haven't really been able to get the same cultural cachet that TikTok has.
I imagine one of those platforms would step up to take the place of TikTok were a band to happen and that would certainly be a big payday for whoever is able to, you know, take that throne.
Jaimie: I think the important thing to remember is that short-form video is here to stay and people will always be creating content. It's just a platform where it takes place and there's even the possibility that, you know, a new company could step in and take TikTok's place.
Gustavo: And if TikTok were to be sold to new owners, does that change anything about how people perceive TikTok?
Brian: You know, it really depends on who the new owners are. We saw Twitter get sold to a new owner recently with Elon Musk, and a lot of people are unhappy with how that's turned out. It's not impossible to imagine a similar scenario playing out with. But you know, you could also imagine it getting sold to something more boring, like Oracle, for instance.
Uh, it's hard to imagine there would be major disruption ...
Gustavo: IBM.
Brian: Sure. Yeah. I mean there's a lot of boring tech companies out there that could just get this cuz it makes them a lot of money. But you know, maybe they futz with the algorithm and it stops working in the way people have come to expect and it hurts their fan bases or something like that.
Uh, certainly one of the things I spoke with creators about was how global TikTok feels right now, just by its nature of being a foreign company that does a lot of business in the U.S. and sort of has this global presence. People, at least some of them, were nervous that it would, you know, if it's brought into the U.S., would stop feeling like such a global platform and they would mainly be Americans sending content out to other Americans.
So that's one change I can see potentially playing out, but it's really hard to say without knowing who the buyer would be. And you know, it's sort of a moot point cuz the Chinese government says they're not going to let that happen.
Jaimie: And the interesting thing that you mentioned about Twitter, because I think it's a perfect example of what happens when a new owner comes into a large social media company and starts messing around with how it works and, you know, people will start leaving the platform.
And so I think if TikTok came under new ownership, there's really no prediction of, you know, how it might play out.
Gustavo: Finally to the both of you, TikTok might be banned. Twitter is Twitter. Whatever hype Facebook was trying to drum up for the metaverse is gone, basically. So are we about to enter a new era of social media?
Jaimie: I mean, I think this whole debacle really says to me, you know, the internet and social media, it's not something that can easily be controlled or, you know, policed by the government or politicians. It's a wild creature that, you know, millions of users are using to do various things, and a lot of those people have come to love, really love, TikTok, and no matter what happens to it, I think the social media ecosystem will never be the same.
Brian: I'll say two things. One is that I can imagine this ban or sale being a big benefit to sort of the preexisting U.S.-based power players in this space. So certainly, if a ban happens and Instagram is able to step up and take the place of TikTok, that's a big boon for Mark Zuckerberg. There's also talks of Instagram developing a Twitter competitor now, so you can imagine a scenario in which Mark Zuckerberg owns like four of the five biggest social media platforms in these sort of different verticals.
The other one that I think we haven't really touched on yet is the role of AI in social media. We're seeing AI get better at sort of generating content that looks like a human made it.
So, you know, sort of regardless of how these platform politics play out, I can imagine a world in which a lot of content is driven by machines that sort of, you know, instead of just choosing what content you see, they make it wholesale. So that's sort of, you know, regardless of what platform that plays out, I can see that really disrupting things in the next few years.
Gustavo: Hey, yeah, Pope Francis and his fancy jacket.
Brian: You know, it did not trick me, but I heard about it.
Gustavo: That's hilarious. Brian, Jamie, thank you so much for this conversation.
Brian: Thanks for having me.
Jaimie: Thanks, Gustavo.
Gustavo: And that’s it for this episode of “The Times,” essential news from the L.A. Times.
Helen Li, David Toledo, and Nic Perez were the jefas on this episode. It was edited by Heba Elorbany and Mark Nieto mixed and mastered it.
Our show is produced by Denise Guerra, Kasia Broussalian, David Toledo and Ashlea Brown. Our editorial assistants are Roberto Reyes and Nicolas Perez. Our fellow is Helen Li. Our engineers are Mario Diaz, Mark Nieto and Mike Heflin. Our executive producers are Jazmín Aguilera, Shani Hilton and Heba Elorbany. And our theme music is by Andrew Eapen.
I'm Gustavo Arellano. We'll be back Wednesday with all the news and desmadre. Gracias.