Senators Unconcerned Over Economic Impact as They Move Toward TikTok Ban

As the Senate moves closer toward providing the Biden Administration with the power to ban Chinese-owned TikTok over national security concerns with the wildly popular visual social media app, an effort first initiated in the twilight of Donald Trump's presidency, there seems to be little concern in the upper chamber over the impact such a ban could have on U.S. commerce.

TikTok boasts more than 100 million American users—nearly one-third of the total population. And with this popularity, it has emerged as a prominent fixture within the American economy. According to a May 2021 Adweek-Morning Consult survey, 49 percent of TikTok users said they have purchased a product or service after seeing it promoted, advertised or reviewed on the app.

Lawmakers on both sides of the aisle find themselves in agreement that TikTok presents national security concerns to the United States on the grounds that its parent company ByteDance is based in China, meaning the Chinese Communist Party ultimately holds power over the company and its data.

But a look at the statistics shows that TikTok is merely the bright shiny object on the tip of the iceberg. A July 2022 report from Statista reveals that China's direct investment in the U.S. reached $38.25 billion in 2021. It averaged $36.87 billion during the four years of the Trump administration, up from the $10.01 billion average during the eight years of the Obama administration.

Newsweek asked members of the 12-person bipartisan group drafting the Restricting the Emergence of Security Threats that Risk Information and Communications Technology (RESTRICT) Act how they're weighing the economic considerations of users who do business on TikTok as they move forward with the bill.

Chinese-Owned TikTok
This photo illustration displays TikTok on the screen of a smartphone in front of a Chinese flag on September 18, 2020 in Paris, France. The app has come under scrutiny in the U.S. for its ties to the Chinese Communist Party. Photo Illustration by Chesnot/Getty Images

"Remove the platform, and other platforms will step up to the plate," Democratic Senator Joe Manchin of West Virginia, a member of the working group, told Newsweek. "We have to have American control."

Manchin's opinion on the matter mirrored that of other lawmakers: National security concerns posed by TikTok outweigh its role in the U.S. economy, and other American social media platforms should have the ability to fill a TikTok void.

"I think that we need to think about the entire universe of social media on which these small businesses rely," Democratic Senator Michael Bennet of Colorado, also a member of the group, said when asked the same question.

"We need to understand that, and we need to be thoughtful about that," he added. "Not any of that changes the basic facts that we have a national security concern that having TikTok owned by ByteDance, and therefore subject to the whims of the Chinese Communist Party, is a bad thing."

Some apps have already looked to mimic the success of TikTok. Instagram introduced a "reels" section in 2020 which features short videos displayed in a manner similar to the Chinese app. YouTube additionally introduced a "shorts" section in 2021 which also presents content in a manner similar to TikTok.

Despite these new features, however, TikTok remained the most downloaded app in 2022.

Senators Discusses Bill Allowing Banning Of TikTok
Democratic Senator Joe Manchin of West Virginia speaks during a news conference to introduce the RESTRICT Act with (L-R) Senate Select Committee on Intelligence Chairman Democrat Mark Warner of Virginia, Democratic Senator Michael Bennett of Colorado, Republican Senator Mitt Romney, and Republican Senator Dan Sullivan of Alaska at the U.S. Capitol on March 07, 2023 in Washington, D.C. The senators stress that TikTok presents a threat to U.S. national security. Photo by Chip Somodevilla/Getty Images

Part of the reason for TikTok's success lies in its reputation for boasting an algorithm in its "For You" page that some users feel can "read their mind"—one video on this topic boasts over 650,000 views. As the app continuously refines its responses to user interests, some people find themselves spending more time on the platform. The more time spent, the richer TikTok's data on that individual user becomes.

Lawmakers and members of the intelligence community say this data could be used to carry out the Communist Party's bidding across the U.S.

In a hearing before the House Homeland Security Committee, FBI Director Christopher Wray said TikTok's algorithm "could be used for influence operations if they so chose. Or to control software on millions of devices, which gives it opportunity to potentially technically compromise personal devices."

The House has also moved to advance a bill giving Biden the power to ban the app, and senators continue to voice optimism in continuing that effort. Some feel that the RESTRICT Act, which is being led by Intelligence Committee Chairman Democratic Senator Mark Warner of Virginia and Republican Whip John Thune of South Dakota, does not go far enough.

One of those critics is Florida's Republican Senator Marco Rubio, vice chairman of the Intelligence Committee, who said the bill doesn't crack down on the app appropriately because it only gives the Commerce Secretary the power to ban TikTok, as opposed to banning the app outright.

Florida Republican Marco Rubio said that economic concerns "should be weighed against our national security and against the long-term security interests of the country as a whole."

Courtesy of @marcorubio

"Those interests in my mind are always going to be predominant," he added. "They have to be. Because without national security, none of the other things matter."

But communicating the national security threat to the platform's base could prove challenging. According to a 2019 Pew Research Center report, six in ten Americans "believe it is not possible to go through daily life without having their data collected."

For the app's core user base, the Gen Z cohort, this perceived reality may be of even less concern. While a 2019 study by Adobe found that Gen Z are "a little more discerning" than other age groups when it comes to sharing their data, 69 percent said they'd be willing to do so "in exchange for a better experience with a brand."

Because the app is widely recognized for its ability to connect users with their interests, it has become a valuable tool for both large and small businesses alike. As covered in The Washington Post, the promotion of books through #BookTok "helped make 2021 one of the publishing industry's best sales years ever." Some users now make more money creating videos for the app than they do from their day jobs, including the account holder of "Chipmunks of TikTok," who boasts nearly 15 million followers.

But Rubio and his colleagues are not concerned with backlash from TikTok users if they ban the app, and with the backing of the world's largest business collective, the U.S. Chamber of Commerce, that lack of concern comes with corporate backing.

"U.S. Chamber defers to U.S. national security and intelligence agencies regarding national security issues that may arise from the operation of TikTok and other Chinese social media apps in the United States," a Chamber spokesperson told Newsweek.

"Separately, the Chamber has also long expressed serious concern about the market access that [People's Republic of China] value-added telecom services, including social media applications, and other Chinese companies enjoy in the United States which the PRC side does not reciprocate for U.S. businesses," the statement added. "The ongoing asymmetry remains a matter of serious concern for the Chamber and our members, and we urge the PRC to provide the access to U.S. companies that PRC companies enjoy in the United States."

Republican Senator Mitt Romney of Utah, a member of the working group, said that entrusting Commerce Secretary Gina Raimondo with assessing the economic risks of a ban before taking action should alleviate concerns about the economic impact.

"Those issues will be dealt with by the commerce secretary under our legislation," Romney told Newsweek. "We give the secretary the capacity to review the threat posed by an application or a product, whether manufactured or software or social media product, and to assess the appropriate protections for our citizenry."

TikTok did not respond to Newsweek's request for comment.