TikTok's draft plan to circumvent the ban could give the U.S. government unprecedented oversight powers

For the past few years, the Biden administration and TikTok have been negotiating a deal to address the national security concerns posed by the app. Here's Forbes' scoop on the draft agreement, and what TikTok may need to give up in order to continue operating in the U.S.

"TikTok's draft plan to circumvent the ban may give the U.S. government unprecedented oversight power"

文｜Emily Baker-White

For years, TikTok's parent company, ByteDance, has been negotiating a national security deal with the Biden administration to avoid receiving a U.S. government ban on the short-form video app. Now, we have a draft agreement for the summer of 2022 that reveals how much control ByteDance might cede to the U.S. government.

If finalized, it would allow the U.S. government virtually unfettered access to information inside TikTok and unprecedented control over its basic functionality, something the U.S. government doesn't have on any other large free-speech platform.

The nearly 100-page document, designated as a draft confidential attorney, contains an exchange of views between ByteDance's lawyers and the Committee on Foreign Investment in the United States (CFIUS). CFIUS is an organization of U.S. federal agencies that investigate foreign investment in business transactions that may threaten U.S. national interests.

The draft agreement, which was under negotiation, would give government agencies such as the U.S. Department of Justice or Department of Defense the following powers:

inspect TikTok's facilities, records, equipment, and servers in the United States with little or no notice;

Block changes to the app's terms of service, review policy, and privacy policy in the United States;

Implement a veto on hiring any executive involved in leading TikTok's U.S. data security organization;

Order TikTok and ByteDance to pay for and subject them to various audits, evaluations, and other reports related to TikTok's U.S. functional safety reports;

In some cases, ByteDance was asked to temporarily stop TikTok's functionality in the United States.

The draft agreement would subject TikTok's U.S. operations to broad oversight by a range of independent investigative bodies, including third-party watchdogs, third-party auditors, cybersecurity auditors and source code inspectors. It would also force TikTok U.S. to exclude ByteDance's leaders from certain security-related decisions, while relying on an executive security committee whose operations will be kept secret from ByteDance. Under executive branch rules, the members of this committee are responsible first for protecting U.S. national security and then for making money for the company.

Ama Adams, a CFIUS expert and managing partner at Ropes & Gray, said some of the government powers set out in the draft agreement were typical — such as the right to inspect company facilities and materials and the right to use third-party watchdogs. But "build a structure that pledges allegiance to the United States — I've never seen this level of wording." ”

The provisions appear to address concerns expressed by the Biden administration, the Trump administration and lawmakers of both parties that foreign ownership and control of TikTok threatens U.S. national security. More than 150 million Americans use TikTok for an average of 90 minutes a day, which allows the app to have a huge impact on U.S. business, culture, and speech, and access sensitive private information to nearly half of the American public. In light of this, lawmakers and regulators worry that ByteDance could be required by the Chinese government to use the app to spy on Americans or influence the information Americans see without government oversight. (I previously held policy positions at Facebook and Spotify.) ）

More than 4 years ago, CFIUS began investigating ByteDance in response to these concerns. In 2020, the Trump administration tried to ban the app outright, but failed, after a federal court found that the U.S. government had failed to provide ByteDance with the necessary due process. The draft agreement obtained by Forbes is a microcosm of the U.S. government's ongoing attempts to avoid more aggressive action against the company, including forcing ByteDance to sell TikTok to a U.S. company or banning the app altogether.

But to prevent foreign interference in TikTok, the draft agreement could give the U.S. government some powers it fears the Chinese government will abuse. In a revealing exchange of annotations, ByteDance's lawyers explained to CFIUS that they added some language to the draft to prevent the U.S. government from asking TikTok to modify its recommendation algorithm simply because it recommended something the government didn't like.

Patrick Toomey, deputy director of the National Security Program at the American Civil Liberties Union (ACLU), told Forbes: "If this agreement gives the U.S. government the power to decide what content TikTok can or cannot disseminate, or how those decisions are made, it raises serious concerns about the government's ability to censor or distort what people say and watch on TikTok." ”

Glenn Gerstell, a senior adviser at the Center for Strategic and International Studies and a former general counsel for the National Security Agency, said it was not surprising that the draft agreement gave the government broad powers. He told Forbes: "My feeling is that this agreement is intended to be one of the broadest agreements that CFIUS has signed because of the extraordinary nature of this threat and environment. ”

Since about a year has passed since the draft was written, it is unclear what might have changed or even whether negotiations between the parties are still continuing. In March, CFIUS had asked ByteDance to sell Tiktok or face a ban. Since then, both Tiktok and CFIUS itself have remained silent on the progress of the negotiations (the law prohibits CFIUS from discussing ongoing matters).

In response to a detailed list of questions about the draft agreement, a spokesman for the U.S. Treasury Department, chairman of the CFIUS Committee, said: "In each case reviewed by the Commission, CFIUS will take all necessary actions within its remit to preserve national security and will not settle any matter unless it determines that there are no unresolved national security issues." The department did not respond to questions about how to prevent the U.S. government from overstepping its authority in enforcing CFIUS contracts. The Justice Department declined to comment, but Deputy Justice Secretary Lisa Monaco had previously advised consumers not to use the app.

TikTok spokesman Alex Haurek provided Forbes with the following statement: "It is inappropriate and completely unfair to ask us to comment on an unverifiable document. "To protect sources, Forbes did not provide TikTok with a copy of the draft agreement we obtained.

The statement continued: "As widely reported, we have been working with CFIUS for more than a year to reach a national security agreement and have invested significant resources in implementing firewalls to segregate U.S. user data. Today, all new protected U.S. user data is stored in Oracle Oracle's cloud infrastructure, with tightly controlled and monitored gateways. We do more to safeguard U.S. national security interests than any peer company. ”

If finalized, it would mean that TikTok is subject to far more government regulation than domestic competitors such as Facebook, Instagram, YouTube and Twitter. As long as they do not violate existing U.S. law, these competitors' policymaking, contracts, and internal affairs are largely free from U.S. government interference. But regulators are also divided on the extent to which the U.S. government should be involved in controlling social media, with some advocating for ending legal exemptions for user-posted content and others arguing that it would lead to widespread censorship. Just last month, a Louisiana judge restricted whether and how government officials could request the platforms to remove content. The communication involved in this case refers to a non-binding request from the government to the platform to remove content that may violate its rules.

ByteDance's lawyers raised the strongest objections to some of the draft agreement's provisions that appear to allow the U.S. government to unilaterally change specific parts of the contract at any time in the future, which is highly unusual in any contract. In an exchange in the annotation, ByteDance's lawyers disputed a clause that would allow the U.S. government to change the types of data ByteDance employees can access under the protocol. ByteDance asked the government to be clearer, claiming that if it could change its access to data at any time, the company could not reasonably operate its advertising and e-commerce businesses. The U.S. government responded vaguely that the types of data granted protection status may change over time due to national security concerns.

There is a similar note in another part of the agreement about when the U.S. government should have veto power over contracts that ByteDance has with suppliers. In the annotation, ByteDance told CFIUS that it is not commercially practical to give the government veto power over all of its contracts. CFIUS responded that in some cases, it may need to veto a contract, but will not tell ByteDance why it is doing so.

The reason for this secrecy is likely that executive branches like the U.S. Department of Justice and Defense rely on human intelligence — i.e., spies and their informants — to alert them to potential national security threats. If they receive an informant that a vendor or foreign government is collecting some form of data, they may want to veto the vendor or reclassify the data without notifying anyone that they know about the tip.

CFIUS protocols are generally confidential. "Not everyone wants their (national security agreement) terms to be made public," Adams said. He noted that these agreements often contain proprietary information that could benefit a company's competitors.

But Tumi believes that regardless of the outcome, the situation on TikTok is unprecedented and deserves public scrutiny. "Any agreement that would give the government so much power over the communications platforms used by millions of Americans should be public, not secret."

This article is translated from

https://www.forbes.com/sites/emilybaker-white/2023/08/21/draft-tiktok-cfius-agreement/?sh=2cf03ea1112a