
U.S. opens a national security review of TikTok’s acquisition of Musical.ly - situational87
https://www.reuters.com/article/us-tiktok-cfius-exclusive/exclusive-u-s-opens-national-security-investigation-into-tiktok-sources-idUSKBN1XB4IL
======
Merrill
Musical.ly was started by entrepreneurs in Shanghai. Although it may have had
US and Japanese investors, I don't think it was an American company.
[https://en.wikipedia.org/wiki/Musical.ly](https://en.wikipedia.org/wiki/Musical.ly)

>"It’s the first company to be headquartered in China, designed in China, but
popular in the US," said Greylock investor Josh Elman. "Finally we’re seeing
talented people who live in that ecosystem in that world and actually
transcend it and build products in the US."

[https://www.businessinsider.com/what-is-
musically-2016-5](https://www.businessinsider.com/what-is-musically-2016-5)

~~~
mgraczyk
I've heard this myth that musical.ly was founded in China before, but it's
hard to believe if you look at some basic facts.

One cofounder worked full time at SAP in SF bay area for several years before
and after musical.ly was founded. The other says on his LinkedIn that he was
working in Santa Monica for several years on either side of the founding. They
lived, worked, and founded the company in CA.

~~~
ahbyb
Alex Zhu and Luyu Yang don't sound very Californian to me.

~~~
0xffff2
Really? As both a SoCal and Bay Area resident name alone would tell me
absolutely nothing about whether someone was a native to either area.

~~~
DiogenesKynikos
Their public LinkedIn profiles say that they went to university in China.
They're Chinese.

~~~
icebraining
Probably true. Of course, them being Chinese has nothing to do with where the
startup was founded.

~~~
DiogenesKynikos
That's true, of course. However, every source I can find says that the company
was founded in Shanghai, but ended up being more successful in the American
than the Chinese market, and opened up offices in California. Most of the
engineers are supposedly in Shanghai, though. One more detail is that the
founders appear to have worked in Silicon Valley before founding the company.

Whether any of this makes any difference, as far as US law goes, I don't know.

1\. [https://www.businessinsider.de/what-is-
musically-2016-5](https://www.businessinsider.de/what-is-musically-2016-5)

2\. [https://www.reuters.com/article/us-bytedance-
musically/china...](https://www.reuters.com/article/us-bytedance-
musically/chinas-bytedance-scrubs-musical-ly-brand-in-favor-of-tiktok-
idUSKBN1KN0BW)

3\.
[https://www.youtube.com/watch?v=wTyg2E44pBA](https://www.youtube.com/watch?v=wTyg2E44pBA)

------
nknealk
I highly recommend folks listen to recent episodes of Ben Thompson’s exponent
podcast where he discusses TikTok and its influence in the USA.

He makes the point that US consumers become subject to Chinese censorship
policies when using the platform while China outright bans or heavily
restricts American companies from operating (eg google search, Facebook).

~~~
fruzz
I mean, as a Canadian consumer using American social media platforms, we're
subject to American censorship policies. Tumblr / Facebook / YouTube being
most notable in their filtering of LGBT content and suspending accounts of
LGBT users, because of the American governments stance on human sexuality.
This argument of who censors makes sense for Americans, but it's more about
picking your poison for people from other countries.

~~~
EpicEng
>we're subject to American censorship policies. Tumblr / Facebook / YouTube
being most notable in their filtering of LGBT content and suspending accounts
of LGBT users, because of the American governments stance on human sexuality

No, you're subject to corporate censorship policies. Let's not pretend that
individual platforms regulating content is the same as government censorship.
Please show me how their policies are related to "the American governments
stance on human sexuality".

Also, doesn't Canada have a few laws on the books regarding how people are
allowed to address other people, specifically, LGBTQ people?

~~~
LudwigNagasena
Let’s not pretend a monopoly regulating content is much different from
government.

~~~
joyeuse6701
Oh it is when the entity with a monopoly also has a monopoly on violence a.k.a
government. A Uighur detention center, U.S. concentration camp etc. can only
enforce their views with threat of violence. It is on an entirely different
level of cardinality. To equate them would be to undermine the misery that
those that suffer under such extreme regulations of content/thought.

------
situational87
After the US claimed that Huawei was a national security threat only to drop
this claim completely when China started cooperating on trade talks I honestly
don't know what to believe anymore.

~~~
oogali
I'm not sure what you're referring to in reference to "drop this claim
completely".

FCC is actively pursuing removal of Huawei and ZTE equipment under a threat to
national security.

[https://techcrunch.com/2019/10/28/fcc-rules-huawei-
zte/](https://techcrunch.com/2019/10/28/fcc-rules-huawei-zte/)

~~~
josefresco
> I'm not sure what you're referring to in reference to "drop this claim
> completely".

Probably in reference to this:
[https://www.nytimes.com/2019/07/01/business/dealbook/huawei-...](https://www.nytimes.com/2019/07/01/business/dealbook/huawei-5g-national-
security-trade.html)

~~~
airstrike
That was a really good read. Thanks for sharing

------
bredren
It was clear to me how threatened Facebook was by TikTok when I brought it up
with an employee in June.

They kept mentioning infinite scroll, and that everyone was supposed to be
thinking about how to incorporate that into product.

After zuck discussed TikTok directly recently, I’m not surprised google and fb
lobbyists would press for this investigation.

One question I have, is the real-time interests of millions of 16-24 yo
Americans reported back to the Chinese government a national security concern?

~~~
paxys
16-24 yo (and even younger) American kids/youth being exposed to Chinese
propoganda and censorship is most definitely a national security concern.

~~~
tbyehl
Yes, Americans should only be exposed to American Corporate-sanctioned
propaganda.

~~~
ShteiLoups
Hey, at least americans can vote on that propoganda.

~~~
hnuser77
They can not. Media ownership and media content, even NPR, is not tied to
electoral representation.

------
justinzollars
TikTok is actually a great app. When I was a kid in the 00's my friends and I
used to carry around a video camera to make music videos. With TikTok you can
do it with your cell phone.

They beat SnapChat, FB and Instagram on experience.

Censorship is something serious to consider, but these are mainly kids making
music videos. They aren't using it to organize campaigns.

~~~
inetknght
> _these are mainly kids making music videos. They aren 't using it to
> organize campaigns._

I think that's a dangerously naive interpretation of the platform (or any
platform really), particularly when it involves children and young adult
minds.

~~~
sol_remmy2
Have you seen the weird articles on Snapchat Discover? "Why I'm never taking
my mom to an x-rated convention again" "How my kitten play fetish makes me
feel less alone" "Why I've been dressing like a horse for twenty years"

If I had a teenage daughter, I'd feel much more comfortable with her using the
Chinese tik-tok than whatever tabloid-level trash Snapchat is pushing these
days. Some of these American media companies have just gotten _weird_

~~~
homonculus1
I think you're too worried about that. I saw plenty of weird fetish shit on
forums in my teens and I _think_ I turned out okay, plus a preparedness to
accept the breadth of weirdness in humanity. The main thing you should care
about is teaching your daughter to recognize clickbait and worthless content.

~~~
gdy
"preparedness to accept the breadth of weirdness in humanity"

Why is it a good thing? Or even okay? Isn't it a slippery slope?

------
feelthepress
Oct 14: "TikTok has moved into Facebook’s backyard and is starting to poach
its employees"

[https://www.cnbc.com/2019/10/14/tiktok-has-mountain-view-
off...](https://www.cnbc.com/2019/10/14/tiktok-has-mountain-view-office-near-
facebook-poaching-employees.html)

~~~
thorwasdfasdf
If they're highering engineers at "20% above Facebook compensation", it really
doesn't make sense. In china they could higher roughly 15 top engineers for
the price of 1 engineer in the bay area (in China there's an even bigger
surplus of engineering talent).

~~~
logicchains
That's simply not true. A top engineer in China costs at least $100k, no way
Facebook is paying its engineers ~$1.5 million. ByteDance is famous for paying
high salaries: [https://crm.org/articles/3-million-pay-packages-how-a-
chines...](https://crm.org/articles/3-million-pay-packages-how-a-chinese-
startup-is-attracting-top-talent).

------
yorwba
The article conveniently forgets to mention that Musical.ly was founded by
Chinese founders and headquartered in Shanghai. Maybe they technically were an
American company, but it's not clear the outcome would have been much
different from a "national security" perspective.

~~~
adventured
That doesn't matter at all.

The US controls its domestic market - just as China controls their domestic
market - and when it comes to going back and reviewing the TikTok / Musical.ly
combination it can dictate terms across the app stores which are all US
controlled.

The US can say: we're going to ban your combined entity from all global app
stores by forcing Google and Apple to comply with our position on that merged
entity (TikTok + Musical.ly).

Google and Apple resist? Say hello to national security based sanctions. They
will immediately comply, no more questions asked.

The US can instantly, globally kill TikTok, for all intents and purposes.
TikTok would disappear from most global app store availability within a week,
from Canada to Australia. It would probably only exist in China.

It's unfair? Tell Qualcomm - NXP that. That was blocked solely out of spite by
China. This is an economic conflict with China. When China lets US Internet
companies have proper, full access to their market maybe the US will relent
and start playing 'fair.'

~~~
yorwba
Yes, the US government has the power to block mergers. However, consider the
hypothetical scenario where Musical.ly rejects TikTok's offer and competes
them out of the US market, growing to the same size as TikTok is today. In
that case, there would be no merger to block, but the national security
implications would remain the same. What would the US government do then? Put
them on a blacklist like Huawei?

~~~
zachguo
It will be forced to sell to US entities, like Alstom and Samsung.

------
rygh
I know this a long time ago, they ban lgbt content and I never download the
app on my phone. Chinese business is controlled by the state.

------
nostromo
I would support a wholesale ban on Chinese acquisitions of American companies
until American companies are allowed to acquire Chinese companies (or
otherwise operate in China).

These ridiculous double standards from China are not free trade, and we should
stop pretending it is.

~~~
president
Most people probably realize it. What we need is for the American CEOs,
financial elite, members of government that have investments in China to
invest in their own country rather than in a lop-sided trade economy that
doesn't allow free flow of money back to the US.

~~~
influx
This is an area where both the right and left can find agreement.

~~~
eanzenberg
Doesn't 1 side support globalism politically though?

~~~
uncletaco
"Both sides" have anti-globalists, and both have globalists, and despite an
interesting few years globalism is still the establishment norm for most
mainline parties in liberal democracies.

~~~
lonelappde
"globalism" isn't one thing. Both communism (international workers movement)
and libertarianism (free markets) have globalist aspects.

You can believe in geographical borders while also having foreign relations.

~~~
uncletaco
I was not trying to imply globalism was one thing. I also pointed out that it
is the norm for "liberal democracies", as a way to not paint with too broad of
a brush. I very much agree with you.

------
wslh
It is crystal clear that TikTok is a pivot for China. I think this is the
first Chinese application that beats the US (Silicon Valley) "monopoly"? It is
a great business and cross cultural achievement.

It seems like the Chinese could be successful in duplicating SV even in a non
democratic context.

~~~
origami777
These types of applications come and go. That a Chinese company made a popular
one shouldn't be shocking or indicate some major breakthrough.

~~~
wslh
You can say the same of FB, Instagram, etc but coming to the "top top" is not
an easy task and give you leverage for launching the next app. But you missed
my other observation: it was difficult for Chinese companies to launch western
attractive apps, you can take TikTok as an outlier or lucky app or you can be
alert of the things that might come next.

------
dade_
TikTok is actually a great app. Content is very entertaining and it is
actually easy to use. I still can't figure out Snapchat.

Today it is just a way for me to burn 15 minutes, but I see plenty of
potential and make the concerns of censorship and ownership valid concerns.

~~~
rygh
And jumping bytes is a great company yet they have no choice but to get
political and enforce censorship that bans lgbt contents.

------
AWildC182
Does anyone have any insight into their revenue model? How are they succeeding
where Vine failed or are they still just riding investor capital?

~~~
Consultant32452
Profitability is not required if you are an intelligence asset for the state.
In this case, the state is China. Maybe it's legitimately profitable, maybe
the Chinese govt is purchasing ads with other companies it owns, maybe the
books are entirely cooked. It's hard to tell in China.

~~~
avocado4
You're being downvoted but state subsidies are one of the largest concerns
US/EU have with China, so it's a valid point.

Not to say that TikTok doesn't have any revenue at all, they have ads.

~~~
gman83
I've seen maybe 3 ads in using TikTok for 6 months every day.

------
will_pseudonym
Bring back Vine, Twitter!

Why was it shuttered? It seemed like such a short-sighted move. Vine had such
cachet and was fun to use & create on it. RIP

------
CydeWeys
I'll never understand why (a) Vine was shut down, and (b) So many Americans
are eager to rush out and use a Chinese social network.

I suspect (b) can be explained primarily through ignorance.

~~~
__jal
A huge swath of the consumer market in physical products is Chinese goods. Why
would your average nontechnical, fairly apolitical, non-foreign policy or
intelligence news following person draw a distinction?

They see a fun app, they play with it. If they're even aware of censorship
issues or geopolitical power games, that seems very distant from some app that
amuses them for a few minutes a day.

~~~
cartoonworld
This so much. Few consumers know this fact, and fewer care.

Everyone knows the stuff they buy is manufactured in China, and the old timers
holding weird grudges from the 1970s are long gone.

There is no economic incentive for anyone to bring this up at any time during
any transaction.

------
undefined3840
Twitter really screwed up by shutting down Vine. What a crazy thing to think
that by doing so they may have generated a national security issue? Wild.

------
RedComet
US companies (Twitter, Facebook, Google) censor people all the time.

~~~
mrtksn
After all the political stuff going on, every country began seeing foreign
communication companies as a national security threat. Russia and China were
early on this but EU is also tightening the grip. We had a good go but since
the politicians got involved I expect the internet to become separated into
regional islands of regulations.

Facebook probably had a dream of becoming a global political influence broker
and sell mandate to the highest bidder but I think the people who control the
guys with the guns are not especially thrilled to play this game.

~~~
kart23
I dont know, I really fear a world where the US blocks all chinese social
media, and china blocks all US social media, in the name of 'national
security'.

~~~
kube-system
That would be unfortunate, but it's not nearly as bad as the effects we'll see
if the trend of information warfare against civilians continues.

I've come to expect falsehoods on the internet for political or commercial
gain -- but I find the recent trend of using propaganda to spark hatred,
outrage, and panic, to be particularly disturbing.

------
xmly
It is not about censorship. It is about WHO censor WHO.

~~~
guuguuguu
Everyone just stop using other ppl's app. If you need a app you need to code
it yourself.

------
quaquaqua1
I am an American-born man of Western European descent. My girlfriend is a
Chinese passport holder here on H1B. I am an anarchist.

I absolutely do not understand why there is so much hate for Chinese people,
Chinese companies, or the Chinese government. Literally everything has flaws,
and Western Europe and USA have plenty of them.

If you are not willing to say "China does xyz but actually also my country
does something similar to xyz too, and it's definitely bad"...

...then at the very least, please do not act as if your statements about
Chinese nationals are 100% true for every individual. Humans are humans, they
differ in meaningful ways but they also deserve dignity and respect.

~~~
mustacheemperor
This line of discussion seems a bit off the topic of the thread, but I want to
respond to you. Based on your last paragraph, it seems to me like it should be
pretty clear why there is so much hate for the Chinese government and the
companies that act as agents for Chinese government censorship and oppression
policies. There are many Chinese nationals suffering and dying in
concentration camps _right now_. Am I obliged to engage in whataboutism just
to hold the opinion that example and other human rights atrocities are
sufficient reason to reject cooperation with the Chinese regime, or the
opinion that domestic companies should not become active agents of the the
regime’s censorship objectives to do business there?

Your comment seems to conflate all of that criticism with “hate for Chinese
people,” which seems unfair and disingenuous since I and presumably many
people opposed to the CCCP feel that way because of the fate of all the people
currently in China’s borders and subjugated by the regime.

~~~
quaquaqua1
I do not deny any of the claims you have made about concentration camps, human
rights abuses, corporate interests etc.

But I would really like to understand why there is a double standard in the
minds of "my fellow Westerners".

Boeing, Raytheon, Booz Allen Hamilton, Halliburton, Lockheed, and the whole
Washington aparatus in general have been (in)directly responsible for the
deaths of millions of innocent people in the Middle East, yet I am still happy
to use Instagram and Whatsapp and Youtube.

Similarly I will use TikTok concurrently while understanding that the Chinese
government has locked 1 million Uighurs in a concentration camp. Surely, not
every Chinese citizen voted for this idea. So we shouldn't make assumptions
about what "Chinese people" are like

~~~
crematoria
Nobody is stereotyping the Chinese people!

Google and Apple have publicly stood up against the US government, and the US
doesn't (publicly and legally, at least) meddle with companies to anywhere
near the same extent as China.

When I support Google, I support Google alone, but when I support Tencent, it
feels a little like I'm supporting the Chinese government, too.

~~~
guuguuguu
Imagine being this native.

------
NN88
FaceApp redux?
[https://www.washingtonpost.com/technology/2019/07/18/heres-w...](https://www.washingtonpost.com/technology/2019/07/18/heres-
what-we-know-about-russian-company-behind-faceapp/)

------
morpheuskafka
Shouldn't this issue be addressed by the free market rather than by the
government getting involved? If there is evidence that the app censors content
to serve CCP propaganda, then consumers can make the choice not to use it.

~~~
chillacy
Markets work best when there is transparency: for instance adding MPG to car
labels helps "the market" make good choices by informing customers at the
point of sale. The law which dictates an MPG sticker is "the government
getting involved".

Another example: trademarks allow superior brands to win over time. The
enforcement of trademarks is "the government getting involved".

------
sjg007
Time for some savvy US entrepreneurs to spin up a TikTok alternative..

~~~
anewaccountaday
would anyone use it though? Isn't this the same as launching a instagram clone
a couple of years ago. It's not a challenge to build but your a clone and
presumably don't have the clout to get teens to even see it let alone use it.

~~~
sjg007
You'd probably need some compelling functionality.. maybe filter fx or
something. But if TikTok is banned in the US then you might have a fighting
chance.

------
turbo_fart_box
There are entire sub-genres of lesbians, trans, gays, and all sorts of LGBT
people on TikTok. I don't see a ban on the platform

~~~
outuiorew
It was only in Turkey, since TikTok has to follow local laws.

------
colorincorrect
unrelated question: but why would any investigator leak information like this?
who benefits?

~~~
buboard
i suppose there are trade deal talks going on between us and china?

------
ryanmarsh
The censorship argument against TikTok seems odd given that Trump supporters
are a prominent voice on the platform (I'm a huge TikTok user). Wouldn't its
Chinese masters want to silence support for him as well? Why haven't they?

To be clear, I don't like the idea of foreign state controlled major social
platforms opaque to US oversight. I'm commenting specifically on the argument
that TikTok silences Hong Kong supporters.

~~~
justinzollars
> Trump supporters are a prominent voice on the platform

Not necessarily, the algorithm shows you things you are interested in. I see
China, Golden Retrievers and various songs I like. You see Trump because your
eyeballs got locked on the screen. So you will see more Trump.

~~~
ryanmarsh
Their algo is weird. I’ve noticed if I watch something more than once my feed
will be all about that thing.

------
kevin_thibedeau
YouTube: That's a nice video streaming business you got there TikTok. A shame
if anything ever happened to it.

~~~
kick
YouTube isn't hip enough to take away TikTok market share in any worthwhile
amount.

There are a few US companies that might, but Google isn't going to be it.
Social sharing isn't in Google's blood, and they've never succeeded before
with their $1,000,000,000+ spent on attempts.

~~~
chrisjc
Especially not in China ;)

------
Ar-Curunir
While I agree that Chinese soft imperialism is bad, I think it's tremendously
funny that Americans are complaining about it now, after years of using
military and economic power to enforce a similar imperialism everywhere.

~~~
tyri_kai_psomi
The false equivalence is strong with this one. In no way shape or form is it
even remotely similar.

~~~
molteanu
"Your boy cracked my son's head!"

"Your boy started it first. He broke mine's leg!"

"Yeah, a cracked head is not even remotely similar to a broken leg!"

Moral of the story: Broken legs are normal.

~~~
bilbo0s
In the world of international relations, there really are no good guys.

But in a world where everyone is a bad guy, hypocrisy can be forgiven, since
it keeps other bad guys in check despite its self-serving intent. Hypocrisy,
whether European, Russian, American or Chinese, keeps the peace.

~~~
markdown
> In the world of international relations, there really are no good guys.

Bhutan. Bhutan are the good guys.

~~~
modulos
Bhutan engaged in ethnic cleansing and expelled over 100,000 Lhotshampa into
Nepal.

~~~
markdown
Googled it. Thanks for that. I was unaware.

For anyone else: [https://thediplomat.com/2016/09/bhutans-dark-secret-the-
lhot...](https://thediplomat.com/2016/09/bhutans-dark-secret-the-lhotshampa-
expulsion/)

------
nullc
So HN changed the headline to remove TikTok which is a name I reconized and
replaced it with "ByteDance" and "Musical.ly", which I've never heard of
before. It was originally displayed on HN the same as it is in the article.

From the article, I know that the new headline is more precise. But it's much
less informative, I wouldn't have clicked the article under this name.

~~~
radcon
They also edited a headline for a #1 ranked story about Blizzard and the Hong
Kong issue, removing Hong Kong from the headline entirely.

HN sort of reminds me of China -- a dictatorship with zero transparency and a
penchant for manipulation.

Edit: Can't forget the spineless bootlickers who are hopelessly devoted to the
state! You know you've struck a nerve when the best 'reply' they can offer is
a silent downvote.

~~~
abduhl
The phrase spineless bootlicker is such an internet citizen phrase.

Outrage culture signaling with respect to language is always so fascinating.

------
lol768
For context: title appears to have changed from "U.S. opens national security
investigation into TikTok" to "U.S. opens a national security review of
ByteDance’s acquisition of Musical.ly".

------
nezzor
Why was the title changed from “tiktok” to musical.ly?

------
drgoodvibe
China now flexing its soft power...

~~~
spectramax
You can't flex "soft power" when all you have is monetary grip of the
situation (investments).

Where is tactful diplomacy, cooperation and building mutual rapport when
dealing with China?

~~~
SkyMarshal
Soft power is all about money. All the rest you mention is useless without it.

------
objektif
There is a massive push to make TikTok a thing. But it is the most stupid app
I have ever seen. So they might as well stop pushing the fake videos online.

~~~
justinzollars
This app is amazing. Its growing like crazy.

------
Slartie
So a president who basically hands victory after victory to foreign
governments and who effectively reduced the toolbox of the United States to
shape foreign relations to "sanctions" and "tariffs" is not considered a
threat to national security. Everything's fine with that.

But if just one foreign social network app manages to divert some serious
attention of US teenagers from Facebook for the first time in Internet
history, THAT of course is a threat to national security.

Seriously...is this a parody?

~~~
stetrain
I mean, there's basically one primary mechanism by which the president's
actions can be challenged (other than lawsuit on constitutionality), and that
mechanism is currently in progress in the House of Representatives.

I'm not sure I'd call that "Everything's fine"

~~~
Slartie
At the moment there is definitely a majority of people sitting in the Senate
who would put their signature under an "everything is fine". My hope is that
this changes, but the chances are limited, if at all existent, so: yes, by all
accounts I currently have to assume the powers in charge consider everything
to be fine.

------
codedokode
> They said they were concerned ... whether China censors content seen by U.S.
> users. They also suggested TikTok could be targeted by foreign influence
> campaigns.

That reminds me of Soviet Union. Government choosing what kind of propaganda
citizens should watch.

> He cited questions about why TikTok had “only had a few videos of the Hong
> Kong protests that have been dominating international headlines for months.”

Does politburo^W democratic government has a right to decide that a privately
owned app must show Honkong protest videos? If yes, then what is the minimum
quota of Honkong protest videos the app needs to meet? Should other apps, like
dating or chess apps, show Honkong protest videos too?

> The company has said U.S. user data is stored in the United States

They should not. The data are better protected from such US senators if stored
in China.

> Any platform owned by a company in China which collects massive amounts of
> data on Americans is a potential serious threat to our country

And what about US companies collecting data on foreign citizens?

> Chinese company may be censoring politically sensitive content

Some might call it moderation.

