The whole saga has been layered in a thick film of politics since President Trump said last week he planned to ban the short-form video app from operating in the United States. Trump has insisted that TikTok is a national security concern and could be feeding Americans’ data to the Chinese government. TikTok has adamantly denied that, but Trump persisted in his threats to find a way to either ban the app or force ByteDance to divest its ownership in the U.S.
Enter, a somewhat surprising solution: Microsoft.
I’m Rachel Lerman, a breaking news tech reporter for The Washington Post in San Francisco. And Microsoft actually makes a lot of sense as an ideal company to buy TikTok when you think about it, partly because the big tech giant has so far escaped this round of accusations that big tech is getting just too big. But buying the popular video app could also open it up to a deluge of concerns that have barely touched it in the last two decades.
Microsoft may not have enough social media relevance to trigger anticompetitive investigations
The tech company is an entrenched leader in operating systems and cloud computing, but it does not yet have a leading social media platform that rivals Facebook or YouTube or TikTok. The closest Microsoft comes in that market is with its professional networking site LinkedIn, but experts say that is unlikely to put it in antitrust regulators’ spotlight.
“The fact is we don’t have any actual case law that pursues mergers simply because the companies are big,” said Herb Hovenkamp, an antitrust professor at the University of Pennsylvania Law School. “They have to be competitors, for the most part, and have significant market share. ”
Microsoft has been spared as regulators and Congress dig into antitrust concerns with its fellow big tech companies Amazon, Facebook, Google and Apple.
Microsoft is no stranger to antitrust investigations, but it’s been about 20 years since it tangled with the U.S. government over its size and power.
That doesn’t mean the company will be entirely in the clear.
Even if formal investigations don’t pop up, it’s unlikely Microsoft will entirely escape speculation that it is growing too powerful — it is, after all, one of the most valuable companies in the world. And TikTok is an increasingly popular social media app, with about 100 million users in the U.S. alone.
Regulators will likely consider a full picture of the deal, said Gigi Sohn, a distinguished fellow at the Georgetown Law Institute for Technology Law & Policy.
“The question is not just whether Microsoft has other social networks it’s combining, it’s whether the combination of a social network and a cloud business and gaming business could be used anticompetitively,” she said.
It also tosses Microsoft into the fray for dealing with future inquiries on content moderation and Section 230, the Internet liability shield law, she pointed out.
Rep. David N. Cicilline (D-RI), who has been helming the congressional antitrust investigation, told Pivot podcast hosts that Microsoft’s argument is not a new one.
“We hear it from monopolists all the time: We have to be big to compete with the other big company,” he said.
The deal, if there is one, should be reviewed by antitrust enforcers on its merit, he said, and should not be subject to political pressure.
Microsoft is already starting to feel some pressure after messaging company Slack filed an antitrust complaint with European regulators, alleging Microsoft illegally tied its Teams messaging product in with its Office suite, forcing users to install it.
If you can’t buy it, you must build it
Facebook would likely trigger big antitrust concerns if it tried to buy TikTok. But it apparently doesn’t need to make a bid for the company.
Facebook announced Wednesday it is launching TikTok competitor Instagram Reels in the U.S. The tab in Instagram’s Explore page will include video shooting and editing tools and a scroll of videos that is highly reminiscent of TikTok’s own app.
Cat Zakrzewski is on vacation until Aug. 10. We’ll be treating you this week to a slate of guest authors from The Post’s stellar tech team. Enjoy.
Our top tabs
Female lawmakers push Facebook to remove threats and hate speech targeting women.
Rep. Jackie Speier (D-Calif.) will lead a letter to Facebook asking chief executive Mark Zuckerberg and Chief Operating Officer Sheryl Sandberg to take concrete steps to enforce the company’s policies against hate speech.
“It’s well past time for Facebook and all social media platforms to take both online violence against women and gendered disinformation campaigns seriously,” Speier told The Post in a statement. “This is no secret and there is no excuse.”
In addition to asking Facebook to remove posts that threaten candidates with violence, or harass or dox them, the letter pushes the company to “remove manipulated images or videos misrepresenting women public figures.” Facebook declined to remove a manipulated video of House Speaker Nancy Pelosi (D-Calif.) earlier this week.
“Make no mistake, these tactics, which are used on your platform for malicious intent, are meant to silence women, and ultimately undermine our democracies,” a draft of the letter shared with The Post states. The letter cites a recent study from the Wilson Center that found female candidates are more likely to be attacked by politically motivated trolls and bots online than male politicians.
So far more than three dozen members of Congress and global leaders have signed the letter.
Rep. Anna G. Eshoo (D-Calif.) also called for Facebook to remove the Pelosi video in a separate letter. “The video is disinformation, and by leaving it up, Facebook is actively playing a role in disseminating political disinformation,” Eshoo wrote.
TikTok could help fuel Microsoft’s ambitions to dominate artificial intelligence.
Microsoft, which is known for its operating system and suite of enterprise products, may have seemed like an unlikely pick to buy the teen-friendly social media app, Jay Greene reports. But TikTok offers something Microsoft needs: billions of videos.
Right now the tech giant lacks a video service, putting it at a disadvantage to its Big Tech rivals such as Amazon and Google.
“If AI is the new electricity, the fuel that powers these plants is data,” Oren Etzioni, chief executive of the Allen Institute for Artificial Intelligence, a Seattle research firm started by late Microsoft co-founder Paul Allen, told Jay.
Data harvested from TikTok videos could be used for anything from helping brands develop more alluring advertisements or even teaching AI how to read lips, experts tell Jay.
A new bill would ban companies from using facial recognition on customers without their explicit consent.
The legislation, introduced by Sens. Jeff Merkley (D-Ore.) and Bernie Sanders (I-Vt.) follows a recent Reuters report that Rite Aid used facial recognition technology in hundreds of its U.S. stores for nearly a decade without explicit consumer awareness.
The legislation would require private companies and corporations to get written consent from consumers before collecting their biometric data. Failure to do so could open the door for state or consumer lawsuits. Facial recognition technology used by private companies is largely unregulated in the United States. Only three states, including Illinois, have biometric privacy laws on the books.
But the misuse of the technology, which government studies show is less accurate in matching non-White faces, has sparked growing calls from advocates and lawmakers for a halt in the use of the technology.
Privacy advocates praised the legislation.
“The rapid spread of commercial facial recognition poses just as much of a threat to basic human liberty and fairness as government and law enforcement use,” said Fight for The Future Deputy Director Evan Greer in a statement. “We believe most private and corporate uses of facial recognition should be banned entirely, but this new legislation will play an important role in slowing down the unfettered creep of this technology into our daily lives.”
Hill happenings
Sen. Elizabeth Warren (D-Mass.) wants to know whether a data-mining company sold protester data to the police.
The company, Mobilewalla, released a report in June that showed the demographics of protesters based on their location data, as BuzzFeed News first reported. “We have serious concerns that your company’s data could be used for surveillance of Americans engaging in Constitutionally-protected speech.” Warren and Sen. Ron Wyden (D-Ore.), Rep. Mark DeSaulnier (D-Calif.), and House Committee on Oversight and Reform Chair Carolyn Maloney (D-N.Y.) wrote to the company’s CEO yesterday.
They suggested that sharing the cellphone data with any government agencies may have allowed police to evade a Supreme Court ruling that requires police to obtain a warrant for cellphone data first.
Inside the industry
The European Union is launching an investigation into Google’s acquisition of Fitbit.
The E.U.’s antitrust watchdog is concerned the acquisition could give Google even more market power in the online advertising business, CNN reports. The European Union has fined Google over anticompetitive behavior in the past and the company is under investigation in both the United States and Europe.
