Mar 23, 2023
Five Key Moments From TikTok CEO’s Combative Hearing in Congress
(Bloomberg) -- TikTok CEO Shou Chew sought to protect his company from a potential US ban or forced sale during a four-and-a-half hour congressional hearing that rarely deviated from the hostile note on which it began.
“Your platform should be banned,” Energy and Commerce Committee chair Cathy McMorris Rodgers said at the opening. “I expect today you’ll say anything to avoid this outcome.”
Rodgers made a point of telling Chew he was under oath and obligated to tell the truth. Other lawmakers repeated that warning during the long-awaited hearing on Thursday, underscoring how little trust there was between the panel and its witness. While that made for a one-note performance, there were several memorable moments:
China made its stance clear beforehand
The most important developments may have happened before the hearing. During a press briefing in Beijing, Commerce Ministry spokesperson Shu Jueting said China’s government would have to approve any sale to a US entity. That statement undermined whatever assurances Chew might have been able to give about how the platform secures US data.
It also added rocket fuel to attacks on the platform from lawmakers, who were already set to excoriate Chew and his company for concerns over data security and content moderation policies as well as the effect of the app on the 150 million people in the US who use it for more than an hour-and-a-half per day on average.
Chew stumbles while playing defense
Chew did a credible job of defending himself and his app in front of a room of largely hostile lawmakers who were intent on questioning his every word, even preventing him from responding in multiple instances. But the executive’s attempted assurances on data security failed to sway members, especially as he gave noncommittal responses to their chief concerns.
Representative Neal Dunn, a Republican from Florida, asked whether Bytedance Ltd., TikTok’s parent, has “spied on American citizens?”
“I don’t think that spying is the right way to describe it,” he said at one point, before answering another question on China’s ability to access US data with, “Not to my knowledge.”
Lawmakers piling on could signal trouble
Key statements came from people who weren’t even in the room. Senator Marco Rubio, a Republican from Florida, took aim at Chew’s alleged “lies and omissions” and said momentum to ban TikTok “is growing.”
Representative Michael McCaul said Chew’s testimony proved that TikTok needed to be sold or banned. The Texas Republican chairs the Foreign Affairs Committee, which has jurisdiction over legislation that would ban the app or force it to be sold. Senator Michael Bennet, a Colorado Democrat, said Chew failed to assuage his concerns during a meeting.
“We would characterize today’s testimony by TikTok CEO Shou Zi Chew in the Beltway as a ‘disaster’ moment that will likely catalyze more calls by lawmakers and the White House to look to ban TikTok within the US if the company does not look to spin-off and force a sale from Chinese parent ByteDance,” Dan Ives of Wedbush Securities said in a note.
Suicide focus leads to tense moment
TikTok’s huge popularity among young people (and voters) prompted concerned questions about its content moderation policies, including whether TikTok’s powerful algorithm serves up harmful content to people who may be dealing with addictions or contemplating suicide.
Maryland Democrat John Sarbanes said young brains aren’t fully developed and are no match for TikTok’s technology.
“It’s not a fair fight, the algorithms are on one side of the screen and human brains are on the other side of the screen,” he said.
Florida Republican Gus Bilirakis played a compilation of TikTok videos about suicide, complete with dramatic music over the room’s speakers, and pressed Chew on whether he had any control over the algorithm.
Chew later told the committee he doesn’t let his children use TikTok. “My kids live in Singapore, and in Singapore, we do not have the under-13 experience,” he said.
Chew says TikTok unfairly targeted
Chew defended TikTok as no different than the other social media giants, saying his company has sought to put even stronger safeguards in place than its competitors due to the intense scrutiny. Lawmakers didn’t seem to buy that argument, citing TikTok’s huge growth in the US.
“A US TikTok ban would benefit YouTube, Instagram and Snap, likely resulting in higher revenue share of the total advertising wallet,” said Emile El Nems, Vice President-Senior Credit Officer for Moody’s Investors Service. “Given the revenue scale of YouTube and Instagram, the TikTok ban creates a smaller revenue opportunity, but it could be materially positive for Snap.”
--With assistance from Brody Ford, Anna Edgerton and Alex Barinka.
©2023 Bloomberg L.P.