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Inside TikTok’s operation to win over Washington

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TikTok has deployed an army of influencers to try to persuade the US government not to ban the app
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With a giant billboard at Washington’s main train station, an army of influencers on Capitol Hill and ad campaigns in the political press, TikTok is pulling out all the stops as it fights for survival in the US capital.

The Chinese-owned video-sharing platform has been on a charm offensive to persuade Washington’s political elite it is a boon for millions of Americans — and not a security threat that needs to be neutralized.

“Hi guys, I’m here outside of Lindsey Graham’s office here in the United States Senate,” greeting card maker @sparksofjoyco told her 90,000 followers in a video filmed at the door of the Republican senator.

“I’m going to be in contact to tell them the impact that TikTok has on my life and my business and share the concerns that you guys have shared in the comments.”

It looked like an innocent enough vignette featuring a TikTok user sufficiently worried by the threat to her favorite app to travel to Washington, although the protest may not have been as spontaneous as it initially appeared.

The influencer had been pictured hours earlier, arm in arm with TikTok CEO Shou Zi Chew. 

The Singaporean executive — dressed-down in jeans and a hoodie — has been ubiquitous on his own platform and in traditional media, ahead of his hotly anticipated appearance Thursday before lawmakers. 

His mission has been straightforward but daunting: to convince the American political class of his platform’s serious efforts at protecting user data. 

Lawmakers and government officials of all stripes have fretted that TikTok’s Chinese owner ByteDance could pass Americans’ data to the government in Beijing and are calling for it to be removed from app stores or sold to a US firm. 

Supporters argue that the platform is no more prone to data breaches than any other apps that collect personal information — and that lawmakers should be working to firm up privacy laws rather than spoiling their fun.

– 43 lobbyists –

TikTok itself has for years rejected its characterization as a threat, but tension between Washington and Beijing, exacerbated by the recent destruction of a suspected Chinese spy balloon, have spurred politicians to get tough.

The app — which recently revealed it has 150 million US users — is already outlawed on all federal government devices, but lawmakers and President Joe Biden are weighing an all-out nationwide ban.

TikTok has deployed 43 lobbyists, including aging but influential former senators from both parties, to argue its case. 

Almost every morning when Washington’s movers and shakers wake up to Politico’s Playbook newsletter, they encounter a message from TikTok that is designed to allay their fears of Chinese surveillance.

“We’re committed to protecting your personal data, while still providing you with the global TikTok experience you love,” the company says.

Lobbying is nothing new in the nation’s capital, where it is common to encounter influence groups in the corridors of Congress, looking for elected officials to court. 

Sarah Bryner, a researcher at OpenSecrets, which tracks corporate lobbying, says advertising in Washington tends to be targeted at political types — primarily lawmakers and their staffers — rather than the general public.

For TikTok, this lobbying operation ran to more than $5.3 million in 2022, according to OpenSecrets.

That is more than Twitter spent for the same purpose and, more importantly, 20 times what the video-sharing platform was paying for lobbying campaigns in 2019.

Whether the lavish budgets will change hearts and minds remains to be seen, but the early signs do not bode well. 

Opening the hearing for TikTok’s boss on Thursday, Republican House Energy and Commerce Committee chair Cathy Rodgers appeared to already have made up her mind.

“Your platform should be banned,” she said. 

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After long peace, Big Tech faces US antitrust reckoning

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US Assistant Attorney General for the Antitrust Division of the Department of Justice Jonathan Kanter speaks at the "Enforcers' Roundtable" panel at the American Bar Association's 2024 antitrust spring meeting in Washington, on April 12, 2024
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After more than a decade of leaving Big Tech largely to itself, US antitrust enforcers have cranked up the heat, with several high-profile cases underway that could radically change the way the industry’s giants do business.

Launched under both the Trump and Biden administrations, five major cases from the Federal Trade Commission (FTC) and the Department of Justice (DOJ) are moving forward against major US technology companies — including two against Google that could see the company split up.

The most recent came in March against Apple by the FTC, which alleges the iPhone maker abuses its dominance of the premium smartphone sector.

Washington had largely remained silent on Big Tech cases since its wars with Microsoft that began in the 1990s and ended in a settlement in the early 2000s, after a bruising battle with the DOJ.

Inspired by moves in Europe and elsewhere, the new generation of cases allege that the practices of tech giants including Amazon and Meta stifle competition, harm consumers, and warrant significant changes in business operations.

The cases are on different timelines, before different federal judges and are based on a wide variety of allegations. With appeals, the lawsuits could drag on as long as a decade.

The first case in the campaign, launched in 2020 against Google over its search engine, could have an initial decision as early as the end of this year.

In the second Google case, also brought by the DOJ, the company is targeted for its dominance of the digital advertising sector. Amazon and Meta meanwhile face cases with the FTC.

The suits have drawn applause from lawmakers, with frustration over the power of big tech companies running high with the public. 

But many in the business community and legal profession have balked, seeing the lawsuits as legally thin or politically motivated.

The heads of the FTC and the DOJ’s antitrust section adamantly stand by their cases, seeing their mission as a means to protect consumers.

“It’s always good to kind of look at the actual facts rather than go off of the vibes,” FTC chair Lina Khan told a conference in Washington, organized by the American Bar Association, in response to her critics.

“We’re really addressing the pain points that affect people’s lives including health care and digital (tech), but way, way beyond that,” she said.

Instead of getting bogged down in legal theory, Khan said the FTC’s cases were “fit for purpose in the year 2024.”

“That means… not relying on outdated assumptions and theories that are clearly contravened with what we’re seeing with our own eyes,” she added.

– Legally creative? –

In an informal survey of 19 top antitrust scholars by University of Michigan Law professor Daniel Crane, a majority of respondents believed the cases would be difficult to prosecute.

“Gathering the overall sense, it’s fair to say that there is an expectation that more of the cases will lose than win,” Crane wrote, with the Google cases seen as the government’s strongest and Amazon as the weakest.

Khan’s critics point to widespread opinions in the legal community that the Biden administration’s cases walk on thin legal ground.

“I’m kind of exasperated by these lawsuits, because they seem highly motivated, rather than based on sober legal and economic analysis,” said Michael Santoro, a professor of management at Santa Clara University, who was not part of the survey.

A senior executive from a tech giant, on condition of anonymity, said that “ultimately they are turning antitrust law upside down.”

Speaking in Washington with her US counterparts, the EU’s competition czar Margrethe Vestager said she wished she had been more on the offensive in her earlier antitrust decisions.

“If I were to redo it, I would have been bolder, because we don’t have a lot of time. Concentration is increasing in every jurisdiction,” she said.

Vestager, in office for almost a decade, has pursued her own wave of cases against tech companies that have been accused of being far-fetched or legally creative.

In its latest tech-related decision, last month the EU hit Apple with a 1.8-billion-euro fine ($1.9 billion) for preventing music streaming services from offering subscription options outside of its App Store.

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Sam Bankman-Fried appeals fraud conviction, 25-year jail term

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Fallen crypto wunderkind Sam Bankman-Fried has formally appealed his conviction and sentence
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Fallen cryptocurrency wunderkind Sam Bankman-Fried has appealed his federal conviction and 25-year jail sentence in a sweeping fraud case, according to a legal filing made public Thursday.

News of the appeal comes two weeks after US District Court Judge Lewis Kaplan set the prison term and ordered Bankman-Fried, known as “SBF,” to pay $11 billion in forfeiture.

Bankman-Fried had soared to the top of the crypto world, becoming a billionaire before age 30 and turning FTX, a small start-up he cofounded in 2019, into the world’s second largest exchange platform.

But in November 2022, Bankman-Fried’s breakneck rise came crashing down, with a deluge of customer withdrawals and revelations that billions of dollars had been illegally moved from FTX to Bankman-Fried’s personal hedge fund, Alameda Research.

He was convicted by a federal jury in New York in November 2023 on seven counts of fraud, embezzlement and criminal conspiracy. 

During last month’s sentencing hearing, Bankman-Fried expressed regret about the firm’s demise, which also affected many colleagues.

“It haunts me every day,” he said. “I made a series of bad decisions.”

But the judge said Bankman-Fried had not fully accepted responsibility.

Bankman-Fried said “mistakes were made, but never a word of remorse for the commission of a terrible crime,” said Kaplan, who characterized the violations as “brazen” and called out SBF for his “exceptional flexibility” towards the truth.

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Corporate climate pledge weakened by carbon offsets move

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Critics say offsets give corporations a free pass to keep polluting without cleaning-up their act
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The world’s main benchmark for vetting corporate climate action has been accused by its own staff of “greenwashing” after allowing businesses to use carbon credits to offset pollution from their value chains.

The ruling by the Science-Based Targets Initiative (SBTi) was slammed as a “coup” on Thursday and has sparked a revolt by staff who want the decision reversed and the non-profit’s CEO and board to resign.

Experts say it could irreversibly damage the credibility of the SBTi, which is partnered with the UN Global Compact and WWF, and is the gold standard for assessing the net zero plans of big business.

An internal letter sent to SBTi leadership, and seen by AFP, said the board’s decision was taken without adequate consultation, defied science, and “resulted in significant harm to our organisation’s reputation and viability.

“We stand ready to support any efforts aimed at ensuring that the SBTi does not become a greenwashing platform where decisions are unduly influenced by lobbyists, driven by potential conflicts of interest and poor adherence to existing governance procedures,” read the letter to SBTi’s CEO and Board of Trustees.

“In the event that our concerns are not addressed, SBTi staff will have no choice but to take further action,” it added, without elaborating on what that would mean.

It was signed by staff from “the Target Validation Team, Target Operations Team, the Technical Department, Communications, Impact and IT, and multiple department heads.”

Comment has been sought from SBTi and the We Mean Business Coalition, one of its main partners. 

– ‘Extremely serious’ –

On April 9, SBTi issued a statement rolling back its previous opposition to the use of carbon credits to offset Scope 3 emissions. 

These occur in the value chain, and represents the lion’s share of the carbon footprints — in some cases more than 90 percent — of most companies.

Carbon credits are generated by projects that reduce or avoid emissions — like renewable energy, tree planting and forest protection — and sold to companies wanting to offset pollution from their activities.

But critics say offsets give corporations a free pass to keep polluting without cleaning-up their act, and their usage to make claims of “carbon neutrality” has become increasingly contentious.

Gilles Dufrasne from Carbon Market Watch, who sits on the technical advisory group to SBTi, said allowing their usage by companies represented a “fundamental U-turn on SBTi policy so far”.

“It is pretty much a coup from the board,” he told AFP, adding at least one member of the advisory group had resigned in protest.

“It’s extremely serious, I’ve never seen anything like it.”

Verification by SBTi allows companies to say their climate plans align with science and the goals of the Paris agreement to limit global warming.

More than 4,000 companies and financial institutions have sought to have their net zero claims verified by SBTi, the nonprofit said.

Dufrasne said the decision was “extremely damaging” to corporate climate responsibility because it sent a signal that companies could just pay someone else if they can’t meet their own targets.

“I’m not sure if SBTi’s credibility can survive this,” he said.

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