Source: Politics<\/p>\n
TikTok CEO Shou Zi Chew was certain to face a blistering onslaught when he testified before the U.S. Congress.<\/p>\n
And so as he prepared to face the powerful House Energy and Commerce Committee, Chew enlisted all the right people to help him get ready.<\/p>\n
The Singaporean executive was prepared by former committee staffers and aides to Speaker Kevin McCarthy<\/a> and former Speaker Nancy Pelosi<\/a>. He received counsel from Andrew Wright, former director of legal policy for the Biden-Harris presidential transition and now a partner at the well-connected law firm K&L Gates. Ahead of the March 23 hearing, Chew scheduled meetings on the Hill with help from several former lawmakers, including Republican Jeff Denham, Democrat Bart Gordon, a former E&C member, and Joe Crowley, who was once a senior member of Democratic leadership.<\/p>\n But despite hiring a large group of savvy friends, Chew and his company failed to win over the panel. The sheer number of seasoned Washington operatives and firms in TikTok\u2019s employ was no shield against a barrage of bipartisan denunciations<\/a>.<\/p>\n TikTok\u2019s battle for survival has become a vivid study in how a wealthy, foreign-owned corporation can use its financial might to build an impressive-looking network of influence \u2014 and also in the limitations of what lobbying can do to protect a company at the center of a geopolitical firestorm.<\/p>\n The campaign to save TikTok has been years in the making. A POLITICO investigation revealed an effort by TikTok and its parent company, ByteDance, dating back to at least 2018, long before concerns about TikTok\u2019s Chinese ownership reached their current pitch. Interviews with more than two dozen people, including lobbyists and lawmakers, in the United States and Europe illuminated the architecture of a lobbying apparatus that has moved TikTok and its parent company closer to institutions of government, including European lawmakers, leaders of both American political parties and even the White House.<\/p>\n In 2019, one recruiter representing TikTok described the company\u2019s goal in superheroic terms: The recruiter said it wanted to build a \u201cTeam of Avengers,\u201d according to one Washington lobbyist approached for a job, who like a number of others was granted anonymity to discuss sensitive conversations with a powerful company.<\/p>\n TikTok has tried to overcome some firms\u2019 reservations with a willingness to pay handsomely. The company recently approached a second Washington lobbyist who works for Big Tech clients and, according to the lobbyist, asked flatly: \u201cHow much will it take?\u201d The lobbyist declined the overture.<\/p>\n But that approach has worked on others in Washington, London and Brussels, where the company is facing serious though seemingly less existential regulatory threats<\/a> than in America.<\/p>\n In Washington alone, about three dozen people lobbied the federal government for ByteDance and TikTok in the last quarter of 2022, including former senators and House members, according to disclosure reports.<\/p>\n Across the Atlantic, TikTok\u2019s public affairs staff includes just under 40 people in Europe, spread between cities including Brussels, London, Dublin, Paris and Milan. To lead its European strategy, the company in late 2019 recruited Theo Bertram, a former top lobbyist for Google and a veteran adviser to the U.K. prime ministers Tony Blair and Gordon Brown. In the fall of 2020, it appointed Caroline Greer, a seasoned lobbyist with experience lobbying for telecom companies and U.S. cloud firm Cloudflare, to head its Brussels operation.<\/p>\n And in Washington in recent months, the company finally succeeded<\/a> in hiring SKDK, the public affairs firm that boasts an imposing Democratic alumni network, including senior figures in the Biden administration. The firm turned down an initial overture from TikTok during the 2020 campaign, according to two people familiar with the firm who explained that the decision was due to concerns around the company\u2019s ties to China. Now, in a moment of existential danger for TikTok, SKDK has agreed to help with communications on policy matters.<\/p>\n The company has also enlisted Michael Leiter, the former director of the National Counterterrorism Center, as an important part of its legal team, according to four people familiar with the matter, including a TikTok spokesperson. Leiter, a partner at the law firm Skadden, is helping deal with the Committee on Foreign Investment in the United States, an interagency board that recently told TikTok that it must separate from ByteDance if it wanted to avert an American ban.<\/p>\n The app remains a pervasive presence in the political world, even as the prospect of a U.S. ban grows more realistic by the week. Indeed, the app is so popular that the White House has repeatedly acknowledged it as an unavoidable channel for political communications.<\/p>\n Ahead of Biden\u2019s State of the Union address in February, White House senior adviser Anita Dunn pointed allies toward the app as an influential messaging tool during a \u201cWomen\u2019s Community Engagement Update\u201d hosted by the White House Office of Public Engagement. Dunn is a founding partner of SKDK and under the White House ethics policy, she is currently barred from participating in matters involving SKDK.<\/p>\n During the call, Dunn told participants that the White House wanted people to brandish the administration\u2019s accomplishments on social media, according to two people on the call.<\/p>\n Of course the White House could not use TikTok, Dunn said. But she suggested that if people on the call were users of the app, then they should share parts of the president\u2019s speech on TikTok.<\/p>\n Andrew Bates, a White House spokesperson, said there was nothing in Dunn\u2019s remarks that did not reflect what the administration had openly maintained \u201cfor years: that we work with outside supporters to spread our message on the major social media platforms, including TikTok.\u201d<\/p>\n The White House declined to address other questions about the administration and TikTok, including whether the administration believed TikTok was deliberately hiring advisers with links to the Biden operation and whether Dunn had been aware of SKDK\u2019s decision to work for the embattled company.<\/p>\n The political tide is running against TikTok and ByteDance, both in the United States and in Europe. The company has not managed to assuage lawmakers\u2019 worries that TikTok\u2019s ownership could make American and European user data vulnerable to the Chinese Communist Party, a charge both the company and the Chinese government have denied. Last week, a Chinese Foreign Ministry spokesperson, Mao Ning, said the government had never asked companies to \u201ccollect or provide data, information or intelligence located abroad against local laws.\u201d<\/p>\n Washington remains unconvinced. Momentum is building on Capitol Hill for legislation that could allow Biden to ban the app. In the European Union, company executives were blindsided by the news that TikTok had been banned from the work devices of EU Commission staff.<\/p>\n \u201cAt no point was it ever said that: \u2018hey, we have this investigation going on, we\u2019re looking into this, you might want to be aware, we\u2019ll get in touch,\u2019\u201d Greer said.<\/p>\n In a statement to POLITICO, TikTok spokesperson Brooke Oberwetter said the company was \u201cfocused on educating lawmakers and stakeholders about our company and our service,\u201d and pointed out that other tech companies spend far more on lobbying than TikTok does.<\/p>\n \u201cWe plan to continue briefing members of Congress about our company and about the details of our robust and comprehensive plans to address national security concerns,\u201d she said. \u201cWe work to engage policymakers and stakeholders across the political spectrum on issues that are important to our business and to the diverse and vibrant community on our platform.\u201d<\/p>\n In that endeavor, the company has one great advantage: the sheer popularity of its product.<\/p>\n A person familiar with TikTok\u2019s strategy said that in conversations with Democrats on the Hill, the company has privately compared banning the app to \u201cProhibition,\u201d the early 20th-century effort to outlaw alcohol \u2014 like TikTok, a highly addictive consumer product seen as dangerous by federal lawmakers. The ban on alcohol lasted about 14 years and generated enormous backlash from voters. Oberwetter disputed that this was an approved part of the company\u2019s message.<\/p>\n But the implication seems clear enough: more than 150 million users in the U.S. enjoy TikTok\u2019s hypnotic interface, and many could vote in 2024 when Biden and members of Congress are on the ballot.<\/p>\n TikTok and ByteDance have spent more than $16 million on federal lobbying in the U.S. since 2019, according to public disclosures. But the total that the company has expended to save its existence in the United States is almost certainly dramatically higher. That figure does not include lobbying at the state level, or the company\u2019s spending on PR firms and in-house communications staff responding to its crisis.<\/p>\n TikTok and ByteDance\u2019s registered lobbying spending is still dwarfed by that of Meta, a powerful competitor which has been lobbying in Washington for more than a decade. In 2022, TikTok and ByteDance spent just about $5.9 million compared with over $23 million for Meta (though both companies dwarf Twitter, which spent about $1.7 million).<\/p>\n But TikTok\u2019s operation is only just reaching the rapid-growth phase. Getting its influence network to this point took years. The project began even before the app was called TikTok, when ByteDance realized it needed help from people who understood the inside of the government bodies that would soon be regulating it.<\/p>\n So the company set out on a recruitment drive in Washington. A job description from the time, obtained by POLITICO, noted that ByteDance was searching for someone who could \u201cSource and manage outside counsels and lobbying firms,\u201d among other responsibilities.<\/p>\n The qualifications for the job stated that \u201cExperience in internet industry and regulatory bodies is preferred, e.g. EU Commission, FTC\u201d and \u201cExperience with NGOs, international organizations, industrial associations would be a big plus.\u201d<\/p>\n In early 2019, TikTok brought on Eric Ebenstein as director of public policy. It may have been a telling choice for a company anticipating scrutiny of its ownership: Ebenstein previously worked for the Chinese drone manufacturer DJI and would have been familiar with some of the political challenges of operating in the United States. Before and after Ebenstein\u2019s departure, DJI has faced criticism from U.S. officials<\/a>, including allegations that it took money from the Chinese government and that its drones could be tools for spying<\/a>. DJI has denied taking direct government funding<\/a> and said it could not control how customers use its products.<\/p>\n But Ebenstein was only the start. In 2019, the company intensified its outreach to staffers across the tech sector, doing a combination of recruitment pitches and conversations that seemed more like intelligence-gathering. At a moment when other social media companies, including Google and Facebook, were many years into struggling with the federal government, ByteDance was doing research of a more basic kind, according to the first lobbyist, who heard the \u201cTeam of Avengers\u201d sales pitch at the time.<\/p>\n \u201cThey were looking to understand how American tech companies were organized, what sort of consultants they hired, who controlled those consultants, how that reported up into the executive structure,\u201d said the Washington lobbyist, who kept contemporaneous notes of at least one of the person\u2019s conversations with the company.<\/p>\n In 2019, it was looking for someone who could \u201cBuild strong relationships with government officials,\u201d according to the lobbyist\u2019s notes of a conversation with a recruiter.<\/p>\n A series of high-profile hires showed the company was making headway. In 2020, it enlisted Michael Beckerman, a former congressional aide who led the Internet Association trade group, to take a leading role in building a Washington influence machine. The company also hired Crossroads Strategies, a D.C.-based bipartisan firm. Former senators Trent Lott, a Republican who was the Senate majority leader, and John Breaux, a conservative Democrat from Louisiana, would make the company\u2019s case, among others. The firm has been paid $910,000 since 2020, according to public records.<\/p>\n With the 2020 election approaching, the company seemed to want to hedge its bets on the outcome. CFIUS had reportedly begun<\/a> an investigation into the company. Early that year, ByteDance succeeded in hiring David Urban, a prominent Republican lobbyist who was also an adviser to Donald Trump\u2019s 2020 reelection campaign. Urban first worked as an outside consultant and then later as an executive vice president at ByteDance. (He is now an outside consultant again.)<\/p>\n But the company needed Democratic help, too, since the party figured to have significant power on the Hill after 2020 even if Trump were reelected.<\/p>\n Fears about TikTok\u2019s foreign ownership were growing, not receding, as the campaign advanced. Not only did SKDK, the Biden campaign-linked firm, reject an overture to work for TikTok, but in the summer of 2020 it instructed employees to delete the app from their phones as a security precaution. Memories of foreign cyber-intrusion in the 2016 campaign, when Russian hackers breached the Democratic National Committee, were still fresh in the minds of Democratic campaign operatives.<\/p>\n Around 2020, the second Washington lobbyist, who was then in touch with the company, said that TikTok was in search of someone who could push back on the narrative that they were collecting data and giving it to China.<\/p>\n In 2021, a third Washington lobbyist, who is a Democrat, recalled being approached by a TikTok consultant with the message that the company was willing to put a lot of money on the table for Democratic talent.<\/p>\n Since the 2020 presidential election, TikTok has had considerably more success enlisting lobbyists and firms with close ties to the Democratic Party. In addition to SKDK\u2019s recent about-face decision to work for TikTok, the company has enlisted FGS Global, another PR agency with ties to Biden\u2019s political network. It also retained the public relations giant Edelman, a powerhouse firm with relationships across both parties. Jamal Brown, former national press secretary to the Biden campaign who more recently was deputy press secretary at the Pentagon, is now a company spokesperson.<\/p>\n Many of those working for TikTok and ByteDance, including SKDK, FGS, Edelman, Crowley, Denham, Gordon, and Leiter, the former counterterrorism official, did not respond to inquiries or declined to comment on the record.<\/p>\n ByteDance\u2019s lavish spending goes beyond generous salaries and retainer fees for lobbyists. It also extends to schmoozing, particularly in Europe where there is less fear among politicians about being seen as cozy with Chinese companies.<\/p>\n Indeed, in Brussels, lawmakers in the European Parliament and officials of the EU Commission, the EU\u2019s executive arm, describe TikTok\u2019s team as articulate and ingratiating, and careful to strike a more conciliatory tone than the representatives of American companies like Twitter, Facebook and Google. They had an agenda to push, but they would not make aggressive threats about EU laws like the Digital Services Act.<\/p>\n \u201cTheir lobbying was not confrontational compared to American companies,\u201d one official said. \u201cThey always said they wanted to cooperate.\u201d<\/p>\n In Europe, at least, TikTok has used the aversion toward American Big Tech to its advantage. Bertram, the vice president of government relations and public policy for Europe, told POLITICO the question of TikTok\u2019s ownership \u201cfeels like a red herring \u2026 As Europeans, I don\u2019t think we share the belief that every big company needs to be a Silicon Valley tech company.\u201d<\/p>\n Earlier this year, Chew, the TikTok CEO, appeared at the World Economic Forum in Davos and toured Brussels to meet with European policymakers. In Belgium, he met with around two dozen European lawmakers and policy officials from the EU Commission in a closed-door session at De Warande, an elite members-only club located near Belgium\u2019s Royal Palace and the American embassy. He snapped pictures with tech-focused politicians<\/a> like Dita Charanzov\u00e1, a vice president of the European parliament, and Andreas Schwab<\/a>, a German member who negotiated the Digital Markets Act, a law to limit the market power of large tech companies.<\/p>\n The TikTok executive tried to send a reassuring message at the event. Even as the company has confronted growing political hostility in the U.S., many European lawmakers have continued to see the company in less adversarial terms \u2014 as a social media goliath that needs to be regulated, but perhaps not a uniquely problematic one.<\/p>\n Chew was \u201cvery clear about the strong concern in the U.S. about China,\u201d said Schwab, adding: \u201cThey wanted to explain a bit about their legal structure, their precaution measures, knowing that there might still be doubts.\u201d<\/p>\n After doing a speech about TikTok\u2019s business model, the CEO wanted to listen, said Charanzov\u00e1. \u201cHe wanted to understand concerns in Europe.\u201d<\/p>\n Chew\u2019s mission of reassurance seemed to go well, or at least that was the impression of TikTok\u2019s lobbyists in Europe.<\/p>\n The company was stunned when scarcely a month later the EU Commission banned TikTok from the government phones of commission employees. The measure sparked a domino-like effect across Brussels where the EU Council \u2014 the institution representing the 27 EU governments \u2014 and the European Parliament quickly followed suit, along with national governments including those of Belgium and the United Kingdom.<\/p>\n TikTok\u2019s team immediately contacted the EU institutions to try to understand what had happened and hopefully to reverse the policy. The company didn\u2019t hear anything for several weeks before the Commission said in late March it had sent the company a letter and was open to a meeting. At the end of the month the device ban was still in place.<\/p>\n \u201cWe\u2019ve been trying to reach out to the institutions to understand what the problem is and to see what we can do to mitigate it and to tell our story, as well as hopefully to get unbanned, since it has been presented as a temporary suspension,\u201d said Greer, the Brussels lobbyist.<\/p>\n To address those concerns, the company unveiled a European plan that had been in the works for several months to secure European users\u2019 data. TikTok said it would operate in the coming years<\/a> three data servers in Ireland and Norway and work with a European security company to audit cybersecurity and data protection controls under \u201cProject Clover.\u201d The company sent its top executives to tour European capitals such as London, Paris and the Hague to present the plan, which mirrors a similar idea presented in the U.S. and branded \u201cProject Texas.\u201d<\/p>\n \u201cWe can\u2019t control the geopolitical situation, but we can continue with the work that we have been doing to help bridge that trust deficit, if it\u2019s there,\u201d said Greer. \u201cWe\u2019re not running away from this.\u201d<\/p>\n But TikTok doesn\u2019t seem to have an option. And the power of its lobbying, PR and legal operations is being put to the test in other, even more strenuous ways.<\/p>\n The Irish data protection authority is set to decide on its investigation on TikTok\u2019s data transfers to China. TikTok will also have to open up about its recommendation algorithm and show the EU Commission how it limits a range of problematic issues like cyberbullying, disinformation and illegal content or face multi-million euro fines under the Digital Services Act as soon as this summer. The EU Commission could potentially order a large fine or a temporary banning of the app if it repeatedly and seriously infringes on its obligations.<\/p>\n For now, the company is projecting confidence that it can halt any broader ban in Europe \u2014 one that would disrupt its relationship with consumers and not just government employees. Bertram said using the app was a matter of \u201cfreedom of speech for the public.\u201d<\/p>\n \u201cYou\u2019d have to have a very strong legal basis to ban any app in any country in Europe,\u201d he said in an interview.<\/p>\n In Washington, the company is trying to meet with a wide range of lawmakers to head off legislative action that would ban the app. But TikTok\u2019s core strategy is in a precarious state. The company had been arguing that Congress should defer to the Biden administration and let the regulatory process take its course \u2014 a way of sapping momentum for potentially stronger congressional action.<\/p>\n But the CFIUS decree insisting on a separation between TikTok and its Chinese owners made plain that punting the issue to the executive branch would not necessarily guarantee gentler results for the company.<\/p>\n The company\u2019s best hope in Washington at this point may be drumming up enough indignation from its vast horde of users to give pause to elected officials \u2014 maybe even including the president \u2014 about cracking down on a cherished app in the run-up to a national election. And there are Democrats who sincerely worry about enraging the young voters the party depends on.<\/p>\n Rep. Jamaal Bowman<\/a> of New York, a progressive Democrat who opposes a TikTok ban, told reporters last week that the seemed driven by xenophobia and favoritism toward American tech giants. But he noted the political context, too: \u201cYoung voters were the reason why we were able to keep things decent, like almost even in 2022, in terms of the House.\u201d<\/p>\n Those arguments have not resonated with the lawmakers most determined to eliminate the app from American life. When TikTok\u2019s Washington team met recently with the leaders of the new House select committee on U.S.-China relations, it made no headway in convincing them that there were reasonable precautions it could take to protect Americans\u2019 data from the Chinese Communist Party.<\/p>\n \u201cThe CCP ultimately having access to user data and control of algorithms and potentially content on the platform is deeply problematic,\u201d said Rep. Raja Krishnamoorthi of Illinois, a Democrat who has introduced legislation to ban TikTok.<\/p>\n The company is still looking for more help, including a head of policy communications in Brussels. In the U.S., TikTok is recruiting public policy managers and ByteDance is currently accepting applications<\/a> for a \u201cGlobal Head of Policy Communications.\u201d The person in that role will be charged with developing communications strategy for both policymakers and users. The gig, focused on government relations, requires \u201csignificant experience\u201d on communications and with complicated regulatory, legislative, and policy matters.<\/p>\n That new head of policy communications must also have \u201csignificant experience\u201d with \u201ccrisis issues.\u201d<\/p>\n