TikTok, ByteDance spent hundreds of thousands on lobbying Congress

TikTok and its parent company combined to spend greater than $13 million on lobbying federal government officials since 2019 — an effort that appears to have fallen flat as lawmakers push proposals targeting the app’s ownership by a Chinese company and even seek to ban TikTok within the U.S. outright.

Weeks after Republican Rep. Ken Buck of Colorado and Sen. Josh Hawley of Missouri introduced laws that will bar TikTok downloads nationwide, Buck’s staff received a call in February from Michael Beckerman, the pinnacle of the social media company’s U.S. public policy shop, in keeping with an individual near Buck.

Beckerman pushed back on concerns from Buck’s staff that TikTok is harvesting customer data, and advocated for the corporate’s latest initiative often known as Project Texas, this person explained. Project Texas is TikTok’s effort to put its U.S. customer data right into a secure hub managed by the tech giant Oracle, which is supposed to ease U.S. government concerns that the data could possibly be accessed by Chinese parent company ByteDance or members of the ruling party in China.

The lobbying comes amid a sustained effort by TikTok to play down fears raised by lawmakers who wish to ban the app, which has 150 million monthly lively users within the U.S. The corporate has tried to point out it will possibly address concerns about user information without an outright ban, but most lawmakers at a contentious hearing about TikTok this month seemed unconvinced Project Texas would adequately accomplish that.

TikTok CEO Shou Zi Chew told U.S. lawmakers on the hearing that China-based employees at ByteDance can have access to some U.S. data from the app. But he assured them employees would now not have that data once Project Texas is complete.

The sustained lobbying pressure and Chew’s testimony up to now haven’t stifled the trouble on Capitol Hill to sever TikTok’s ties to its Chinese owner or limit access to the app.

Brooke Oberwetter, a spokeswoman for TikTok, didn’t deny any element of this story. She defended the work of TikTok’s team in Washington and said the corporate is trying to handle lawmakers’ privacy and safety concerns.

“Our team in Washington is — and at all times has been — focused on educating lawmakers and stakeholders about our company and our service,” Oberwetter said. “We are going to proceed our work to coach lawmakers and the American public about our progress in implementing Project Texas to handle national security concerns, and we are going to proceed to work with lawmakers, stakeholders, and our peer firms on solutions that address the industrywide problems with privacy and safety.”

Considered one of the leading proposals targeting TikTok is the RESTRICT Act, introduced by a bipartisan group of senators led by Sens. Mark Warner, D-Va., and John Thune, R-S.D.. The bill, which doesn’t yet have companion laws within the House, would give the Commerce secretary the authority to guage national security risks related to certain technology transactions with firms or individuals in a select group of foreign adversary countries, including China. The Commerce secretary could recommend the president take motion as much as a ban.

One other proposal is the DATA Act, introduced by Rep. Mike McCaul, R-Texas. It could revoke protections which have typically shielded creative content from U.S. sanctions. It could also mandate the president impose sanctions on China-based firms that transfer Americans’ sensitive personal data to individuals or businesses in China. The proposal passed through the GOP-led House Foreign Relations Committee along party lines, with Democrats fearing it was rushed.

On the furthest end of the acute is the laws from Hawley and Buck that simply seeks to ban TikTok outright by directing the president to dam transactions with ByteDance.

For the reason that call with Beckerman, Buck has not held back in calling the app a threat to national security. Buck’s staff members responded to Beckerman that they were still concerned in regards to the company’s privacy, cybersecurity and national security policies, the person near Buck said.

One other ally of the Colorado lawmaker said the lobbying money is wasted on trying to alter Buck’s mind. “It’s like they’re lighting their money on fire,” a Republican strategist allied with Buck told CNBC.

One other GOP strategist accustomed to TikTok’s lobbying efforts told CNBC that the corporate’s “last-minute blitz” to lobby Capitol Hill weeks before Chew’s testimony was “amateur hour.” The person said congressional offices at times declined meetings with company representatives, and that TikTok officials didn’t reach out to key lawmakers equivalent to Hawley who’ve targeted the app.

Hawley has not eased his campaign to ban TikTok. He tried on Wednesday to win unanimous Senate support to fast-track his bill. Sen. Rand Paul, a Kentucky Republican who’s now among the many small group of lawmakers from each parties who’ve opposed the trouble to bar access to the app, blocked Hawley’s laws. While there are many lawmakers who have not yet concluded a ban is vital, only a handful have openly ruled it out.

Those that declined to be named on this story did so to talk freely about private conversations and meetings. A Hawley spokeswoman didn’t return a request for comment.

The interaction with Buck’s team represents just certainly one of many instances when lobbyists for TikTok, or its China-based parent company ByteDance, have seen their campaigns fall on deaf ears on Capitol Hill, in keeping with advisors and aides to congressional lawmakers. The indisputable fact that some lawmakers have showed little interest in hearing out TikTok executives is the newest sign the corporate may have more allies in Congress to stop latest restrictions on the app or a possible ban.

Warner met earlier this 12 months with TikTok lobbyists, in keeping with an individual on the gathering on the senator’s office. The Virginia lawmaker and Thune later introduced their bill that will empower the Commerce secretary to take motion against TikTok. The White House has since endorsed the bill and called for Congress to pass it so President Joe Biden can sign it.

Warner’s office didn’t return a request for comment.

TikTok appears to have ramped up its lobbying just ahead of Chew’s testimony in front of the House Committee on Energy and Commerce. The corporate flew TikTok influencers to Washington before the event.

The corporate also had allies in a handful of Democratic lawmakers equivalent to Rep. Jamaal Bowman, D-N.Y. A day before the hearing, he and popular content creators on the app held a news conference to oppose a possible ban.

But in private meetings, a few of those self same influencers told Bowman that there must be regulations passed to guard their data across all social media platforms, including TikTok, while keeping the app intact, in keeping with an aide accustomed to the discussions.

No matter their impact on lawmakers, creators’ pleas to keep up access to TikTok within the U.S. have looked as if it would resonate with many American users who see the app as a source of entertainment, information and even income. During and after the hearing, TikTok users shared clips of lawmakers asking basic questions of the CEO, deriding Congress for what they saw as a lack of information of the technology.

But based on the five hours of tense questioning by members of each parties on the hearing, the creators’ appeals didn’t appear to offset the deep concerns lawmakers shared in regards to the app’s connections to China, together with the addictive and potentially harmful qualities of its design.

“I do not think they won over any lawmakers,” Alex Moore, communications director for Rep. Jan Schakowsky, D-Unwell., said of TikTok’s pre-hearing lobbying. Bringing in TikTok creators to amplify the corporate’s message “hasn’t swayed my boss,” Moore added.

Still, Moore said his office has been hearing quite a bit from constituents because the hearing. Before the testimony, calls about TikTok would “trickle in,” he said. But after, “our phones were ringing off the hook,” with the vast majority of callers voicing opposition to a TikTok ban.

“We heard overwhelmingly that is not what our constituents are excited by,” he said.

While often a call like that “starts out hot,” Moore said constituents would are inclined to calm down once staff explained that Schakowsky wants comprehensive privacy laws in order to not “let other firms off the hook” for similar data practices.

Schakowsky told CNBC immediately after the hearing that there’ll still likely be “further discussion” about methods to address the concerns directly related to TikTok’s Chinese ownership. But Schakowsky, who co-sponsored the bipartisan privacy laws that passed out of the committee last Congress, said she hopes the hearing brings renewed momentum to privacy protections that will apply to other large tech firms as well.