A TikTok Ban May Be Just the Beginning

Banning products from Chinese hardware companies like Huawei Technologies was one thing. The looming possibility of a U.S. ban on TikTok, by far China’s most popular technology export, is steering this trans-Pacific business battle in a direction that could have an even bigger impact on Chinese software and services companies. It also could accelerate a division of the world’s countries into two tech spheres, one allied with the U.S. and one that accepts and even embraces tech from China.

In the not too distant future, it could mean that some of the most popular apps among U.S. young people are banned—not just TikTok, but also the video-editing hit CapCut, which is owned by the same Beijing-based parent company, ByteDance, and the fast-growing shopping apps Shein and Temu. Also at risk: Americans’ access to Chinese services such as payments app Alipay, and messaging app

WeChat.

There are a handful of bills recently proposed in Congress that could result in a blanket ban of TikTok. One gaining momentum is known as the Restrict Act and is spearheaded by Sens. Mark Warner (D., Va.) and

John Thune

(R., S.D.). Its sponsors include 10 other senators from both sides of the aisle, and it has already received a hearty welcome from the White House. It would give the executive branch, specifically the Department of Commerce, the ability to ban TikTok if it deems it a threat to national security.

TikTok’s countermeasures so far don’t seem to be faring well. On Wednesday, it hosted a press conference at the U.S. Capitol featuring more than 20 TikTok personalities, intended to convince Congress that banning the app, which has 150 million users in the U.S., would be unpopular. That evening, many of the real “influencers”—in Congress—attended a dinner that included about 200 attendees, hosted by venture capitalists and other tech leaders, focused on the tech threat represented by China. 

On Thursday, in a hearing on Capitol Hill, TikTok Chief Executive Shou Zi Chew sought to allay concerns, and emphasized that TikTok helps share American culture and connect small businesses to customers. House lawmakers peppered him with skeptical questions, and showed no signs that they were assuaged.

Those in the U.S. who oppose China’s technological inroads are currently focused on TikTok. But given that the Warner-Thune bill would give the executive branch the power to ban tech in any one of more than a dozen different broad categories—from satellites and AI to e-commerce and cloud-based software—its impact is potentially much bigger. If it passes, there are reasons to believe the authority it grants to the U.S. government will be invoked again in the future.

“This could threaten Alipay, WeChat, Temu, Shein—just go down the list of popular Chinese apps,” says Glenn Gerstell, former general counsel of the U.S. National Security Agency. “And by the way, why stop at China? The bill is not limited to China.”

Mr. Gerstell doesn’t oppose giving the executive branch the power to ban apps and services on grounds of national security. But, he said he doesn’t believe that TikTok constitutes the kind of threat to the privacy and security of average Americans that would justify it being banned—especially if the company follows through with stated plans to make its algorithms transparent and accessible to U.S. authorities.

Apple app store rankings of four popular Chinese apps, monthly

The office of Sen. Warner signaled a scope broader than TikTok when announcing the legislation he co-sponsored: “We need a comprehensive, risk-based approach that proactively tackles sources of potentially dangerous technology before they gain a foothold in America, so we aren’t playing Whac-A-Mole and scrambling to catch up once they’re already ubiquitous.”

During the hearing in Congress, Rep. Cathy McMorris Rodgers (R., Wa.) said, “Make no mistake, this Committee is looking to the future too. America needs to be prepared to stop the next technological tool or weapon China will use for its own strategic gain.”

TikTok stands out among non-U.S. apps in its popularity and importance to American youth culture. As an influential social media service, critics say it is a potential tool for propaganda and influence in ways that, say, e-commerce apps aren’t.

But the other key concern about TikTok applies broadly. U.S. critics say that Chinese law requires Chinese companies to give up whatever data the government requests, whenever it requests it, if it’s deemed essential to national security. A spokeswoman for China’s Foreign Ministry recently denied that her government would collect data in violation of local laws.

This same logic could apply to shopping or payments or messaging apps that similarly gather information about users’ email addresses, phone numbers, location and usage patterns.

A TikTok ban isn’t hypothetical: In 2020, president Trump signed an executive order restricting Americans’ use of WeChat, leading to pushback from corporations and individuals that use the app to conduct business or stay in touch with family.

Hannah Kelley, a research assistant at Washington, D.C. think-tank Center for a New American Security, says she thinks that should something like the Restrict Act pass, it could lead to reviews of a range of other Chinese apps. “The reality is that the end of the day it’s the same man behind the curtain, and there’s cause for concern about that man,” she adds.

Tencent, parent company of WeChat, and Shein both declined to comment for this story. Temu and Ant Financial, which owns AliPay, did not respond to requests for comment.

In his testimony before Congress Thursday, TikTok’s Mr. Chew repeated his company’s assertions that it has never, nor would ever share data with the Chinese government. “Our approach has never been to dismiss or trivialize any of these concerns,” he added. “We have addressed them with real action. We have to earn your trust.”

“Shou came prepared to answer questions from Congress, but, unfortunately, the day was dominated by political grandstanding that failed to acknowledge the real solutions already underway through Project Texas,” says a spokeswoman for TikTok.

The company’s privacy assurances haven’t been helped by its admission in December that members of its own audit and risk control department used TikTok to collect data on two U.S. journalists. TikTok said it fired those involved and changed its internal policies to make this kind of monitoring by members of that team impossible in the future. The incident is now the subject of an investigation by the U.S. Department of Justice.

Bans Are Already Proliferating

In the Restrict Act proposed by Sen. Warner and Thune, it would be up to U.S. intelligence services to determine whether TikTok and other apps are threats justifying nationwide bans. And given the way U.S. allies tend to follow the lead of U.S. intelligence services, there are reasons to believe that any such bans would be copied by countries around the world, from Europe and Australia to Japan and the rest of the Americas.

Of course, China has long banned its people from using many apps from the U.S. and other countries, so there’s an argument to be made that a U.S. ban of TikTok would merely be following China’s lead, in an escalating tit-for-tat of tech protectionism.

“App bans will provide a legitimate basis for other less-democratic countries to seize this example and say, ‘America is doing it, and if America is doing it, that’s why we’re banning this app,” says Mr. Gerstell.

Already, TikTok has been banned on government-issued devices in more than 30 U.S. states, and in the E.U. and Canada. A ban for all users in Montana is advancing through that state’s legislature. And in 2020, in what could be a preview of things to come for the U.S. and other nations, India banned dozens—and later more than 100—Chinese apps after deadly border clashes with China in a disputed area of the Himalayas.

A New Age of App Diplomacy

What happened in India points to broader motivations for banning TikTok. These have less to do with privacy and cybersecurity, and more to do with the new cold war in which the U.S. and China increasingly find themselves. Competition has become as much about economic power and technological superiority as missiles and naval fleets.

“Twenty years from now, the race for technological superiority is wide open. Whoever wins this race will win economic power, and hence political power,” venture capitalist Vinod Khosla recently told my colleague. “This is much broader than national security.”

Mr. Khosla was among the participants in Wednesday’s dinner in Washington, which brought together a bipartisan group of lawmakers who otherwise have little in common, along with tech executives and venture capitalists such as

Peter Thiel.

China’s leaders have long pushed the idea that for it to become a wealthier country, it must move beyond being a leader in manufacturing to being a leader in software, services and AI. With 1.8 billion users worldwide, TikTok stands as an example of what might be possible for a Chinese tech service in the global market. 

Valuations for Chinese startups have reflected the runaway success of TikTok, and the confidence that investors have had that other Chinese apps and services could disrupt rivals in the U.S., according to Kevin Xu, a former White House staffer, venture capitalist and head of global expansion at GitHub, the

Microsoft

code-sharing unit.

If the Restrict Act is passed, that all changes, he said. “For founders and entrepreneurs, it’s time to start recognizing this reality and plan your overseas market expansion activities elsewhere,” Mr. Xu wrote in ‘Interconnected,’ his technology newsletter. “For VCs who invested in Chinese tech startups at rich valuations on the assumption that the US market is up for grabs, it’s time to do an honest markdown of those deals and adjust expectations accordingly.”

For more WSJ Technology analysis, reviews, advice and headlines, sign up for our weekly newsletter.