Why it matters: As the global internet splinters further, the U.S. and China look set to enter a Cold War-style battle for the hearts and minds of global users and developing nations. In this fight, U.S. nationalism may make a weaker case to the world than the ideal of internet freedom and open networks that the U.S. once evangelized.
Driving the news: President Trump's threat to ban TikTok from the U.S. has fast-tracked an effort to force the video-sharing app's Chinese owners to sell it to a U.S. company (Microsoft is in talks).
Be smart: The move puts other foreign-owned companies on notice that the U.S. intends to favor American-owned businesses in the digital world.
- That's a giant break from a long-established bipartisan consensus that American interests are best served by a U.S. marketplace, online and off, managed as a level playing field.
China started this game — it was the first country to self-isolate from the global internet.
- China controls information flows inside its borders, and its "great firewall" keeps most information the government dislikes from entering the country.
- The Chinese government has ensured that its most widely used search and social services are domestically owned, and its laws now require any internet service to share data with the authorities.
Meanwhile, the EU's new privacy rules have created a different kind of internet zone governed by a stringent set of standards for handling individual user data.
- Last month, a major EU ruling struck down the Privacy Shield, an arrangement between the EU and the U.S. that enabled companies to transfer data into and out of EU nations without risk.
Trump's crackdown on TikTok suggests that the U.S. is now adopting a more China-like perspective on what kinds of actions governments should take toward internet companies, including:
- picking winners and losers among companies based on the whims of leaders;
- insisting that companies make data available to the government for its needs — as Attorney General William Barr's argument for weak encryption does;
- threatening to punish private platforms unless they support political leaders' preferred form of speech regulation.
Yes, but: Concerns over TikTok's willingness to share U.S. user data with the Chinese government are real.
- TikTok says it keeps all such data outside of China and the reach of the Chinese government's laws.
- Many security experts view all Chinese-owned businesses as vulnerable to government interference and intelligence demands.
Our thought bubble: During the Cold War, America's reputational advantage over the Soviet Union as a rule-of-law democracy was regularly undercut by U.S. operations to overthrow governments abroad and American failures to guarantee human rights at home.
- The Trump administration's strong-arming of TikTok threatens to similarly squander the U.S.'s high ground as a champion of fair markets and networks.
What's next: Zoom, the videoconferencing service that's become a pandemic staple, could be the next China-linked company to face the White House's wrath.
Go deeper: Dan Primack interviews White House trade adviser Peter Navarro about the TikTok deal on the Axios Re:Cap podcast
