TikTok users aren't freaking out over 'disaster' CEO testimony

A tiktok executive testifies before a congressional comittee

March 24, 2023 Updated 10:10 AM PT

The U.S. government may be inching toward a radical restructuring of TikTok, if not an outright ban on the Chinese-owned social media app. But to Jaci Butler, an internet personality and singer with 4 million followers on the embattled platform, the commotion is old hat.

“I’m just kind of shut off from it,” said Butler, 27, from Los Angeles. “I’m like: ‘No, there’s no way it could happen again.’”

And yet it does seem to be happening again. In 2020, then-President Trump — fueled by growing concerns about the app’s data privacy standards and ties to the Chinese government — began pushing for parent company ByteDance to spin off TikTok’s U.S. assets or face a total ban from the country.

Those efforts petered out after courts blocked Trump’s attempt at a ban, but never completely disappeared. Now President Biden is pursuing them again.

The Committee on Foreign Investment in the United States, or CFIUS, has reportedly told ByteDance it has to either sell TikTok or get kicked out of the country. Meanwhile, Congress is considering a wholesale ban on apps China can control, and there seems to be largely bipartisan demand for change.

TikTok Chief Executive Shou Zi Chew testified before a House committee in Washington on Thursday morning, fielding questions about the platform’s data privacy, ties to China and influence over American users.

“ByteDance is not owned or controlled by the Chinese government,” Chew told the House Energy and Commerce Committee. Responding to concerns over user privacy and safety, he added: “We believe what is needed are clear, transparent rules that apply broadly to all tech companies.”

In the eyes of many analysts, the panel signaled imminent crisis for TikTok.

“We see a 3-6 month period ahead for ByteDance and TikTok to work out a sale to a US tech player,” investment firm Wedbush Securities said in a note to clients after the hearing. “If ByteDance fights against this forced sale, TikTok will likely be banned in the US by late 2023.”

“We would characterize today’s testimony... as a ‘disaster’ moment,” the brokerage firm said.

In a statement, TikTok spokesperson Maureen Shanahan criticized lawmakers and referred to the company’s plan (known as Project Texas) to address concerns about Chinese influence by working with the Austin-based tech firm Oracle to store American user data domestically and vet TikTok’s code.

“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,” Shanahan said. “Also not mentioned today by members of the Committee: the livelihoods of the 5 million businesses on TikTok or the First Amendment implications of banning a platform loved by 150 million Americans.“

TikTok creators who spoke with The Times this week described a mix of emotions in reaction to the increasing likelihood of a ban or forced divestment. Some who generate a substantial amount of their revenue on the platform are worried about how they’ll adapt. Others said they’re less anxious, either because they’ve seen it all before or they’re better prepared to adapt.

During Trump’s ban campaign creators on the app were freaking out, said Butler, who joined the app in 2017 (back when it was Musical.ly) and now, through brand partnerships, she makes about 40% of her income on it. “We were all posting our final videos and ‘If this is the last time we see you’ [messages] to our fans.”

TikToker Jaci Butler, with green hair and several necklaces, poses for a portrait.

This time around, she said, the nervous energy the TikTok community displayed in 2020 has been replaced by a more subdued sadness.

“People don’t seem as panicked as the first time,” said Alex Stemplewski, an Orange County-based TikToker known for his photography. “My friends who are creators, they haven’t even brought it up to me. … People are just like, ‘Well, we got so worked up about it the first time we thought it would happen, and it didn’t happen.’”

The tone isn’t the only thing that’s shifted in the years since the first push for a federal TikTok crackdown. Many social media creators and influencers have moved to diversify their online presence, asking their fans to follow them across multiple rival social media sites.

That task has become easier in recent years as American tech companies started launching their own versions of TikTok’s signature format: an endless feed of snappy video clips powered by invisible recommendation algorithms. Creators can now share their TikTok-like content on YouTube Shorts, Instagram Reels and others.

“The first time around that TikTok was potentially being banned was a good wake-up call,” said Stemplewski, 33, who generates more than half of his earnings through TikTok. “It was a reminder that a sound business strategy for me as a content creator was to diversify.”

Emile El Nems, the vice president-senior credit officer for Moody’s Investors Service, said in an email that an American TikTok ban would benefit competitors such as YouTube, Instagram and Snap (which hosts its own TikTok copycat Spotlight).

Yet even if platforms such as Reels and Shorts offer viable alternatives, many creators feel emotionally attached to TikTok, which kicked off the current wave of super-short video stars.

“I’ve had so much fun on it,” said Kelsey Kotzur, a 29-year-old lifestyle and fashion influencer based in Brooklyn. “I’ve learned so much. I’ve been able to tap into an audience that I probably never would have been able to.”

When the Biden administration began hinting that it might pursue action against the company, she began backing her old posts up on Pinterest and YouTube in case one day her phone suddenly stopped letting her open TikTok.

“Are we gonna have to be forced to start over on another app?” she asked. “It’s messing with our creativity. We’re nervous. We’re all on edge, basically, waiting for the other shoe to drop.”

To avoid a TikTok ban, politicians have suggested that parent company ByteDance could instead sell its American operations off to a domestic buyer, though on Thursday the Chinese government said it would oppose a compulsory sale.

It would be a less disruptive change for TikTokers because they’d still have access to the app. Yet such a sale would introduce new questions. For example: How would another owner change TikTok?

“I never thought that my audience would be global, but it is,” Kotzur said, adding that she’s worried a new owner might alter how the app’s content recommendation algorithm works. “I wonder, if it were bought by a U.S. company, if it wouldn’t be so globalized.”

The effect of a sale “really depends on who bought it,” said Butler, the singer. “I guess the concern is if something happens like with Twitter and Elon, you know? How things just kind of spiraled.”

Elon Musk, the tech mogul who runs Tesla and SpaceX, acquired Twitter in October after a protracted will-he, won’t-he dispute with management. Since then he’s laid off employees, faced legal challenges, overseen bugs and outages, floated a laundry list of changes to the site and, at one point, commissioned a system meant to aggressively promote his posts to users.

For many of Twitter’s users, it’s been a warning about what can happen when a popular social media app comes under new ownership.

The renewed effort to ban TikTok has also thrown a wrench into the ambitions of neophyte influencers.

Valeria Fridegotto, a 23-year-old student living in Chicago, started building up her presence on the app over the last few months, rising to popularity in part for her involvement with a “de-influencing” trend. She remembers in 2020 seeing memes on Instagram of TikTok’s music note logo emblazoned on a tomb. Now a TikToker herself, she has a personal stake in the matter.

“I don’t think people really believe that anything’s going to happen,” she said. “I hope people take it a little more seriously — because now that I’m on the inside I’m like, ‘OK, this could drastically change the way I support myself.’”

Los Angeles Times fellow Helen Li contributed to this report.