TikTok’s Chump Change Strategy Isn’t Fooling Anyone

“Drag a hundred-dollar bill through a trailer park, you never know what you’ll find.”
James Carville

According to CNN Business, the U.S. government is considering banning the use of Chinese social media apps like TikTok.  The review is due to an abundance of caution about who gets access to the data scraping and user profiling, plus the techniques of bad actors using bots connected to social media to amplify the emotional contagion long associated with these apps and studied by companies like Facebook.

We have seen bad actors field bot armies using Twitter routinely, especially the 50¢ Wu Mao Army paid to influence public opinion of the ruling Chinese Communist Party and the Google-backed fake bot army used to interfere in the European Parliament’s Copyright Directive.  The press called out the fakery by Google in exposes by the Times of London and Frankfurter Allgemeine Zeitung among others.

helga tweet
Tweet from MEP Helga Truepel

It also must be said that someone mustered a bot army to engage in creating fake enthusiasm regarding attendance at the Trump campaign rally in Tulsa.  Love him or hate him, the fact that this interference could be manipulated through TikTok, particularly in the way it was done, is reminiscent of other bot army attacks.  This time it was a campaign rally, but what will it be next time?  And even if you don’t support Trump, ask yourself how you will feel when it is done to your candidate or an issue you care about?

During the Obama Administration, Professor Cass Sunstein (then Administrator of the White House Office of Information and Regulatory Affairs) cautioned the government about using social media of any kind for purposes of making policy.  One reason is how susceptible it is to fakery because the private companies that own these networks do more or less nothing to make them secure.  As was demonstrated by the press covering the European Copyright Directive, private companies use social media manipulation to advance their commercial goals and their lobbying which has a second order effect on public policy.

Sunstein’s reasoning is well articulated in a 2010 memo where he cautioned the Obama Administration against relying on social media for making policy through techniques like casual polls:

“Because, in general, the results of online rankings, ratings, and tagging (e.g., number of votes or top rank) are not statistically generalizable, they should not be used as the basis for policy or planning.”

In a post-Cambridge Analytica world where social media platforms not only are ubiquitous but also have earned the distrust of policy-makers and voters as well as parents, Sunstein’s old admonition is especially prescient-but he could have added “easy to fake.” This would apply to the new boiler rooms of fake Twitter accounts with distorted ratios of tweets to followers, or followed accounts to likes–such as the infamous Internet Research Agency, and now it appears the same techniques are being used by TikTok.

FBI Director Christopher Wray told the Hudson Institute on July 7, 2020:

[L]et me be clear: This is not about the Chinese people, and it’s certainly not about Chinese Americans. Every year, the United States welcomes more than 100,000 Chinese students and researchers into this country. For generations, people have journeyed from China to the United States to secure the blessings of liberty for themselves and their families—and our society is better for their contributions. So, when I speak of the threat from China, I mean the government of China and the Chinese Communist Party….

China is using social media platforms—the same ones Americans use to stay connected or find jobs—to identify people with access to our government’s sensitive information and then target those people to try to steal it.

India has banned a long list of China-based social media apps including TikTok.  This is in part because India is currently engaged in an underreported shooting war with China on its borders which Pakistan could join any minute in a China-Pakistan alliance.  (That incursion should come as no surprise to anyone who follows the history as China also attacked Indian territory in 1962 while America’s attention was distracted by the Cuban Missile Crisis.  The 1962 war in which 2,000 died also related to China’s annexation of Tibet, a tragedy that continues to this day and later inspired Adam Yauch’s passion for the Tibetan Freedom Concert.)

If you think it’s an accident that China chose this moment to crack down on Hong Kong, then you should include Pollyanna on your summer reading list.  And if you don’t think Taiwan could be next, then you wouldn’t have ordered two carrier strike groups into the South China Sea.  (And you probably wouldn’t have built military bases on coral reefs, either.)

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The question is will the U.S. follow India’s direction, and it looks like America is at least considering following India’s example.   As Secretary of State Pompeo said recently to CNN, “people should only download the app ‘if you want your private information in the hands of the Chinese Communist Party.’”

Mindful of the existential effect getting banned in the U.S. could have on Bytedance’s IPO aspirations for the company, TikTok of course has pushed back, because this is a problem solved by the payment of money, life changing to TikTok leadership, but chump change to the CCP:

“TikTok is led by an American CEO, with hundreds of employees and key leaders across safety, security, product, and public policy here in the US,” a TikTok spokesperson said in a statement following Pompeo’s comments. “We have no higher priority than promoting a safe and secure app experience for our users. We have never provided user data to the Chinese government, nor would we do so if asked.”

Now see, that’s just not the way they want to go with this.  First of all, if the CCP has the same relationship with TikTok parent Bytedance as they have with the other leading surveillance companies in China, TikTok wouldn’t need to “provide” data to the Chinese government–the CCP probably already controls it back in China.  And maybe they would not be asked, but they would be ordered to turn over user data.  This is called assuming facts not in evidence.

Bytedance founder Zhang Yiming has accomplished the impossible–getting a puff piece in HITS and also making the top 100 list of the Chinese Communist Party.

According to the South China Morning Post:

“Andrew Collier, managing director at Orient Capital Research, said the publication of the list, which comprises mostly founders of large firms, was indicative of Beijing’s increased focus on private firms as it seeks to boost the influence of the party in the sector.

“Xi Jinping has been very active in increasing state control through dual appointments and rotating positions between firms, which helps to lock down favoured corporate chieftains,” he said.

Given the influence of the CCP over public companies, like CCP members Jack Ma and Pony Ma, it shouldn’t be surprising that China’s President-for-Life Xi Jinping doesn’t like his public companies being audited by U.S. public accounting firms and held to the same standards as all the other public companies.  You know, Sarbanes Oxley and all that jazz. So it’s virtually impossible to confirm if TikTok is telling the truth absent a good old fashioned grand jury.

Bloomberg China

In the great tradition of China’s lobbying efforts in the U.S. and now in Hong Kong, it is true that TikTok has been busily hiring highly paid Americans to deflect attention on the company’s U.S. operations.  This includes Michael Beckerman (call sign “Shoe Man”), the stylish former head of the Internet Association, who still seems to be looking for a role in a Zoolander sequel.

Michael Beckerman

TikTok also hired former Playboy and Disney executive Kevin Mayer as the CEO of the U.S. company.  When Mr. Mayer gets his CID, there should be some interesting material there as if there is a story as Secretary Pompeo expects, it is Mr. Mayer who will have some answers.  Of course, a U.S. Attorney may skip the CID and just impanel a grand jury to investigate TikTok’s crimes, if they haven’t already.  Or we could be back in FISA-land for a counterintelligence investigation if TikTok tries hard enough.

As FBI Director Wray said:

We’ve now reached the point where the FBI is opening a new China-related counterintelligence case about every 10 hours. Of the nearly 5,000 active FBI counterintelligence cases currently underway across the country, almost half are related to China. And at this very moment, China is working to compromise American health care organizations, pharmaceutical companies, and academic institutions conducting essential COVID-19 research.

I wonder how frequently Mr. Beckerman and Mr. Mayer change SIM cards?

 

 

 

How Much is a Song Worth to Spotify Employees?

In case you were wondering what the value of songwriting is to Spotify, I think you can measure it pretty directly by the perks they hand out to their employees.  I’m sure creators are glad to provide the value that takes care of these folks–while they scrape for every fraction of a penny in Spotify’s many lawsuits.

Employee Benefits and Perquisites

Additional benefits received by our Swedish employees, including Messrs. Ek, Söderström, and Norström, include private healthcare, accident insurance, life and long-term disability insurance, travel insurance, and parental leave. Additional benefits received by our U.S. employees, including Mr. McCarthy and Ms. Ostroff [who has a $1,000,000 base salary], include medical, dental, and vision benefits, medical, and dependent care flexible spending accounts, short-term and long-term disability insurance, basic life insurance coverage, and parental leave. These benefits are provided to our named executive officers on the same general terms as they are provided to all of our full-time employees in the applicable countries.

We design our employee benefits programs to be affordable and competitive in relation to the market, as well as compliant with applicable laws and practices. We adjust our employee benefits programs as needed based upon regular monitoring of applicable laws and practices in the competitive market.

We do not view perquisites or other personal benefits as a significant component of our executive compensation program.

And then there’s the cash and stock, like the “Chief Content Officer” who must have line responsibility for the licensing incompetence and goal post moving:

Ostroff

Ek Covid

 

Fair Trade of Music Campaigns for the New Reciprocity for Artist Rights (#irespectmusic)

I cannot tell you the number of times U.S. artists have said to me, “I don’t need to join SoundExchange, I’m already a member of BMI.”  (Or ASCAP.)  Then I have to explain to them why SoundExchange collects an entirely different royalty–for the performance of the sound recording not the song.  It’s SoundExchange for recordings, PROs for songs.  Say it like a mantra.  It is a testament to the decades of propaganda from the National Association of Broadcasters and especially SiriusXM that has kept U.S. artists in the dark.

Strangely–and I’m being sarcastic–I never get this question from artists who are not Americans.  They are very aware of the performance royalty for sound recordings.

What neither the US nor the UK artists know very often is that when an American artist is played in the UK, the US artist receives no royalty due to decades-old trade rules.  But when a UK artist is played in the US, the UK artist receives their full royalty from SoundExchange as a matter of law.  A new organization called the Fair Trade of Music campaign  wants to change that so that artists are treated the same in the UK regardless of where they call home.

Why do we care?  We care because Fair Trade of Music estimates that U.S. artists lose about $330,000,000 each year due to this lack of fairness and reciprocal treatment.

We care because due to COVID-19, live music income has collapsed to zero or near zero.  Public performance income from SoundExchange is one of the few income streams left that American artists can count on.  And this is not a Yank thing.  The idea that American artists are generating income that is denied to them because of ancient trade laws is just as maddening to their sisters and brothers among artists in the UK as it is to the Americans.

We care because fixing this inequity is not a zero sum game.  UK artists should not make a penny less if US artists get their rightful share.  The money is already being paid and the rates are already determined–it’s just that the payment of the money for US artists must be redirected.

We care because we have a chance to fix the ancient trade rules that perpetuate this inequity.  There are a lot of trade rules about many different products and services including the rules for these payments to American artists.  Those rules can be changed by vehicles like the upcoming UK/US trade agreement.

Right now the focus is on the UK because we have a vehicle to take a big step toward fixing this treatment (which is true in many other countries, too).  That vehicle takes the form of the upcoming UK/US trade agreement which may be signed in the next few months.  Even if it isn’t actually signed it will be negotiated, and the outlines of the UK/US deal will likely be much better defined before the end of the year. (This “bilateral” trade agreement with the UK must be put in place due to the UK leaving the European Union.)

We need to be at that table.  Now is the time to take action.

If you want to sound off to the powers that be about fixing this loophole, you can sign a petition to support fair treatment at the Fair Trade of Music site.  I don’t often ask you guys to do something like this, but I really think you should sign up.

As Ann Richards said, if you’re not at the table, you’re on the menu.

 

 

Run Through the Jungle: Is Google Mounting a Challenge to @SpeakerPelosi?

Pelosi China

There’s a quiet rumble happening in San Francisco due to California’s “jungle primary” rules.  House Speaker Nancy Pelosi is facing an opponent from the left.  Yes, you read that correctly.  In the jungle, the top two vote getters can go into sudden death regardless of party affiliation, and the Speaker now has an opponent who is a nominal Democrat.

If you know even a little about California politics, you’ll know that there are two people in the State who you do not want to jack with and both are from San Francisco.  Willie Brown is the first.  Jacking with Willie is a really bad idea.  You will regret it.  The other is Nancy Pelosi.  The main difference between the two in my mind is that Willie has a lot more potential challenges to his authority than the Speaker and word gets around.  Trust me, if Willie were running, there would be no Democrat challengers.  So even if you win, you lose.

There’s one guy who has not gotten the word about Speaker Pelosi, and that is one Shahid Buttar, Lawrence Lessig crony and Electronic Frontier Foundation lawyer.  Mr. Buttar is running in the jungle against Speaker Pelosi.

Yes, you read that correctly, too.  The EFF has their own guy in the hunt for the Speaker’s scalp.  We’re way past ice cream now.

Shahid Pelosi

To his credit, Shahid Buttar does not shy away from his EFF connection.  He’s quite proud of it and uses it as a major selling point to potential constituents.  What I haven’t seen him talk about is the EFF’s funding from Google and others in the Big Tech crew.  Mr. Buttar wants to talk up the privacy side of the EFF’s hustle and his role in “grassroots organizing” for EFF.  I had an example of the EFF’s grassroots organizing recently in Austin when they sent someone to argue against the CASE Act at a bar panel I spoke on advocating for the CASE Act.  We’ve seen other examples of the EFF’s grassroots organizing which amazingly always has the wrong side of artist rights.

Yet, there’s really no question that EFF gets a substantial amount of money from Google–money that likely paid Mr. Buttar’s salary for many years.  For example, the Google Shill List from the Oracle case is pretty clear:

Google Shill EFF

Not to mention the cool million that EFF picked up in the juiced up class action cy pres awards against Big Tech seeking indulgences:

Google Buz EFF Cy Pres excerpt

Roger Parloff the investigative journalist called attention to this unholy alliance in Fortune:

If the Electronic Frontier Foundation, the nation’s preeminent digital rights nonprofit, had disclosed last year that it received a cool $1 million gift from Google — about 17% of its total revenue — some eyebrows might have been raised. The group typically describes itself as “member-supported” and, like most nonprofits, it treasures its above-the-commercial-fray, public-interest-group aura and reputation for independence.

Google Cy Pres EFF
Recent Cy Pres Awards by Case

 

Which means that it is hard to believe that Mr. Buttar did not get top cover from Google before he made his move.  But he definitely is against the “mass spying” that Google and Facebook have been conducting against unsuspecting users while pushing internet addiction–you know, the mass surveillance operations that gave his employer millions (and gave Google billions) and, according to a petition his contributors signed against Google’s project Dragonfly, “create[d} a censored search engine for the Chinese market that enables state surveillance.”

shahidcrop_1
Mr. Buttar getting his soy boy grassroots on inside the beltway in Washington, DC

But it’s all about social justice according to a quote from Mr. Buttar’s campaign reported in The Intercept:

“Pelosi knows that voters are dissatisfied, and before the primary began campaigning in San Francisco for the first time in 30 years,” said Jasper Wilde, campaign manager for the Buttar campaign, in a statement to The Intercept.

“Shahid going 1-1 against Nancy will shine a spotlight on precisely how little she has done for the district in the midst of a housing crisis, an opioid crisis, and an out-of-control cost of living. The election will also reveal her role in exacerbating these issues, that remain at the forefront of voters minds both today and in November.”

Note that all those campaign issues rattled off by Mr. Buttar’s current campaign manager are either exclusively, or to a large extent, city and county issues and many are brought on by the Big Tech billionaires whose employees or cronies fund Mr. Buttar’s employer–which benefited him both before and after his “leave of absence”.   (And note he doesn’t say “unpaid leave of absence.”)

snakeoil-cover-700x400-1

I mentioned Mr. Buttar’s breathless street cred as an EFF “grassroots organizer” to some friends in the labor movement (one was a COPE person).  When the laughter stopped, one pointed to scar tissue on the side of his head and asked, does he have one of these?

But we wish Mr. Buttar well.  Let a hundred flowers blossom.

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Nancy Pelosi getting her real grassroots on in Tiananmen Square

 

Walk a Mile in His Shoes: Former Internet Association President Michael Beckerman Tapdances to TikTok, But His Mouth is Still Moving So You Know What That Means

Michael Beckerman

Michael “Big Foot” Beckerman has moved from screwing artists at the Internet Association to screwing artists at pay-to-play service TikTok, China’s answer to the $50 handshake.  Banned by multiple departments of the U.S. Government and a fav of pedophiles, TikTok’s new lobbyist has got one thing on his mind–more shoes for Mikey.  Which means tap-dancing around an IPO for TikTok.

And that means distancing TikTok from China.  That’s a challenge because Chinese companies don’t comply with US accounting standards for public companies, which means you’re really buying some pork in a poke and that’s a super spreader for a whole new kind of hog disease.  Given that the SEC is looking into delisting existing Chinese companies and blocking access to US capital markets for new offerings, it’s like that choice between Keds and Jason of Beverly Hills.  Which brand best suits old popsicle toes, do you think?

Politico tells us that Mr. Beckerman’s biggest challenge is making a Chinese company that some think is a thinly veiled state owned enterprise that surveils for the CCP seem like it’s not really Chinese.

TIKTOK IN WASHINGTON — Michael Beckerman took the helm of TikTok’s policy shop just a week before coronavirus-related restrictions got underway. Now the former Internet Association chief is staffing up the company’s first Washington office and trying to make Capitol Hill inroads while the pandemic has brought business as usual to a halt. That’s meant video conferences and phone calls with Hill offices, as well as remote interviews with prospective staff. “We’re moving forward. The company’s doing well and growing, and my hope is when everybody can go back to work, we’ll have the first pieces of our team in place,” Beckerman told MT.

Exactly how big that team will be, Beckerman declined to say. But the company currently has eight openings on its website for D.C. policy experts focused on privacy, content moderation, intellectual property and more. “It’s not going to be a WeWork-size office, I’ll say. We will have a physical office with a team that can tell the story of the company and be really proactive,” he noted. Until now, TikTok has been reluctant to engage lawmakers. A Senate Judiciary subcommittee left an empty witness chair when TikTok declined to appear at two hearings, and the company’s leader, Alex Zhu, canceled a series of Capitol Hill meetings last year. “We’ll be engaging fully with Congress. I can’t speak to specific hearings, but we definitely look forward to telling our story,” Beckerman said.

But here’s the good part:

TikTok’s big D.C. objective is distancing itself from China. The app’s ties to Beijing-based ByteDance have been a source of suspicion in Washington, but Beckerman attributes that to confusion about its corporate structure. TikTok is not a subsidiary of ByteDance, as has been widely reported, he said. Rather, the two companies share a common Cayman Islands-based holding company, also called ByteDance.And though Zhu resides in China, TikTok’s other senior executives are located in the U.S. TikTok is not available in China and data from its U.S. users is not stored there, Beckerman added. “A lot of that anti-China sentiment we really need to clear up and explain how this company is being run independently, and it’s not subject to Chinese law or a subsidiary of a Chinese company,” he said.

Oh that’s MUCH less confusing.  “TikTok is not a subsidiary of ByteDance, as has been widely reported, he said. Rather, the two companies share a common Cayman Islands-based holding company, also called ByteDance.”

What a relief.  Big Foot to the rescue.  I feel so much better now.

This takes “news from the goolag” to a whole new level.