Jack Ma’s Pain May Explain Why Kevin Mayer Got Out of TikTok

When TikTok first came under criticism for being under the control of the Chinese Communist Party, many in the music business didn’t quite know what to make of it. Kevin Mayer’s sudden departure seemed kind of inexplicable and sudden. I moderated a panel of great experts on the subject at the Music Business Association Law and Technology Conference (materials here) and we put together what I still think are important background documents for understanding the differences between doing business in an authoritarian collectivist state that has the legal basis in national law to demand not only compliance, but also governance and also ownership.

Now we have evidence from billionaire Jack Ma and Alibaba/Ant Group of just how in your face Kevin Mayer’s sit down may have been. Remember, Jack Ma is a member of the larger Chinese Communist Party according to the BBC. (I have to believe that TikTok grand poobah Zhang Yiming is also a member and most definitely is very familiar with these sit downs.)

According to the Wall Street Journal’s Lingling Wei, Jack Ma offered CCP regulators any part of Ant Group they wanted if they’d just let him conclude what would have been the world’s largest IPO.

As Jack Ma was trying to salvage his relationship with Beijing in early November, the beleaguered Chinese billionaire offered to hand over parts of his financial-technology giant, Ant Group, to the Chinese government, according to people with knowledge of the matter.

“You can take any of the platforms Ant has, as long as the country needs it,” Mr. Ma, China’s richest man, proposed at an unusual sit-down with regulators, the people said.

Jack Ma has done a number of things to provoke retaliation by the CCP government. He got sideways because Ant Group has a banking operation has loaned approximately $230 billion outside of the CCP’s banking controls. The last straw seems to have been criticizing CCP Chairman for Life Xi Jinping’s financial regulations that Ma felt would cause capital shortfalls that would be made up by the Bank of China (the CCP’s central bank) buying equity to make up those shortfalls. See how that works? They’re not requiring Ant to sell them equity, they are just helping out. That’s a nice IPO you got there, be a shame if something happened to it.

TikTok’s Mr. Zhang has been there and would probably tell Mr. Ma to embrace the suck.  It should come as no surprise–according to his Wikipedia page, Mr. Zhang understands what happens when you don’t toe the Party line:

[Zhang’s] first app, Neihan Duanzi, was shut down in 2018 by the National Radio and Television Administration. In response, Zhang issued an apology stating that the app was “incommensurate with socialist core values“, that it had a “weak” implementation of Xi Jinping Thought, and promised that ByteDance would “further deepen cooperation” with the ruling Chinese Communist Party to better promote its policies.

All of which gives us better insight into why Keven Mayer might have decided to exit TikTok.

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.