Fair and free markets go out the window in America’s TikTok grab

The ultimatum for TikTok has been set: Sell your extremely popular video-sharing platform beloved by so many Americans in 45 days or be closed down.

But you must sell it to us. “I don’t mind whether it’s Microsoft or someone else, a big company, a secure company, a very American company buys it,” US President Trump explained to press on Monday.

Oh, and a percentage of the deal should go to the US federal Treasury. “The United States should get a very large percentage of that price, because we’re making it possible,” Trump added.

That’s right. The proponent of ‘free markets only on our terms’ strikes again. One can only imagine what the reaction might be if a Trump-owned investment in China was forced to be sold with Chinese leadership directing a share of it to national coffers. It’s a move we’ve been accustomed to from countries like Venezuela rather than the US.

Even the most ardent Trump supporters who hate big government telling them how to behave (hello anti-maskers) must be scratching their heads at Washington telling them what video platforms and mobile phones they can or cannot use. 

While it’s rare for this author to be in agreement with the editor of China’s state-run Global Times, it all lends credence to the view that the "hunting and looting of TikTok by the US government” forces ByteDance into a sale where a company can rarely get a premium price. Moreover, when paired with Western action against Huawei, the actions smack of an unlevel playing field where Chinese companies are simply not welcome to bring their technology to the open market to compete fairly in the West.

National security, of course, has been the primary concern and the basis for shutting out Chinese technology firms. Under a centralised government, all large Chinese companies have connections with Beijing. We do know reports of espionage and cyberattacks from China are credible, so the fear around Chinese technology being used to these ends is legitimate. But with scant evidence to actually connect Huawei and ByteDance to malicious activity, we’re stuck in an environment where fear wins and Chinese brands feel that they can never win in global markets, no matter how good their products are. 

Two digital ecosystems forever?

The sad implication of the TikTok saga is that it snuffs out the faint hope that we might see a truly global digital ecosystem one day. Instead, we seem destined to stick with two digital social and ecommerce spheres, with China dominated by Alibaba, JD, Tencent, Baidu, ByteDance, Pinduoduo and super-service firms like Meituan, while Amazon, Google, Facebook, Microsoft and Netflix lead other players in the West (and the rest of the world).

The main barriers between the two systems have been language and distrust. While technology is already making great strides to overcome the former, the latter is much harder to get rid of.

For the marketing communications industry in the immediate future, the sale of TikTok in North America and ANZ to Microsoft may not be a bad thing. More immediately, it could generate greater confidence in TikTok in those markets and could lead to more inter-operability with other platforms. See what industry experts told us.

But in the bigger picture, the lack of trust which spawned this deal will also only reinforce the stubborn persistence of two very different marketing ecosystems in Asia. Chinese players will stay focused on building and experimenting in their unique environment with their own platforms and tools while marketing professionals elsewhere in Asia largely specialise on other global (largely Western-dictated) platforms.

Given how innovative and dynamic the Chinese digital marketing ecosystem is, the industry in Asia can’t afford to limit its interactions, learnings and inspiration from such a vibrant market. Let’s ensure we don’t.

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Robert Sawatzky is head of content at Campaign Asia-Pacific.