Amid deal talks, TikTok, WeChat turn to lobbyists for US support – Center for Responsive Politics

(Illustration by Chesnot/Getty Images)

As tensions heat up between President Donald Trump and the popular social media platform TikTok, the app has beefed up its lobbying operation to challenge allegations that it has been funneling user data to the Chinese Communist Party. But as its day of reckoning draws nearer, lobbying might not be enough to save it from getting nixed. 

On Sept. 18, the Associated Press reported that the U.S. is set to ban TikTok by Nov. 12, along with another popular Chinese app WeChat, over national security concerns. This move comes after an Aug. 7 executive order by the president, which banned all U.S. transactions with Chinese tech firms Tencent and Bytedance — which own WeChat and Tiktok respectively — in 45 days. 

Although the ban would restrict some transactions and prohibit new downloads and updates of the app starting last Sunday — when the 45-day clock runs out — the U.S. government said in a Monday court filing that it would not affect the wages or benefits of TikTok employees, and it would not make it illegal for the employees to do their jobs. 

The following day, Trump greenlit a deal between tech-giant Oracle, Walmart and Bytedance, and the Sunday ban was postponed for another week while the companies sort out the details with the U.S. government. But the deal may be ill-fated as disagreements between TikTok and Oracle brew. 

As their futures hang in the balance, these companies have turned to lobbying firms in a last-ditch effort to garner support.

ByteDance didn’t start lobbying until the second half of 2019. But in the first three months of 2020, it spent about $300,000 deploying 27 lobbyists from K Street firms. In the second quarter, ByteDance spent a record amount of $500,000 on federal lobbying in an attempt to prove its allegiance lies in the U.S. and not overseas. The company’s total number of lobbyists now rests at 36.

Among these lobbyists is David Urban, an adviser to Trump’s re-election campaign hired by TikTok in January. ByteDance paid $160,000 Urban’s American Continental Group to lobby on its behalf. The American Continental Group has seen its finances soar in the Trump era, in large part due to Urban’s social proximity to the president.

Tencent also hired multiple lobbyists in August after having never done so before. Marc Lampkin, a top lobbyist at Brownstein Hyatt Farber Schreck, hired on Aug. 31, has raised money for Trump and donated to the president’s reelection campaign last year. 

Millions of U.S. WeChat users rely on it to keep in touch and conduct business with people and companies in China, according to the AP. When the prohibition of payments and other technical limitations go into effect on Sunday, many users will be left to find alternative means of conducting business.

Late Sunday morning, a preliminary injunction blocked the U.S. Department of Commerce from ordering Apple and Google to remove WeChat from their stores. Even though the WeChat ban was postponed in the wake of the Oracle deal, its true fate is yet unknown.

Despite the president’s many claims otherwise, TikTok and WeChat’s parent companies have long denied any foul play when it comes to the collection of user data. In fact, Bytedance hopes to have its day in court.

TikTok last month filed a legal challenge against the government’s order to ban the app. The company argues that the administration’s proposed ban “violates the due process protections of the Fifth Amendment,” according to the complaint. It goes on to say that the ban “is not based on a bona fide national emergency and authorizes the prohibition of activities that have not been found to pose ‘an unusual and extraordinary threat.’” 

On Sept. 19, Trump officially gave his blessing to an Oracle-Walmart partnership with TikTok. Oracle will become a cloud provider for the app with a 12.5 percent minority stake, and Walmart tentatively agreed to buy a 7.5 percent stake, with CEO Doug McMillon serving as one of five members on the board. Bytedance will still own 80 percent of the company — the majority stake. 

The Department of Commerce has delayed the prohibition of U.S. transactions with TikTok until next Sunday.

In recent months, several major corporations have been vying for a stake in TikTok; Microsoft and Walmart had teamed up on the deal previously, hoping to pull from Walmart’s background in digital sales to integrate e-commerce into the app, according to the New York Times. 

But last week, TikTok announced it had rejected Microsoft’s bid. Instead, it chose Oracle, a California-based computer technology corporation that sells database software and technology, cloud engineered systems and enterprise software products.

Some of Oracle’s top executives have been vocal in their support for the president, as well. Among them is Executive Chairman Larry Ellison, whose February fundraiser for Trump sparked controversy among Oracle employees.

Urban has also lobbied for Oracle Corp through the American Continental Group this year, along with Fox News political contributor and leader of Cove Strategies lobbying firm Matt Schlapp and former Reps. Steve Southerland (R-Fla.) and Robert Livingston (R-La.).

Additionally, Treasury Secretary Steve Mnuchin has pushed hard for a deal that would allow TikTok to keep ties to its Chinese parent company while outsourcing its data management to Oracle. 

Trump also said over the weekend that he wants the company to contribute $5 billion to fund “real history” education. This idea, which Bytedance was unaware of until it made headlines in U.S. news media, comes on the heels of Trump’s recent remarks about the need to restructure education in the U.S. to include a more “pro-American” curriculum. 

Last week, the president announced in a speech that he will create a Patriotic Education Commission, which he said would combat “left-wing indoctrination” of America’s youth. In the same speech, he condemned critical race theory and the New York Times’ 1619 Project — which focuses on the consequences of slavery and the contributions of Black Americans — as “ideological poison.” 

Relations between the U.S. and China have grown tense in recent months, in large part due to “rifts in geopolitics, technology and trade” along with Trump’s statements placing blame on China for the coronavirus pandemic that has killed nearly 200,000 Americans and about 950,000 people worldwide.

In an interview earlier this summer, the president said banning TikTok could be “one of many” ways the U.S. government could retaliate against China in the wake of the COVID-19 pandemic

Although the future seems unsure for the popular social media platform — which has 800 million active users worldwide including 100 million in the U.S. — the Oracle deal could be its best bet.