Requiem for TikTok

We’re soooo back— welcome to 76 new subscribers who joined us since I last published.

When you write a blog called United States of Amazon and the president signs a bill that could potentially upend both commerce and US-China relations, it warrants pouring a couple of late night armagnacs and tickling the laptop keys. So here goes…..

This is a quick turn column so no Amazon news roundup or cocktail recipe this week. I love you all but I’m just some guy with a full time job, precocious kid, and stalled out housing rennovation that is draining my life force writing on an arbitrary two hour deadline I set for myself and this was the best I could do ❤️ 

Well, it happened folks. Late Tuesday night, the Senate approved a bill that nestles the forced divestiture of TikTok between $61B in aid to Ukraine, $26B to Israel and a nebulous little $8B of miscellaneous military-industrial complex spend to “counter China’s military might.” With apologies to Upton Sinclair, this is how the sausage gets made in Washington.

For all the hoopla, the legislation is sort of a nothingburger for the entrepreneurs who sell on TikTok. Brands that have invested heavily in TikTok Shop will have a few more quarters to operate on the platform while the legal process sorts itself out. TikTok Shop is highly unprofitable and can’t burn cash in perpetuity– the fees and take rate on the platform will only go up as the platform gets more commoditized. By the time TikTok is forced to divest or shut down, the arbitrage window on TikTok Shop and glory days of hypergrowth will be over anyway. Get it while you can, boys and girls.  

For the Biden administration, it’s a risky political gambit. Given the aforemetnioned lengthy legal and appeals process, Biden is unlikely to notch a major political win in the runup to the election. Even if Satya the dealgod swoops in and Microsoft buys TikTok and operates it in more or less the same manner minus emailing user data to Beijing, that would go down in 2025. If Bytedance plays hardball and loudly refuses to sell, Biden could be left holding the double shitbag of pissing off young, progressive voters who Democrats need to turn out AND looking far weaker in his ability to enforce his will against popular Chinese enterprises. Trump, who has mostly opposed the TikTok ban, would absolutely feast. Biden deserves credit for stubbornly and perhaps fooilshly carrying on. Once again, the Presdient proves that his best trait is not listenting to people on Twitter.

Tangential to the forced sale, there are a ton of juicy sub-narratives that have swirled around TikTok since the original House vote, mainly the quiet part that Tiktok loses money being forcefully said out loud. I’ve long posited that TikTok’s investment in Shop was largely a lobbying expense, a bet that centering its narrative around an emerging commerce marketplace and Shein/Temu competitor would seem less to regulators like an existential threat to democracy than the current iteration of the app. While I stand by that claim, the revelation that TikTok proper potentially loses BILLIONS of dollars suggests that even with a mainline to 170 million Americans, the foundation is less secure than it seems.

As I’ve joked before, I don’t know if I want TikTok banned because I’m an ardent patriot or just a crusty 31 year-old in CPG who doesn’t want to have to learn another social media platform. I don’t think my position is particularly unique—banning TikTok is a vibe more than a strict appeal to logos but it won over Congress at breakneck pace. While the legal case is tenuous, there’s a large consensus forming that half of Americans getting push notifications from the CCP, isn’t in a manner of speaking, the American way.

But overall, what has stood out the most to me about the movement to ban TikTok in the US is how it is making strange political bedfellows before our very eyes. As the never shy Matt Stoller quipped on Twitter, “the bizarre alignment of Trump, the ACLU, and far-left progressives in support of Chinese government control of American communications is amazing.”

One popular piece of internet discourse is that the TikTok ban is just a classic example of horseshoe theory, as both a far-left coalition led by AOC and a far-right coalition led by Marjorie Taylor Greene were among the no votes. This is the talk track for most who support the measure as it neatly positions support of the bill as the reasonable patriotic position shared by sensible folks on both sides of the aisle. Even if technically correct, I find this explanation highly unsatisfactory in appreciating the weirdness of what is going on.

My brothers and sisters in Christ, in voting yes on the original bill, all but 15 Republicans took a position that is in opposition to the current sentiment of the prevailing party lord. When is the last time that even one Republican who still wanted to have a long career in the GOP broke convincingly from the former president?

Unable to retreat to their familiar reductionist ideological tropes, our politicians and pundits alike are being forced to…….actually evaluate a complex subject on its merits and develop a viewpoint on the fly. There isn’t a clear “correct” tribal answer on what to do with TikTok and this is both breaking and rebuilding lot of political brains.

Furthermore, if you’re a politician simply trying to follow the lead of your constituents, you’ve spent much of the last weeks fielding calls from both teenagers and retirees alike who are hopelessly addicted to the platform. Irregardless of your ideological biases, there are two reasonable perspectives that you could derive after hearing this deluge of messages:

1) Holy shit, I can’t make these people quit TikTok cold turkey. Geopolitical implications be damned; my constituents love this product and it fills a real need in their life.

2) Our nation is slipping into a CCP controlled digital requiem for a dream and I need to take action immediately before its too late.

Two politicians who are dimaterically opposed on most third rail issues may find common ground on supporting the proverbial TikTok ban while two legislators who agree on almost everything else may find themselves landing on different sides of the TikTok line. This is good. Politics is supposed to be a god awful, hot mess of competing interests and lesser evils. The simpler and more certain it is, the dumber we get.

Democracy is a hell of a drug.

One final appeal— if you’ve subscribed recently and we don’t know each other personally, reply to this note and say hey. I’d love to hear your thoughts on TikTok as I try to formulate my own.