with Tonya Riley

The Commerce Department's announcement this morning that it would ban downloads of two Chinese-owned social apps in the United States raises the stakes in the intense negotiations over TikTok's future. 

It's the most clarity the agency has given on how it intends to enforce Trump's unprecedented executive orders targeting TikTok and WeChat due to growing national security concerns about their handling of Americans' data. 

The Trump administration's move could put greater pressure on ByteDance, TikTok's Chinese parent company, to accept more concessions in a deal to keep operating, said Daniel Ives, an analyst at Wedbush Securities, who called the announcement “shocking” in an email. 

“We continue to believe this is a game of high stakes poker and this move put sharp teeth into threats by the Trump administration around the TikTok and WeChat bans,” Ives said.  

The ban designed to prevent Google and Apple's stores from allowing new downloads or routine app updates for U.S. users is only the beginning.

The department also said it would be illegal to host or transfer internet traffic associated with WeChat beginning on Sunday, and to do so with TikTok beginning Nov. 12. The administration reserved the right to prohibit additional restrictions in the future, if the companies find other ways to operate in the United States despite the ban. 

“Today’s actions prove once again that President Trump will do everything in his power to guarantee our national security and protect Americans from the threats of the Chinese Communist Party,” Commerce Secretary Wilbur Ross said. “At the President’s direction, we have taken significant action to combat China’s malicious collection of American citizens’ personal data, while promoting our national values, democratic rules-based norms, and aggressive enforcement of U.S. laws and regulations.”  

Talks are continuing between the Trump administration and TikTok. 

Commerce Department officials told Reuters that the new ban on downloads of TikTok could be rescinded by Trump before it takes effect if TikTok is able to reach an agreement with the administration over the future of its U.S. operations. 

TikTok has proposed making Oracle, a rare public ally of the Trump administration in Silicon Valley, it's “trusted technology partner.” TikTok didn't immediately respond to a request for comment. 

The other elephant in the room is China. 

Once TikTok arrives at an agreement with U.S. investors and government officials, it will still need to persuade Beijing to grant it the green light as well. And officials there have accused U.S. officials of “economic bullying.” 

The situation is highly fluid, but here are some key details to watch as the clock ticks on the administration and companies to reach a deal:

1. Treasury Secretary Steven Mnuchin wanted to push the TikTok deal through, despite broad national security concerns. 

He’s led an effort to persuade the administration to sign off on a deal that would outsource TikTok’s data management to Oracle while allowing TikTok to keep ties with its Chinese parent company, ByteDance, Ellen Nakashima, Rachel Lerman and Jeff Stein report. The deal would include a plan for the company to go public within the next year or so to increase transparency into its operations.

Mnuchin briefed senior Defense Department officials on the deal yesterday and told them it was going to get done regardless of mounting resistance, according to some of the people familiar with the talks.

His message was, “Give me your concerns and I will try to address them, but we are doing this,” one former U.S. official briefed on the call told my colleagues. 

2. TikTok would have an independent board of directors approved by the U.S. government under the latest plan. 

The board of directors would be required to consist entirely of U.S. citizens and would also include a national security committee, according to Bloomberg's Jennifer Jacobs, Saleha Mohsin and Nick Wadhams. 

An American data-security expert would chair that committee and also serve as a key contact with the Committee on Foreign Investment in the U.S., which would oversee any issues of concern to the U.S. government. 

3. Oracle would have full access to TikTok's source code. 

The proposal aims to ensure that Oracle can make sure there are no back doors that TikTok's Chinese parent could use to share data about American users with the Chinese government, Bloomberg also reported. Data security is among the top concerns about TikTok's current business, so such a model may appeal to Trump administration officials. 

4. Some potential investors are working on a plan that would give U.S. interests majority ownership. 

Oracle and Walmart could together own a key stake in the company, according to the Wall Street Journal's Sarah Nassauer, Michael C. Bender and Andrew Restuccia. Such a deal – combined with the existing American investors in TikTok – could ensure U.S. interests have a majority stake and alleviate some of Trump's key concerns with the initial partnership announced this week. Walmart Chief Executive Doug McMillon is expected to get a board seat if a Walmart investment goes through, underscoring the retailer's continued interest in pushing into social media and entertainment after initially trying to partner with Microsoft on a deal.

5. TikTok will need a new CEO – and Instagram co-founder Kevin Systrom is in the running. 

In addition to trying to make a deal with the Trump administration, TikTok is also hunting for a new chief executive after Kevin Mayer resigned in late August amid mounting political scrutiny of the company. Systrom has had preliminary talks with the company, according to the New York Times's David McCabe, Erin Griffith, Ana Swanson and Mike Isaac. 

It's a fascinating development because TikTok is a key rival to Instagram, which Facebook owns. Systrom left Instagram in 2018. 

Our top tabs

Mark Zuckerberg told Facebook employees that the company would fare better under a Republican administration. 

The chief executive of the social media company has internally expressed concerns about Joe Bidens stated desire to alter current laws protecting Internet platforms from holding executives liable for content on their platforms, Bloomberg Newss Sarah Frier and Kurt Wagner report in a piece detailing how Facebook has tried to keep conservatives happy. 

The companys relationship with the Biden campaign has been far rockier than with the Trump campaign, they report. Zuckerberg has not met or had a phone call with Biden over the past year. 

In June, the Democratic nominee and former vice president posted an open letter calling on Facebook to stem misinformation on the platform. In response to Bidens letter, Facebook said in a blog post that “the people’s elected representatives should set the rules, and we will follow them.”

Around the same time, Zuckerberg spoke with Trump about a controversial post by the president that read, “When the looting starts, the shooting starts.” Facebook did not remove the post, adding fuel to critics contention that the company has made concessions to court Trumps favor. 

Sen. Richard Blumenthal (D-Conn.) is pressing AT&T for details on its plans to launch an ad-driven phone plan.

The company is considering a plan that would give consumers a discount in exchange for increased tracking for marketing, AT&T chief executive John Stankey recently told Reuters.

The “pay-for-privacy” plan undermines the commitments to consumer privacy the telecom giant has made to Congress and the Federal Communications Commission, Blumenthal wrote in a letter to Stankey that was first shared with the Technology 202.

“I am alarmed that AT&T’s announcement threatens to create a race to the bottom, trampling over long-held consumers expectations and leaving privacy as a right exclusive to the rich,” Blumenthal wrote.

Blumenthal questions Stankey on a number of concerns, including how AT&T might wield the unique identifiers it plans to assign consumers of the discount plan so that it can track them across devices for better marketing data. Blumenthal asked whether AT&T will link that data in any way with its advertising service Xandr, which uses consumer data for ad targeting. 

“The prospect of AT&T monitoring consumers’ phone and internet records, matching them across devices and data broker records, and then using that private information to manipulatively target people is outright chilling,” Blumenthal writes.

Sen. Ron Wyden (D-Ore.) also criticized the plan. “Given AT&Ts atrocious track record of selling its customers data to bounty hunters and stalkers, no one but the financially desperate would ever trust the company with their personal information,” Wyden wrote in a statement to The Post. “Congress must step in and pass strong privacy protections for every American, not just the rich.”

Facebook will no longer recommend health groups in an effort to direct users to trusted information.

The groups will still be available via search and invitation, Facebook said in a blog post yesterday.

The change comes alongside a new set of policies to crack down on the proliferation of misinformation and harmful content in Groups. Facebook also recently stopped recommending groups tied to violence and removing them from searches. 

Private groups on Facebook have become a hot zone for the spread of health misinformation and a meeting place for extremists seeking to plan offline violence.

Facebook said that it has removed over 1 million pieces of content in groups for organized hate and 12 million pieces of content for hate speech. Over 80 percent of those posts were found “proactively” or before a user reported them.

The company said administrators of groups that were taken down for policy violations would be suspended for a time. Members who violate community standards in posts in a group will have to get approval to post for the next 30 days.

Hill happenings

Democrats are pushing the Federal Communications Commission to get students connected.

The FCC should expand its E-Rate program to help provide Internet immediately to students studying from home, a group of 36 senators led by Sen. Edward J. Markey (D-Mass.) urged the agency. The federally funded FCC program already provides money to schools and libraries to obtain affordable broadband.

“The FCC has the power to help mitigate the impact of the coronavirus on our most vulnerable families,” the lawmakers wrote in their letter to FCC Chairman Ajit Pai. “We now urge you in the strongest possible terms to utilize this authority to provide Internet connectivity and devices for children in need. School bells across the country have started to ring, but without immediate action, many students are at risk of never making it to class.”

The Democrats say FCC leadership had the authority to use existing funds to provide at-home connections. But Pai argues that the laws guiding E-Rate limit the funding in-person classrooms use. 

Democrats included $4 billion to help boost the E-Rate program in the next coronavirus relief package, but that deal is still held up in negotiations.

“However, the FCC need not — and should not — wait for Congress to act,” they write.  

Republicans introduced new data privacy and security bill.

Long-awaited legislation from Senate Commerce Committee Chairman Roger Wicker (R-Miss.) would require businesses to allow consumers to access, correct, delete or port their data. The bill would also prohibit companies from transferring consumers sensitive data without their consent. The protections would be enforced by the Federal Trade Commission. 

“As COVID-19 increases activity online and opportunities to misuse personal data continue to surge, it is time to pass a uniform, national privacy law,” Wicker said in a statement. “More than ever, we need to stop bad actors and restore consumers’ trust in the internet marketplace.”

The legislation, which is being co-sponsored by Sens. John Thune (R-S.D.), Marsha Blackburn (R-Tenn.) and Deb Fischer (R-Neb.), would also require businesses to assess the privacy risks of data processing and be transparent about their use of algorithms. 

The legislation is already garnering support from trade groups.

“BSA applauds Sen. Wicker for his important work toward ensuring that a federal privacy law gives consumers rights in their personal data and places obligations on businesses to handle that data in trusted and responsible ways,” said Craig Albright, vice president of legislative strategy at the software company BSA.

But the bill has yet to attract sponsors from the committees Democrats, many of whom have introduced their own privacy bill in the past year. Democrats on the committee, Sens. Maria Cantwell (Wash.), Brian Schatz (Hawaii), Amy Klobuchar (Minn.) and Edward J. Markey (Mass.), introduced their own privacy bill last year that would coexist with state laws rather than preempt them, as Republicans are proposing.

The Senate Commerce Committee will hold a hearing on Wednesday to revisit the debate over a national privacy framework that largely stalled during the coronavirus pandemic.

Workforce report

Facebook introduced new rules governing its employees’ conversations on its internal social network. 

The changes will designate which areas of Workplace, the company’s internal communications system, can be used to discuss social and political issues, CNBC reports

The company also says it will strengthen its harassment policies, but its unclear how. The guidelines come a day after Google introduced new internal communications policies. Facebook has faced a string of leaks from Workplace and internal employee events recently. 

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Mentions

Twitter announced several new hires and promotions yesterday. Lauren Culbertson will now lead Twitter’s federal, state and local advocacy efforts across the country as head of U.S. public policy.

Todd OBoyle, Amy Murphy and Wilfredo Fernandez joined Twitters public policy team. Murphy will work on privacy issues and comes from the Internet Association. OBoyle, who worked at Lime, will focus on elections, census, violent extremism and immigration. Fernandez comes from the Cyber Civil Rights Initiative and will work on federal and state advocacy efforts.

Daybook

  • The Senate Commerce Committee will hold a hearing, “Revisiting the Need for Federal Data Privacy Legislation,” on Wednesday at 10 a.m.
  • The House Energy and Commerce Committee will hold a hearing on social medias role in radicalizing Americans on Thursday at 11 a.m.
  • New Americas Open Technology Institute will hold a virtual panel exploring how Internet platforms are addressing the spread of election-related misinformation on Oct. 1 at 1:30 p.m.

Before you log off

The Trump campaign’s most watched YouTube video used 10 video clips in misleading ways — isolating quotes and splicing together clips to mask key context.