Bloomberg LawEric Goldman, a professor at the Santa Clara University School of Law and co-director of the High Tech Law Institute discusses the House bill that could ban TikTok. Alan Levin, Bloomberg aviation safety reporter, discusses the problems with the accident investigation into Alaska Airlines midair emergency in January. June Grasso hosts.
This is Bloomberg Law with June Brusso from Bloomberg Radio.
Is time ticking away for TikTok? Or is it just another step in a year's long tech drama. The wildly popular short video app used by one hundred seventy million Americans is facing its most serious challenge to date, a bill that would require its parent company, Chinese tech giant Fyte Edance, to divest itself of the popular video service in the US or remove the app from the country altogether. That bill passed by a vote of three hundred fifty two to sixty five on Wednesday in the House and now goes to the Senate. Lawmakers cite privacy risks and national security fears over the Chinese Communist Party's perceived ability to use personal information for political gains or manipulation. Here's North Carolina Republican Senator Tom tillis, we.
Have to recognize that information on any of these platforms are at risk of going to the Chinese Communist Party. So this is one step in one. I thinks a long journey to hold China accountable.
But others like Republican Congressman Tom McClintock of California are concerned that the US is going down a dangerous path.
The answer to CCPA style propaganda is not CCPA style oppression. Let us slow down before we blunder down this very steep and slippery slope.
And TikTok Ceo showed you promised a fight that includes the courts.
We will continue to do all we can, including exercising all legal rights.
That's something the company did last time in twenty twenty, when then President Donald Trump ordered by Dance to sell TikTok. My guest is Eric Goleman, a professor at Santa Clara University Law School and co director of its High Tech Law Institute. Eric explained why so many lawmakers are concerned about TikTok and it's Chinese parent.
A lot of the legislatures object to TikTok principally because of the fact that it's related to China, and there's such senophobia among our country that it becomes a very politically popular move to tweak China. So it's not so much that the representatives care about the privacy issues. They care about China, and they're signaling that to their voters.
They point to Chinese national security law that forces companies to turn over information when compelled to do so. TikTok CEO show Chu said that TikTok has never shared or received request to share US user data with the Chinese government, and he said that information on TikTok's American users had been moved to US servers run by Texas based company Oracle, and that under the new structure there's no way for the Chinese government to access it or compel access to it. So is that just a false premise or is there something to be concerned about in general?
I think we should be concerned about government access to our private information online, but I don't restrict my concern to China. I feel that way about all governments across the globe, including here in the United States, where government agencies have a variety of ways about taining private online communications that in fact we would prefer that they don't have access to. Indeed, Europe cut off data flows with the United States because of the concern in Europe that the US government had access to European private information online. So if that's the concern, then trying to target China and doing it in this way is really an indirect solution. We really ought to have a broad society wide conversation about when government to have access to private citizen data and what we're going to do to protect the interest of private citizens.
So tell us about this bill what it would do.
The bill is styled as a divestiture law. The idea is to get the ownership of TikTok out of the hands of people related to China. In practice, it's almost certainly going to turn into a TikTok ban. It would ban TikTok in the United States and require app stores not to allow the installation of TikTok. So it's trying to just kick TikTok out of the US market.
So what the lawmakers are saying is that by dance, the Chinese parent would have six months to divest TikTok.
Yeah, just to be clear, nobody expects that to really be the outcome. There's a limited number of people who might be interested in buying TikTok, and the forced sale would almost certainly depress the prices. But I want to analogize this to what happened after the Ukrainian War, where Russia put the squeeze on US owned enterprises and force them to sell to Russian owners, and in so doing, they transferred billions of dollars of wealth from the US owners to new Russian owners who bought it pennies on the dollar. And so essentially the Congress is doing what Russia did to our companies, and that really seems like the wrong inspiration for US to be.
Drawn from China. Beijing has warned that a ban would ultimately backfire on the United States itself. So what could they do there?
You know, we're locked in a long term strategic battle of words and actions against China and some other global powers, So there's an infinite number of ways in which China could work to degrade the interest of US companies. Now, of course, China has a long history of doing that. They have literally kicked US companies out of the China market. They could continue to tamp down on US interests in China to the economic detriment of US interests, And these kinds of trade wars or attempts to kick foreign companies out of the markets ultimately erect barriers that make everyone poorer. So let's hope that we don't go there. But no doubt that the US would be sending a strong signal to China. We're erecting another trade barrier. You know, we expected retaliation.
China's Foreign ministry also said that there was a failure to provide evidence that TikTok is a threat to the US national security. I've heard a lot of blanket statements that it's a threat, but is there actual proof.
So one of the big questions is exactly how is TikTok a threat to national security? And there's been some seculation about this, but the best evidence of this has not been revealed to the public. It's only been disclosed privately, with the justification that because it's in national security interests, we couldn't tell the public we would jeopardize national security. But that kind of rationale makes it impossible for us to actually scrutinize credibly the evidence, and as a result, it's possible that that evidence is not credible. And in fact, the efforts to ban TikTok were initiated in the Trump administration and some of the judges got to see that evidence and they did not find a persuasive Now, maybe there's new evidence that we haven't seen yet, but the most likely scenario is that national security is being invoked as a concept, not actually as pieces of specific credible evidence to try and justify the ban.
The company TikTok has warned about the potential economic impact on small business owners who depend on the app. It's urged it's one hundred and seventy million US users to speak out against it, and they have been influencers. Took to Capital Hill on Wednesday. Members of Congress were flooded with calls from angry constituents and small business as are saying a ban would crush their business. Do you think it would have a severe economic impact on certain people?
It's not just the economic impact, although I think that's a helpful way of establishing a measuring stick, but so many communities rely upon TikTok to communicate with each other, and that can create new stars, celebrities, influencers who wouldn't have had a voice any other way that are actually quite helpful to the communities that they're speaking to. It also has created a variety of different small business opportunities where new entrants to a market can use social media, including TikTok, in order to gain traction against incumbents who otherwise would rather not give them any opportunity to grow. So When Congress says that we want to ban TikTok, what they're really saying is we don't want people talking to each other in that way, and we don't care that sometimes that's the very best way for those people to help self actualize or the very best way for those entre to help build their business. So Congress is just saying, we'll care about any of that, all of that we're willing to forego in this nebulous chasing of the quote national security interest.
Eric, I am not on TikTok. I confess, is it really this unique platform? Because hearing people talk about it, they say, this is the only way I can accomplish this goal, whether it's business or reaching out to people. Is it really that unique?
It doesn't really matter if TikTok is unique compared to other social media. What matters is that there's certain types of communities that have developed on TikTok that don't exist in the other social media, and so by eliminating those communities, even if you could publish the exact same content on social media, you can't reach the same audience in the same way. Now I don't personally use TikTok, it doesn't speak to me, But for those who it speaks to, it is perhaps the best way to reach them, the best way to engage them. And so it isn't something where we could simply tell the content publisher and the audience just move your conversation another social media that literally wouldn't happen, That relationship would bust up instead.
Does it seem as if the Senate is not as enthrall with this bill as the House was.
We don't know what's going to happen to the bill in the Senate. The Senate leaders have created equivocation about the bill, but the political calculus that got the bill through the House is the same for the Senate. In all cases, there's political gold for beating up on China legitimately or not. So I don't think that the bill will die in the Senate easily. It will be given a fair amount of push I think forward. But there are a number of senators I think we understand both the ridiculousness of the justifications of the bill as well as the fact that in the end, the bill is a censorship bill, and I think there are some senators who just can't support that.
And some lawmakers did say that the United States shouldn't be following China in selectively blocking social media platforms citing free speech concerns.
I mean, it sounds so weird to say we should not be ripping the playbook off of from authoritarian countries and then justifying our actions by because they're doing it like that, Just to me is so obvious, such a baseline foundational assumption in how I proceed, and yet it is not obvious in the house.
Coming up next on the Bloomberg Law Show, I'll continue this conversation with Professor Eric Goleman of Santa Clara University Law School. TikTok says it will fight the bill in the courts. What are some of the legal grounds it could use? And later in the show, the accident investigation into that Alaska Airlines mid air emergency in January is being slowed down by Boeing's failure to cooperate. Remember, you can always get the latest legal news by listening to our Bloomberg Law podcasts. You can get them wherever you get your favorite podcasts, and you're listening to Bloomberg. TikTok is used by one hundred and seventy million Americans, so it's no wonder that after TikTok urged them on, angry users flooded members of Congress with calls over a bill that would lead to a nationwide ban of the popular video app if it's China based owner doesn't sell at stake. Here's the bill's author, Wisconsin Republican Mike Gallagher.
It's also based on a lie. They're saying we're pushing an outright ban of TikTok, which is not true. It's not actually what the bill does. It forces a divestiture.
But users, influencers, social media content creators, and small business owners weren't buying it. Brandon Hurst, who sells plants on TikTok, lobbied lawmakers not to pass the bill.
My whole business would be devastated. Yeah, I would lose the opportunity to connect with millions of people on a regular basis, and the community that I've worked really hard to build would be would be gone.
But the bill passed the House with overwhelming bipartisan support and now goes on to the Senate. I've been talking to Professor Eric Goleman of Santa Clara University School of Law. Eric, let's say that some version of the bill is enacted, TikTok says it plans to exhaust all legal challenges before it considers divestiture. What kind of legal challenges could TikTok bring.
Yeah, no doubt that if the bill is enacted, it will be challenged in court, and it will be challenged by TikTok. It's also probable that it will be challenged by users of TikTok expressing their own free speech concerns independent of the concerns that TikTok has, and the bill will also impact the app stores, and it's possible that they will point out that the bill impacts their free speech as well. So there are at least three different communities that have concerns about how the bill would restrict their speech, and we actually have some indication of how those legal challenges might look. This is not the first time that efforts to ban social media apps have been attempted and have been challenged in court. Both in the Trump administration, there was a ban on TikTok and we chat, and then states have been enacting bands, including an illegal challenge was filed against one in Montana, and all of those efforts to ban in the past have failed, including on First Amendment grounds, those bands were unconstitutional, and so it seems to me that TikTok and its users and maybe the answers have pretty good reasons to think that they might win a First Amendment challenge.
Tell us more about the possible First Amendment challenges from those three communities you mentioned.
So let's talk about TikTok's interest under the First Amendment. TikTok operates a service that other people's used to talk to each other, and sometimes there's been discussion that TikTok doesn't have its own First Amendment interest. It's just a vessel for other communications. But TikTok publishes content in the form of the software that offers to its users, and it curates users speech in a way that communicates its editorial Priorities and courts have recognized that TikTok has a speech interest in the publication of the software and in the way in which it curates its content for its users. So there's some serious First Amendment issues that I think are raised when you tell a service that the government's going to come in and override its its curatorial discretion. I want to talk about the TikTok users interest for the First Amendment. The TikTok users are talking to each other, and they are creating conversations that don't exist in the same way to the same audience anywhere else in the information ecosystem, and so taking away TikTok takes away their ability to engage with each other. If you're content publisher in TikTok, it takes away your ability to create your own audience and speak with them in the way you choose, And so that impacts their First Amendment interests. And looking back to the app stores, the app stores have not previously taken the leadership on challenging the constitutionality of TikTok bands or bands of social media, but they're actually harmed by the TikTok band bill as well. And let me give an analogy of how we might think about their interests. The ban is kind of like telling a bookstore that they can't carry a particular book. They can still run a bookstore, but they just can't carry a book. And so for the app store, they're being told you have to pull an app off of your shelves. And by forcing the bookstore or in this case, the app store to change what it wants to offer to its users that encroaches on the app store speech interests as well. So there are three different each interests to play here, TikTok's, TikTok users, and the app stores. And I think each of them has very good reason to point to the Constitution and say that the ban hurts their ability to speak the way they choose.
TikTok is banned on federal devices, and Biden administration officials help with the bill's technical language. But by re election campaign joined TikTok last month, I mean talk about irony.
Biden's presence on TikTok is a reminder that even if Biden could reach audiences through other channels, there's value to reach them through TikTok. And it is that exact political speech benefit that shows how corrupt it is to try and ban TikTok. It literally would suppress valuable political speech coming from the president who would potentially sign to build a bandit.
Former President Donald Trump, surprise surprise, has flip flopped on TikTok. Recently, he's expressed his opposition to the ban. Do you think that this could be an issue in the presidential election.
Trump's flip flopping on TikTok is really quite shocking. He made a concerted effort to try to force the exact same moves that the House enacted while he was in office, but he didn't sway a lot of his loyal fans. Only fifteen Republicans voted against the TikTok band despite Trump asking him to do so, so the vast majority of Republicans didn't heed his requests. Though I don't really know how serious anyone's taking him on this topic.
You know, I thought that in all the discussion about TikTok, there might be some discussion about how it's harmful to young adults. You know, we had those lawsuits by parents.
Yeah. So the effort to ban TikTok is a very small corner of the broader tech lash, the effort among regulators to try to suppress and control social media generally. And there's a wide list of gripes against social media that regulators have lobbed, of which privacy is a non trivial one. But there are other concerns as well, including the concerns about the impact of social media on teenage and younger users. But in this sense, the TikTok ban is not really about protecting the users. Although nominally it's about protecting their privacy, it always comes back to the idea it's China that's doing these nefarious things, and if it had been a British company owning TikTok who did the exact same things that China was doing, we wouldn't even be hearing a peep about this. And it's just a reminder that all the efforts that are taking place to ban TikTok are not about protecting users. They really are just political gamesmanship.
Have any of those lawsuits by parents reached a motion to dismiss stage or have been settled or any important rulings yet.
Yeah, a number of the lawsuits against TikTok for harming their users, including underage users, have been dismissed outright. Some of those are on appeal, but there's a very large pair of cases in California courts that have not reached a final judgment on the question, and so those are really going to dictate whether or not there's going to be legal traction to the claims against TikTok.
While we're on the topic, across the pond, as they say, there's a battle over one of Britain's most famous newspapers, and the government has outlined plans to stop foreign states from owning newspapers.
And the target there was some US buyers were planned to buy up one of the leading newspapers in the UK that caters to the conservative audience, and the members of the legislature there didn't want to see the newspaper fall into the hands of US interests, and it was a reminder that here in the United States, we would not tolerate an effort to ban or control the identity of owners of a newspaper. That would be clearly a First Amendment objection because it would be dictating who gets the right to speak in our country. And believe it or not, foreign speakers have protected constitutional rights to speak here in the United States, So there would not be the possibility of establishing controls over who owned a newspaper here in the US, unlike other countries like Britain, where literally they're proposed to that, but they don't have the First Amendment, they can pass laws like that with the intent and objective of controlling who gets to speak in their country. We wouldn't tolerate that here.
What about the regulation of broadcast ownership in the US.
Back to this ish about foreign ownership over media in the United States, Now, there is one area where there is the right of the government to control who owns the media that reaches the public, and that's in the area of broadcasting. We limit the ability of foreign owners to own broadcasting stations in the United States, and I believe that that's constitutional. Now, even though we allow the regulation of broadcast ownership, that doesn't extend to the ownership of online services, even if they're broadcasting video, just like the broadcasters do who are regulated by the SEC. And that's because of nineteen ninety seven court opinion that said that the rules that apply to broadcasting are not the same as the rules that apply to the Internet, that the reasons why we control the access to broadcasting don't extend to why we might permit people to speak on the Internet. So there are rules about foreign ownership of media here in the US that might very well be constitutional, and yet they don't extend to a ban on TikTok because the Internet is not like broadcasting.
Thank you so much, Eric, This has been a tour de force. We covered so many different topics. That's Professor Eric Goldman of Santa Clara University Law School and co director of the High Tech Law Institute. In other legal news, today, Donald Trump's first criminal trial may not begin on March twenty fifth, as planned, after lawyers for the Manhattan District Attorney and the former president told a judge they'd received thousands of new pages of evidence from Federal prosecutors Office said today that some thirty one thousand pages of records tied to former Trump lawyer Michael Cohen's federal campaign finance convictions were turned over to their office on Wednesday, adding that they would not object to a thirty day delay in the start of Trump's hush money trial. Bragg blamed Trump for the delay of the production of documents, saying the defense waited until January eighteenth to issue a subpoena for more materials. The potential delay is the latest good news in court for Trump, who had faced the prospect of up to four criminal trials before the November presidential election. Three of those cases now might slip into next year. Coming up next on the Bloomberg Law Show, we'll look at the accident investigation into the Alaska Airlines mid air emergency. In January, officials say that investigation is being slowed down and complicated by Boeing's failure to cooperate. I'm June Grosso, and you're listening to Bloomberg. It's been two months since that Alaska Airlines jet had a mid air emergency when a door plug blew off, and officials with the National Transportation Safety Board say they're still in the dark about who performed the work on the panel of the Boeing seven thirty seven MAX that failed. At a Senate Commerce Committee hearing last week, NTSB chair Jennifer Homandy said they've repeatedly asked Boeing for the information, and they can't even get a list of the people who are on the team that handles doors and door plugs.
We don't have the records. We don't have the names of the twenty five people that is in charge of doing that work in that facility. It's absurd that two months later we don't have that.
Joining me is Alan Levin, Bloomberg Aviation Safety reporter. So I want you to start with a description of what happened to Alaska Airlines Flight twelve eighty two, and you know what we know about it.
This plane took off from Portland in the evening of January fifth, and when it reached about fourteen fifteen thousand feet, the cabin pressure suddenly dropped. And what happened was there's what is known as a door plug, which is basically just a beefed up panel that covers an unused exit door, and it blew off the side of the plane. And if you can imagine the air pressure and an airliner is about the equivalent of usually somewhere around five thousand feet altitude, but they were well above that. So nature of horrors of vacuum, there's a tremendous amount of force pushing from the inside where the pressure is higher out and this plug blew off, and then you know, all the air inside the car wants to get outside, and so there's like a river, if you will, of pressurized air flowing out through this. It can be quite powerful. Luckily they were not at you know, thirty five thousand feet, where it would have been even more intense. And also luckily nobody was seated next to where the door plug was or in the middle seat, so the two closest seats were empty. On a very full plane, it's kind of lucky as dramatic as this was. Nobody was injured, amazing no damage to the aircraft structure, and the pilots were able to return and make an emergency landing.
The NTSB has determined that those missing bolts caused the incident.
So it's a little early to say the cause, but the NTSB did put out a preliminary report and they said it appears, and probably even a little stronger than that, there's very strong indications that this flug or this panel over the unused door was not attached properly in the factory. It's in rent in Washington that Boeing uses to complete the construction of these seven thirty seven Max jets. In particular, there's an extensive mechanism to hold the pressure on the door, about a dozen points of these pins that interact with the plane that hold the pressure, but they don't ensure the door will never come off. So Boeing ads four bolts that prevent the door from sliding, and before they ship a plane out, they put four bolts in there so it can never move and if installed correctly, they work pretty well. Because this has never happened before, but in this case, all the evidence suggests that the bolts were not installed, and so the plane was delivered not October. It went into service in November, and it bumped around enough that it came loose on this flight in early January.
So the NTSB accident investigators still don't know who performed the work on that panel that failed.
That's correct.
It's quite extraordinary actually how this investigation has evolved, if you will, so any factory, you know, you theoretically have records of the construction of whatever widgets they're making, But in the aviation industry, the record keeping is on steroids. Anytime you do a safety critical thing, you're supposed to memorialize it. You know, in this case it's a computer system. When that happens, for a safety critical item like this, there's supposed to be a second set of eyes. So not only does the workers supervisor have to oversee it, but you know, in some cases there's a secondary set of eyes who comes in afterward and certifies that it was done properly. Now, in this case, Boeing has said that they do not have a record of this work being performed, and in fact, they an extraordinary admission last week in a letter to the Senate. They said that it was a violation of their processes and so, as you say, as a part of that, they do not know who performed the work, and the NTSB has been asking Boeing for information. The NTSB is frustrated because they can't get the names of the key people to interview, so instead they had to ask for the names of every person who might have done work on a door assembly in the plant at the time this plane was moving through. Told it's twenty five people. They were in rent and Washington at this plant doing interviews last week. But the head of the NTSB, Jennifer Hammandy, this week told senators that they still have been unable to determine who did it.
And Boeing overrode security camera footage of repair work on the door plug, and they said that's consistent with standard practice. Video recordings are maintained on a rolling thirty day basis. Is Is that a problem as well?
I don't see that as a huge problem. So, you know, this work was done in late September. Boeing has a policy to overwrite ape every thirty days, so they have, you know, videos showing the shop floor. Presumably we don't know precisely, but they're not a key safety tool such as performing the secondary inspection on work would be they're there, you know, just to ensure people aren't stealing tools and et cetera. You know, the NTSB always for video records because there's so there's so many surveillance cameras and so many people just randomly taking video with their phones. They always sort of ask for that. In this case, it wasn't available, but there was no indication there was any anything untoward or about that.
So now you also had a Federal Aviation Administration audit of Boeing seven thirty seven MAX that found a plethora of issues with the production process.
That's correct. We understand there were dozens of violations, but we still don't know the detail. I would add that the fa also audited a second company called Spirit Aerospace, which builds the raw fuselage parts for the seven thirty seven and then ships them to Washington State where Boeing does the final assembly, and they found violations that Spirit as well. It's relevant because the reason this door plug got removed in the first place at the factory is that there were improperly done rivets by the Spirit folks, and so they had to go in and fix those. But the bottom line is, yeah, the FAA has done this audit. We don't know the precise details of how bad the violations were, but they did find dozens of cases where there were shortfalls in the safety processes and record keeping, etc. That FAA expects.
So we've seen several mishaps with Boeing aircraft recently, flaming engines, tires falling from the sky, engine failures over the Pacific, malfunctioning rudders, issues with wiring gears and hydraulic systems. Am I overstating it? It sounds like a lot.
Well. I have two almost contradictory points here. One is that in the case of the tire falling off, it was quite dramatic. Somebody videotaped it and the tire came down and hit a car in a parking lot. It was in San Francisco. You know, that's not a good look, but it was a twenty plus year old plane. That failure had absolutely nothing to do with Boeing. We don't know what happened, but you think it would be related to maintenance somehow. Quite frankly, if you keep an eye on incidents on a daily basis. As I've done many years, these things happen all the time. I think it's fair to say the accident rates are remarkable. They'd never been better, and these incidents, I think demonstrate that the safety net is pretty robust. But I would also say that one of those incidents that you mentioned does speak to broader issues with Boeing. There was a notice by the federal government last week that thirty seven MAX wiring had been improperly installed. When that happens, sometimes it chased, and what happened was a flight control device known as a spoiler was activating without a pilot intending for it to activate. That speaks to some of these very same issues with quality that we've seen with Boeing in this door plugse.
The Justice Department has opened a criminal investigation into that Alaska Airlines incident, examining whether it falls under the government's twenty twenty one deferred prosecution agreement with Boeing. The accident took place just two days before the expiration of the deferred prosecution agreement.
Several years ago. After these two fatal accidents in twenty eighteen and twenty nineteen involving seven thirty seven MAX aircraft. If you recall, the accidents were caused at least in part by a bad design that Boeing put into the plane, and afterward the Justice Department reached an agreement not to prosecute Boeing, and in exchange, Boeing admitted to a violation and agreed to pay a large civil penalty and then also agreed to essentially clean up its act over a three year period. That period, as you say, was about to expire. The Justice Department has six months to decide whether Boeing has violated is this earlier agreement. We understand that they've convened a grand jury to look at whether there are criminal charges to be brought. There are two possibilities. We understand. It's possible they could say that Boeing violated the earlier agreements and then they would bring the charge on that score, or they are also potentially looking at bringing charges related to the actual January fifth failure. Now I would note some countries France, for example, almost always files a criminal charge after an airline accident, but it's very unusual in the US and quite controversial. We're very early on. It's unclear how it's going to play out. But it's a very sticky, complicated situation.
Seems like Bowen's been here before. Thanks so much, Alan. That's Alan Levin, Bloomberg Aviation Safety Reporter. And that's it for this edition of the Bloomberg Law Podcast. Remember you've can always get the latest legal news by subscribing and listening to the show on Apple Podcasts, Spotify, and at Bloomberg dot com, slash podcast, slash Law. I'm June Grosso and this is Bloomberg
