FCC Commissioner: TikTok CEO failed to establish 'level of trust' with Congress during testimony

FCC Commissioner Brendan Carr joins Yahoo Finance Live to discuss TikTok CEO Shou Chew's testimony before Congress and a potential ban on the social media platform in the United States.

Video Transcript

- To the American people watching today, hear this. TikTok is a weapon by the Chinese Communist Party to spy on you, manipulate what you see, and exploit for future generations. A ban is only a short-term way to address TikTok.

- ByteDance is not owned or controlled by the Chinese government. It's a private company.

- TikTok's source code is riddled with backdoors and CCP censorship devices.

- You damn well know that you cannot protect the data and security of this committee or the 150 million users of your app.

- We do not promote or remove content at the request of the Chinese government.

DAVE BRIGGS: Wow. If Thursday's TikTok hearing were a book, the title would be "Shou Chew and the Terrible, Horrible, No Good, Very Bad Day." Will that one day someday lead to an all-out TikTok ban? And if so, how might that work? For those answers, we're joined now by FCC commissioner Brendan Carr. Great to see you, Mr. Commissioner. Thanks so much for being here. How would you characterize the TikTok CEO's testimony? And how safe ultimately is US user data when it comes to the Chinese government?

BRENDAN CARR: I think you put it right. Look, I can't imagine yesterday going any worse for TikTok. I personally sat in that exact same chair, the exact same hearing room, for the exact same committee multiple times. And I've never seen anything like it. It really united Republicans and Democrats. Whatever odds are that people were putting on an outright ban on TikTok before that hearing, I think you had to substantially raise those odds during the hearing. The one thing he had to do was establish some level of trust with the committee, really with anybody, and he failed utterly in doing that.

SEANA SMITH: Commissioner, I think there's lots of questions out there. I mean, obviously, this app is massively popular. TikTok's saying they have 150 million American users. How exactly would a ban potentially work?

BRENDAN CARR: Yeah, there are different ways that you can structure it. India has banned TikTok back in 2020. CFIUS, or Treasury Department, has previously required the sale of Beijing-based ownership. So Grindr was an app that was an example where that required. So you can go this route of a genuine divestiture of ties back to CCP. We've done that. Or you can go this route of India doing the outright ban.

But you're right. Look, 150 million people, we can't put that to the side. And we dealt with Huawei and ZTE. These weren't consumer facing devices. So I think it's even more incumbent than ever before on people like me to make the case and explain to people in really concrete terms why this is a real problem and why we need to potentially ban the platform.

DAVE BRIGGS: Well, that's why we have you here. If you can explain to the American people why this is such a concern, and do you have those concerns about Facebook, Instagram, Twitter, Snap, and the like?

BRENDAN CARR: You know, I do have a baseline level of concern with a lot of applications and the data that they pull, regardless of whether headquarters are in Beijing or Silicon Valley. But there's something unique with TikTok, and we have the evidence already. Look, they've represented for years very little data-- in some cases, they would say no data-- made its way back to China. But there's internal audio communications that showed, no, in fact, everything is seen in China.

We have them admitting now to having surreptitiously surveil the location of specific Americans after initially denying it, even though they have the information to know it was true. We have evidence that they've allowed CCP state media to set up accounts and target US politicians for criticism ahead of our midterm elections. FBI, DOJ is investigating right now as well.

So unlike three years ago whenw e went through this in the Trump administration, I would say the evidence is now public, at least a substantial amount of it, and very clear. So it's a much stronger case now than then.

SEANA SMITH: You're laying out why TikTok could be viewed or should be viewed maybe as a national security threat. What about, though, some of the other US social media platforms, not so much a national security threat, obviously, but more so the data collection aspect of it, the thought here that maybe this is going to attract a little bit more scrutiny. Maybe they need more oversight. What do you think?

BRENDAN CARR: Yeah, I think we can do both. I think we can put some better baseline privacy protections in place. Again, at the same time, I think there's something very unique about TikTok, that it's been going through this two-year Treasury Department review. I think it's very clear, in my view, that it's low hanging fruit. So I think we need to move forward quickly with a TikTok ban. And then we can take a look at other applications after that. But I don't think we can just afford to kick the can down the road, given that we've got no protections right now. All this data is going back to Beijing.

DAVE BRIGGS: What would your message be to the millions of creators, part of an estimated $100 billion creator economy, and the estimated 5 million American businesses who do rely on TikTok for some form of advertising and/or connecting with their consumers?

BRENDAN CARR: We need to be really sensitive to this, but I think the answer there is, in some ways, TikTok is uniquely replaceable. Unlike, say, LinkedIn or Instagram, you're not building followers. It's an algorithm that's promoting it. So I do think this can be easily replaced by other applications. Also, if TikTok agrees to a corporate divestiture from ties back to CCP, then the platform itself stays available. But I think there'll be other competitive short form video application where people can continue to be innovative and run businesses off of it.

SEANA SMITH: How close do you think we are to that ban? What does that potential timeline look like, do you think?

BRENDAN CARR: Well, it certainly has accelerated a lot. I mean, it's not going as fast as I would like, but usually, we have these big tech hearings, and people in DC get the feeling after them that nothing's really going to change. I don't get that sense. When you wake up this morning, it feels like the floor is dropping out below TikTok very, very quickly. And so, again, the White House has already said, apparently, according to reports, divest or face a ban. So this could go sooner, rather than later, although it's DC. A default position is to assume things take longer than it should.

DAVE BRIGGS: No doubt about that. FCC Commissioner Brendan Carr, really appreciate you being here, sir. Thank you.