‘Hopeless from the start’

‘Lost touch with reality’: How TikTok’s vaunted lobbying operation went wrong

The app always faced an uphill battle in Congress because of its owner’s ties to China. But observers say TikTok’s complacency, tone deafness and hubris caused its lobbyists to lose its most important fight in Washington.

By BRENDAN BORDELON

After a brutal, five-hour bipartisan grilling of TikTok’s CEO on Capitol Hill in March 2023 — where Democrats and Republicans took turns bashing the company for its China ties, its risks to children and its mental health dangers — the company emerged confident that its leader, Shou Zi Chew, had nailed his first public appearance in Washington.

“They thought it was a tremendous success,” said Jim Lewis, a tech expert and former diplomat. When he spoke with TikTok general counsel Erich Andersen days after the hearing, Lewis was shocked to find him in high spirits. “[Andersen] told me they ‘batted it out of the park,’ or something like that,” he said.

That misreading of the Washington landscape was typical for TikTok, according to a half-dozen members of Congress, tech policy experts and individuals familiar with the company’s influence efforts. It helps explain how its army of expensive lobbyists struggled to assuage congressional concerns that the app is a surveillance tool for Beijing — and ultimately failed to save it from this year’s unusual, fast-moving legislative attack.

A new law, signed by President Joe Biden on Wednesday as part of a broader foreign aid package, would force a sale of TikTok or ban it from the American market. The company has promised to challenge the law on constitutional grounds, and it may yet be rescued by a judge.

Given Washington’s increasingly hostile tone toward China, it may have been impossible for any app owned by a Beijing-based company to duck restrictions indefinitely.

But interviews paint a picture of a yearslong series of missteps at TikTok that culminated in this week’s historic defeat on Capitol Hill. They describe a company buoyed by confidence in its runaway commercial success and vast user base, with leaders who failed to recognize that TikTok’s links to China made it more vulnerable than rival tech platforms like Meta, which had gone through the Washington wringer with barely a scratch.

“They thought they were Mark Zuckerberg, except they weren’t American,” Lewis said.

TikTok had years of warning, starting with a 2020 effort to ban it by President Donald Trump, which was overturned in court.

It hired dozens of lobbyists from high-profile Washington firms and took on former Obama officials as consultants and advisers. TikTok and ByteDance, its Beijing-based parent company, spent at least $27 million lobbying Washington since 2019, according to federal records.

“They pepper-sprayed Washington with money,” said Jacob Helberg, a member of the U.S.-China Economic and Security Review Commission, who helped pressure Congress to pass the ban. “But they really never took the time to actually answer, in a satisfying way, the question that people had — which was, ‘Are you controlled by the Chinese Communist Party?’”

Lewis, now a senior vice president and tech expert at the Center for Strategic and International Studies, called Andersen’s self-satisfaction after last year’s House hearing “astounding.” (A TikTok spokesperson said Andersen did not specifically recall speaking with Lewis after the hearing, but that it “probably” happened.)

Lewis had also watched the hearing, and came away convinced that he’d witnessed a “crucifixion” of the TikTok CEO. Headlines called it a grilling, or a blasting, and declared the company’s future was uncertain.

To political observers, all the warning signs were there — not least because both parties found TikTok such an easy target.

Lewis said his meeting with Andersen “was probably for me the point where you realize they have lost touch with reality, and it wasn’t going to go that well.”

He called TikTok’s misplaced confidence “part of a larger pattern of being tone-deaf to how the Congress actually works.” With around 170 million monthly active users in the U.S., Lewis said TikTok executives felt they were “too big” for Congress to squash without alienating their constituents.

“They kind of felt — and this was in multiple conversations — that they were untouchable,” Lewis said.

A slow-moving catastrophe

After its first close call with Washington in 2020, TikTok started spending more on lobbying and public relations. Lobbying expenditures in Washington by its Beijing-based parent company, ByteDance, nearly doubled in one year, surging from $2.5 million in 2020 to $4.75 million in 2021.

Despite staffing up, observers say, TikTok’s Washington operation suffered a preventable loss as early as 2022. That’s when its lobbyists failed to convince Capitol Hill of the wisdom of “Project Texas,” TikTok’s plan to protect American user data from Beijing by storing it in U.S.-based servers run by Oracle.

Helberg said Project Texas was “jokingly referred to as a ‘marketing project’ on Capitol Hill.” Lawmakers, he said, were far more interested in talking to TikTok representatives about the company’s ties to China than its data protection efforts. His claim was echoed by Sen. Maria Cantwell (D-Wash.), the powerful chair of the Senate Commerce Committee.

“The issue is not Project Texas, and whether you move servers to Texas,” Cantwell told reporters ahead of Tuesday’s Senate vote. “This is about whether you have a backdoor, a government backdoor, that can serve up algorithms that can put out information that could be of harm to U.S citizens or U.S military. ... Until you address that issue, you really weren’t addressing the core technology point.”

TikTok’s lobbyists were also quieter on these big issues than many would have expected. On Tuesday, Cantwell expressed surprise over how little she heard from TikTok lobbyists compared to the other tech giants. She recalled hearing from TikTok representatives just twice — once during a “courtesy meeting” with Chew in September 2022, and the second via a text message sent four or five months ago.

One TikTok investor with knowledge of the company’s internal deliberations, granted anonymity to discuss sensitive conversations, said Andersen — who also ran TikTok’s government relations team until late 2022, when he was reportedly removed from that post — at times discouraged his lobbyists from holding regular meetings on Capitol Hill, making it hard for them to invest the time and attention needed to build key relationships in Congress.

A senior TikTok official, granted anonymity in order to preserve relationships in Washington, called Cantwell’s claims “completely false” and said TikTok’s lobbyists “have been talking to her directly for four years now.”

But the TikTok official declined to say whether Andersen bungled the company’s early lobbying efforts, ultimately leading to his removal as head of that team.

“It’s a little bit unfair to do all this finger-pointing and knife-sharpening,” the official said.

The balloon factor

In early 2023, TikTok ran into an unexpected problem: American politicians became fixated on the passage of a Chinese spy balloon through U.S. airspace.

Helberg called the balloon a key inflection point that “reignited a lot of the concerns behind TikTok.” Rep. Michael McCaul (R-Texas), chair of the House Foreign Affairs Committee, began describing the app as a “spy balloon in your phone.”

In some quarters, it had a very concrete effect: In an interview with POLITICO this week, Montana’s attorney general suggested that the balloon directly triggered that state’s ban of TikTok, which was put on hold last November by a court.

TikTok went on the offensive, and began to use a weapon it assumed would give it political clout: its many loyal users and content creators.

Ahead of Chew’s March 2023 testimony in the House, just six weeks after the balloon was shot down, the company brought a small army of TikTok creators to Washington in an effort to pressure Congress to lay off the ultra-popular app. Rallying just outside of the Capitol, the creators — joined by a handful of TikTok-friendly lawmakers — blasted Congress for trying to take away their livelihoods.

Lewis called that rally a misstep, touting the app’s popularity instead of addressing Capitol Hill’s national security or influence concerns.

“It was this thing of, ‘Look how important TikTok is to this woman who makes money by selling cupcakes online,’” Lewis said. “It could be true, but it’s just not gonna work.”

And like a similar blitz by TikTok users that took place one year later, Lewis said the attempted show of popular force left Capitol Hill fuming.

“The big tech companies do not go up and throw their weight around,” Lewis said. “They’re much more humble — and ‘humble’ is never a word I heard from TikTok.”

One win, then a blindside surprise

Chew’s appearance before the House coincided with the March 2023 release of the RESTRICT Act. The legislation, introduced with great fanfare by Sens. Mark Warner (D-Va.) and John Thune (R-S.D.), would have empowered the president to restrict or ban TikTok, along with other foreign-owned apps.

But in a rare bright spot for TikTok’s lobbying operation, the bill soon stalled. On Tuesday, Warner griped that TikTok “threw the kitchen sink at me and Sen. Thune.” Thune said TikTok “retained a ton of lobby folks and spent a lot of money working it, trying to take it down or keep it from going anywhere.”

But TikTok’s fleeting success would soon be eclipsed by global events.

On Oct. 7, a few months after its lobbyists killed the RESTRICT Act, Hamas launched a surprise attack on Israel. The sudden conflict kicked off a new headache for the app, as lawmakers in both parties claimed TikTok’s algorithm was boosting anti-Israel videos. TikTok was in the middle of promoting its partnership with Disney ahead of the company’s 100-year anniversary, and the investor said TikTok executives were slow to recognize the danger posed by the perception that the company had taken Hamas’ side.

Some researchers also posted work suggesting that TikTok was promoting pro-Hamas content. Helberg called it another inflection point that “created a live, colorful picture of the propaganda concerns.” On Tuesday, Thune told reporters there was “no question” that the Oct. 7 attack reinvigorated the congressional TikTok debate.

Even so, at the start of this year, things seemed to be looking up for the app. Although Chew was forced to again testify before Congress in January — this time on kids’ safety — he did so in the company of other tech executives, with Zuckerberg taking many of the worst hits. The Biden campaign also officially joined TikTok, causing observers to assume that the app had skated by.

But behind the scenes, another process was underway.

Deputy Attorney General Lisa Monaco was working quietly with House China Committee leaders Mike Gallagher (R-Wisc.) and Raja Krishnamoorthi (D-Ill.) on legislation that would force TikTok to cut itself loose from ByteDance or be banned. The bill was sprung on TikTok’s unsuspecting lobbyists in early March, and lawmakers moved quickly to advance the bill out of committee and onto the House floor.

“You have to give a little credit to Gallagher’s committee,” Lewis said. “They kept the heat on and called attention to the risks of using TikTok.”

TikTok’s lobbying operation again swung into action — and again, the company tried to activate its users. Through an in-app notification shot to users around the country, it urged people to call their representatives and express their opposition to the bill. Congressional offices were soon flooded with calls from upset TikTok users, some reportedly threatening to harm themselves if the app was banned.

The effort backfired spectacularly. Lawmakers from both parties seethed over the attempted show of force — Helberg said it “reinforced and validated” congressional fears that TikTok wielded too much influence over vulnerable Americans. And Lewis said he spoke with a number of Hill offices who only decided to vote for the bill after being bombarded with angry calls.

Jeffrey Yass, a Pennsylvania-based investor with a multibillion dollar stake in ByteDance, also attempted to dissuade Congress from passing the House bill, in part by leveraging his donor relationship with the conservative Club for Growth. But beyond Yass and his affiliates, it’s not clear that ByteDance’s other influential investors attempted to rescue the company as Congress zeroed in on TikTok.

Sequoia Capital, which previously invested in ByteDance, announced it would split off its China business last year. The firm, which has seen congressional scrutiny over its ties to China, has tried to keep its head down in the TikTok fight, according to someone with knowledge of Sequoia’s Washington strategy. The company’s Chinese investments are now under a separate company, HongShan.

The TikTok legislation advanced unanimously out of the House Energy and Commerce Committee on March 7, and passed the full House by a wide margin several days later. But many still believed the Senate would hold up the bill, in part over constitutional concerns expressed by Cantwell and other key members.

According to someone aware of TikTok’s Washington strategy, the company thought it was at least somewhat safe in the Senate, in part because Cantwell’s committee has a reputation as a place where legislation languishes.

But when House negotiators worked to reach consensus on a wide-ranging aid package to Ukraine and Israel earlier this month, they unexpectedly attached the TikTok divestiture requirement to that vehicle — effectively presenting senators like Cantwell with a fait accompli.

TikTok’s standing was further damaged when news broke last week that the Chinese embassy was lobbying Capitol Hill against the legislation. The move only bolstered claims that the app serves as an important influence tool for Beijing.

As the Senate prepared to pass the TikTok bill on Tuesday, a small group of TikTok creators rallied just outside of the Capitol. Unlike similar rallies last year and in March, both lawmakers and TikTok representatives kept their distance.

‘Hopeless from the start’

The senior TikTok official was adamant that the company’s lobbying team performed well over the years, and despite fast-increasing headwinds. “We’ve been successful in beating back every bad attempt for the last four years,” the official said. “And this one, I think, in a lot of ways, was really unprecedented.”

The TikTok representative said Capitol Hill had been reduced to passing TikTok legislation “in the dark of night, doing it behind closed doors, doing it without any real process and then putting it into a must-pass foreign aid bill.”

“The idea that somehow this could have been prevented ... from the work of the team or the way we met with senators is completely false,” the TikTok official said.

Even TikTok’s foes were sympathetic to that framing.

“Times have changed,” Thune said ahead of this week’s vote. The Senate Republican whip noted that Congress is far more sensitive to national security concerns in the wake of wars in Ukraine and Israel, as well as rising tensions in the Pacific.

“It’s an evolving situation which I think, you know, TikTok — notwithstanding their efforts and a lot of money spent lobbying — it’s just starting to lose the argument,” Thune said.

Despite his extensive criticism of TikTok’s lobbying operation, Lewis said the company’s efforts were likely “hopeless from the start.”

Politically speaking, he said: “[Y]ou’re not lobbying for TikTok, you’re lobbying for China. And that’s not going to sell on the Hill. If it was any other company located in any other country, you would have seen a different outcome.”