Google and TikTok: Parallel Paths, Hidden Motives, and the Fracturing of the Global Internet

I have had a front-row seat to the geopolitical challenges that Google faced in China and those that TikTok’s parent company, ByteDance, is facing in the United States. I can’t help but realize how similar this experience is to Google's experience in China over a decade ago.

In 2010, Chinese authorities required Google to apply for a license to operate, which included entering into a joint venture with a Chinese partner. Google decided not to comply and stopped its search operations in mainland China. While often framed as a "ban" or a "block," the reality is more nuanced. Google and hundreds of companies chose not to apply for the required license.

Tech history is poised to repeat itself in 2024 with ByteDance in the US. As one of the nation's largest consumer platforms, the TikTok app is under intense scrutiny due to its Chinese ownership. The US government is contemplating foreign ownership restriction rules (now passed by the House, pending the Senate), a move that could have significant implications for TikTok's future in the United States, echoing the regulations imposed by China on Google in 2010.

The American law restricting ownership on ByteDance in 2024 is just way too similar to the law that China passed to regulate Google in 2010 to ignore. Unlike the case of the 2020 Executive Order (which I personally litigated and won), this time, the law will be passed as a foreign ownership restriction. In my research, all of these foreign ownership restrictions are uncontroversially legal.

So the crucial question is: What will ByteDance do in 2024 if faced with a foreign-ownership restriction like the one Google faced in 2010? Will ByteDance, like Google, exit the market instead of sharing revenue, code, and national pride? The economic stakes are high but not existential, with TikTok USA contributing around 20% to ByteDance's $120 billion revenue.  It would be helpful to compare the relative economic impact of ByteDance's loss of TikTok in the U.S. market to Google’s loss in the Chinese market.

In 2016 I led a team at Google Cloud seeking to apply for a license to operate enterprise services in China. I presented the division's business case to Google's secretive "China Board," a senior internal committee comprising several executives. I prepared for weeks. My primary concern was addressing the issues of free expression that would certainly be important to the Board. Those questions never came. The Google executives criticized the logic of entering the market in a joint venture, despite the law that requires it, because doing so would require sharing ownership, profits, and code. I was told to "sharpen my pencil" and return with a proposal that would not require any joint venture. I did as I was told. I sharpened the pencil as best as possible by meeting with lawyers, engineers, and business executives to find a way. In the end, I found nothing. I could see no path to allow the operation of Google Enterprise in China without compliance with the foreign ownership rules. It would be the status quo for Enterprise in China. Blocked.

In my experience, these economic reasons (sharing revenue, code, and pride) drove Google's decision not to enter China. The public speaking points for this same thing, however, focused exclusively on free expression. It was literally reflected in my title in my early days at Google: Senior Policy Counsel for International Relations and Free Expression. I wore that title with all the moral authority it had in it, and I represented Google's official position on free expression at the United Nations. Google was very proud of itself, and this was, in many ways, the easiest (and funnest) job I ever had. It's popular to say freedom is good and authoritarianism is bad.

A couple of years later, I changed roles from policy to strategy, and in 2016, I worked on a project to re-enter China. At that point, it became clear to me that the real reasons for Google's exit from China were not based on free expression but instead, it was a business decision. There was no time or interest to discuss the moral high ground. It is true, however, that Sergey Brin was so vocal about free expression and cared deeply about it, so that became the "spin." Sergey's passion made for much better comms material than the economic explanation.

Similarly, the CCP's "golden share" in ByteDance is the focus of many things, real and imagined. In this narrative, the CCP's golden share is to ByteDance what Sergey Brin's passion was to Google.

The parallels between Google's experience in China and ByteDance's current situation in the US are not just coincidental. They underscore the profound and ongoing challenges that tech giants face in an increasingly interconnected world. Will ByteDance adapt to local regulations or withdraw from a lucrative market?

Or, will ByteDance take the position that Microsoft did, finding a joint-venture partner and sharing the profits, code, and pride?

From this perspective, ByteDance could economically decide to exit the market for the same reasons that Google did in China. Alternatively, ByteDance could decide to stay, just as Microsoft did in China (since then Microsoft has had a joint venture with 21Vianet).

Will ByteDance prioritize profits (be a Microsoft) and comply with foreign ownership restrictions, or will they take the moral high ground (be a Google) and withdraw from the market?

Whatever happens, the true motivations behind these decisions may never be fully known. Even today, Google's rationale for leaving China remains shrouded in a mix of moral posturing that overshadows any economic calculus. Regardless of the true reasons, the result is the same: a fractured internet, broken hearts, and a world where the promise of a globally connected community is increasingly out of reach.