Congressional Scrutiny of ‘Big Tech’ Builds on Bipartisan China Focus

Following the midterm elections, Republicans hold a majority in the House of Representatives for the first time since 2019. House Republicans have already announced ambitious oversight priorities for the 118th Congress. As to public-sector oversight, House Republican leadership have already announced an interest in focusing on the Biden Administration’s trade, law enforcement, and immigration policies. Regarding the private sector, one sector we believe will be especially susceptible to aggressive congressional investigations in the 118th Congress is internet communications technology (ICT), especially, the activities of that sector’s largest companies. So called “Big Tech” platforms have been subject to increased congressional scrutiny since the first allegations of foreign interference in the 2016 presidential election. In the 118th Congress, both the House and Senate can be expected to conduct hearings into Big Tech entities such as Twitter and TikTok, among others. Democrats are likely to focus on corporate governance policies, mis- and disinformation practices, corporate wealth, and other issues, while Republicans are more likely to focus on allegations of censorship, environmental, social, and corporate governance (ESG) policies, and the implications of China and social media, especially, data security and privacy.

In this regard, the expected appearance by TikTok’s chief executive Shou Zi Chew before the House Energy and Commerce Committee on March 23 will be informative. With that hearing, House Republican lawmakers seek to pursue policy concerns about the Chinese-owned video-sharing app, including alleged sharing of U.S. users’ data with China and risks that the app could be used for propaganda purposes or the manipulation of U.S. users. TikTok, owned by Beijing-based Byte Dance Ltd., has said that it would never allow interference by the Chinese government and has said that it devised a $1.5 billion plan to ensure the website is independent, including creating a system for monitoring the secret algorithms that determine the content pushed to users. The security measures have been the subject of negotiations with the Committee on Foreign Investment in the U.S. (CFIUS) for at least two years.

Monitoring this development will be important in that it may indicate how Congress will direct oversight or investigations of other Chinese companies whose direct, substantial commercial activity in the U.S. marketplace triggers substantial policy concerns. Indeed, at this point, even among Chinese companies directly subject to Congress’ investigative jurisdiction, those that have TikTok’s profile are few—a global company headquartered in China; owned at least in part by and therefore, ostensibly controlled by the Chinese government, while maintaining a significant business presence in the U.S. but also China. As to such companies operating in ICT—subject to China’s national intelligence laws that require participation in government intelligence activities, policy concerns about data security and privacy concerns tend to be especially keen. For this reason, how the Committee approaches its inquiry of TikTok and its receptivity to mitigations offered, particularly in the context of pending agency proceedings, will all be themes to watch vis-à-vis the few similarly situated Chinese companies that remain active in the U.S. marketplace.