TikTok Is Talking to UMG Again, But Washington May Hold The Keys to Its Future 

TikTok has returned to the bargaining table with Universal Music Group (UMG), but a fast-tracked Congressional bill that could result in the platform being sold, or, as a last result, banned in the United States may reach President Joe Biden’s desk before those negotiations are finished.  

A source familiar with the talks says Bytedance — the Chinese company that owns TikTok — has returned to the bargaining table with UMG after the label group pulled its music from the social media platform at the end of January citing its refusal to address three “critical” issues: “appropriate compensation for our artists and songwriters,” “protecting human artists from the harmful effects of AI” and “online safety for TikTok’s users.”  

It’s unclear whether any progress has resulted — neither UMG nor TikTok will comment — but ByteDance currently faces a more urgent, existential issue now that the Speaker of the House of Representatives has attached what’s being called the TikTok national security bill to the foreign aid package for Ukraine and Israel that is expected to move quickly through Congress. The House may vote on it as early this weekend and the Senate is expected to act quickly. If it passes in both houses, President Biden has promised to sign it immediately.  

Officially titled The Protecting Americans From Foreign Adversary Controlled Applications Act, the proposed legislation was drawn up after White House national security and intelligence leaders briefed House lawmakers on the potential dangers that TikTok, which is used by 170 million Americans, poses to the nation.  

What the TikTok National Security Bill Does

If Biden signs the bill into law, ByteDance will have approximately a year from its enactment — the original bill gave it just 90 days — to sell TikTok to a buyer in a country that the United States does not consider a foreign adversary. If ByteDance, which has ties to the Chinese Communist Party and is subject to its government, refuses to divest itself of TikTok or does not meet the deadline, then the app could be banned from being downloaded or used in the United States.

Rick Lane, TikTok Coalition.org leader and child safety advocate, says the TikTok bill “is moving forward very quickly. The language between the House and Senate is so close — they are millimeters apart, and I think agreements are being made to bring them together. Unless something drastic happens, I don’t see this bill’s momentum slowing down, no matter who’s on the other side. That is why adding it to the foreign aid bill makes sense.”

At a time when Congress is mired in ideological infighting, particularly among Republicans, the House of Representatives moved with remarkable speed to mark up and pass the bill and send it to the Senate.  

Despite a deluge of calls and messages from TikTok users protesting the legislation, the House passed it, 352 votes to 65, on March 13 — less than a week after national security and intelligence officials held a classified briefing for an executive session of the House Energy and Commerce Committee. A music industry source familiar with activity on Capitol Hill tells Billboard that, before the briefing started, “members and staffers devices were taken away, and the committee room’s AV systems and the like were removed.” Following the morning briefing, the committee marked up the bill that afternoon and voted unanimously to advance it to the full House of Representatives. 

A classified intelligence briefing was also held in the Senate and prompted similar remarks of concern. Republican senator from Missouri Eric Schmitt told Axios that the Chinese-controlled platform’s “ability to spy is shocking.”  

“We don’t know exactly what was briefed,” says the music industry source. “But what is absolutely crystal clear is that whatever has been presented to Congress members by the intelligence community is clearly driving this. You don’t see — particularly Congress members — reacting with that kind of dispatch and unanimity.” 

A ‘Once-in-a-Lifetime’ Alarm

“This is really a once-in-a-lifetime kind of alarm,” the source adds. “People who have been around the Hill for decades don’t remember there ever being this level of concern.”

An unclassified 2024 Annual Threat Assessment issued by the Office of the Director of National Intelligence (ODNI) in February may offer a glimpse of these security concerns. The assessment reported that “China is demonstrating a higher degree of sophistication in its influence activity, including experimenting with generative AI. TikTok accounts run by a [People’s Republic of China] propaganda arm reportedly targeted candidates from both political parties during the U.S. midterm election cycle in 2022.” 

In response, a TikTok spokesperson referred Billboard to its written response to the ODNI, dated March 15, which asserts that the social media platform “regularly takes action against deceptive behavior, including covert influence networks throughout the world, and has been transparent in reporting them publicly. TikTok has protected our platform through more than 150 elections globally,” the response continues, “and is continuing to work with electoral commissions, experts, and fact-checkers to safeguard our community during this historic election year.” 

In addition to the intelligence briefings, Billboard obtained a slide presentation that one Capitol Hill source says has been shown to staffers for over 40 senators. The presentation cobbles together previously published articles, analyses and reports about TikTok’s alleged dissemination of disinformation and propaganda to much of the same demographic that uses the app for music discovery. (According to a 2024 Pew Research Center report, 56% of U.S. adults 18 to 34 use the platform and 52% of the users in this age group have posted a video to the platform.)  

‘TikTok Is a News Organization‘

As one tech policy expert says, “TikTok is a news organization. Trends are indicating that up to 40% of adults 18-to-29 will be getting their news from TikTok in 2024. It’s their CNN or Fox News or MSNBC.”  

One of the first slides, titled “TikTok Has Rapidly Evolved From an Entertainment to a News Platform, Enormously Expanding Its Influence on The U.S. Population,” includes a graph built from Pew Research Center data that shows 43% of TikTok users regularly got their news from the platform in 2023, nearly double the 22% that did so in 2020. Only X (59%) and Facebook (54%) were higher. And nearly a third of that 43% were adults under 30 years of age.  

Although music’s role in TikTok’s alleged dispersal of disinformation is not examined in the presentation, the tech policy expert says it’s definitely a factor. A 2023 report released by the rights management startup Pex in February revealed that 85% of TikTok videos contain music, more than YouTube (84%), Instagram (58%) and Facebook (49%), and the tech policy expert says that music played on the platform often functions as an emotional gateway to propaganda.  

“The power of music is what draws people to social interaction,” the source says. “They’re taking music that gets people excited and, for instance, following them with horrific videos — and the interaction of those data points creates this powerful tool to affect policy.” The expert adds that TikTok’s algorithm enables the platform to essentially tailor its approach to each user. “It’s no longer just one size fits all; the ability now is to take visual cues, music and sound and target each individual with what sets them off — and they can do that on a massive scale.  

“The argument in favor of TikTok is that Meta and Alphabet are collecting data from even more people, but they are not based in an adversarial country,” the expert continues. “There’s another key difference as well. TikTok sends you videos that they think you are interested in no matter what. Most young people want to be influencers. In order to be an influencer on TikTok, you have to follow what’s trending, so your video is blasted to more people. You tag along with feeds. In the policy realm, if they want to influence public policy, your view is going to be whatever direction that feed is going in.”

A TikTok spokesperson responds: “There is absolutely no evidence to these assertions. We have clear rules prohibiting deceptive behaviors.”  

‘They Deserve It’

The music industry’s view of the proceedings in Washington is mixed. The perspective of artists and songwriters is arguably best expressed by David Lowery, the artist rights activist and frontman for the bands Cracker and Camper Van Beethoven, who also was one of more than 200 creators that, in early April, signed an open letter to tech platforms urging them to stop using AI “to infringe upon and devalue the rights of human artists.”

“The rates TikTok pays artists are extremely low, and it has a history — at least with me — of using my catalog with no licenses,” Lowery says. “I just checked to make sure and there are plenty of songs that I wrote on TikTok, and I have no idea how they have a license for those songs.” 

As a result, Lowery says that while “I’m kind of neutral as to whether TikTok needs to be sold to a U.S. owner, the bill pleases me in a general way because I feel that they’ve gotten away with abusing artists for so long that they deserve it. I realize the bill doesn’t punish them for doing that,” he continues, “but that’s why a lot of musicians feel they really deserve it.” 

The consensus among label executives is that TikTok is not going anywhere, but were the app banned in the United States, they wouldn’t spill many tears. In early April, Billboard reported that two months after UMG pulled its music from TikTok, its market share and chart appearances had not been greatly affected. And though numerous UMG artists have devised workarounds to maintain a presence on TikTok, one senior label executive says, “When you’re looking at the competitive set for TikTok, you see a migration to YouTube, Instagram and Snap. And those platforms see a real opportunity, so they’re starting to lean in. The absence of TikTok would just mean migration to other platforms and, frankly, because those platforms monetize better, even if you lose a significant chunk of your audience, you’re still going to make more money.”

$8.7 Million For Lobbyists

Capitol Hill sources say ByteDance has enlisted a small army of lobbyists to keep TikTok on U.S. mobile devices. In 2023, ByteDance spent $8.7 million on lobbyists, according to the nonprofit government transparency organization OpenSecrets. That’s almost double the $4.9 million it dropped in 2022, although a TikTok spokesperson attributes the year-to-year increase to “a unique, one-time higher expenditure in the third quarter of 2023 that reflects the vesting of Restricted Stock Units related to the launch of our U.S. buyback program.” (Data for 2024 lobbyist expenditures were not available at publication time.) 

That 2023 outlay was the fourth-highest amount spent on lobbyists by a tech company that year, behind Meta ($19.3 million); Amazon.com (nearly $19.3 million) and Alphabet (almost $12.4 million). In 2019, ByteDance spent less than $1 million on lobbyists.  

Lobbyists hired by ByteDance include Rosemary Gutierrez, the former deputy chief of staff for Democratic Senator Maria Cantwell of Washington, who chairs the Senate Commerce Committee — which will review the TikTok legislation before a floor vote is taken — and Kellyanne Conway, former senior counselor to President Donald Trump. Conway is reportedly considering joining Trump’s reelection campaign, but last month, Politico reported that she was working for the conservative Club for Growth to lobby on TikTok’s behalf.   

One of the Club for Growth’s biggest donors is billionaire Jeffrey Yass, who owns 15% of ByteDance, which is reportedly worth roughly $40 billion. Yass’ trading firm, Susquehanna International Group, is also the largest institutional shareholder — 2% — of Digital World Acquisition Corporation, which merged with Trump Media & Technology Group, the parent company of the former president’s Truth Social app, and took it public in late March. (The New York Times reported that it’s unclear if Susquehanna still owned the shares at the time of the IPO.) 

Given Yass’ support of Trump, it’s not shocking that, after attempting to ban TikTok during his time in office, Trump has said on social media and in interviews that though he still considers TikTok a national security risk, he has reconsidered banning the platform. One reason he has cited is that such a move would benefit Meta and its social media app Facebook. Trump has made no secret of his enmity for Meta’s chairman/CEO Mark Zuckerberg and Facebook, which banned him in 2021. (Trump was reinstated in 2023.)  

The Taylor Factor

The news last week that Taylor Swift had restored her Taylor’s Version songs to TikTok in the run-up to the April 19 release of her new album The Tortured Poets Department led to speculation that the superstar singer-songwriter — who has often spoken out for artists’ rights — could be weaponized by TikTok in its standoff with UMG. In Washington, however, TikTok Coalition leader Lane says, “Taylor Swift being or not being on TikTok has never come up in any meeting I’ve been in on Capitol Hill.” He sees Swift’s return to the app as “a business decision” that’s no different than President Biden’s and Congress members’ presence on the app, or even UMG’s continued talks with TikTok. “It doesn’t diminish the strong bipartisan/bicameral support within Congress and the White House that TikTok is a clear and present danger to the U.S. national security and needs to be divested from ByteDance,” he says.  

Trump’s sway over the GOP has some on Capitol Hill predicting that passage of the TikTok National Security bill in concert with the foreign aid package is not a slam dunk. “It’s hard to say how it’s going to play on the Republican side,” says the music industry source familiar with the Capitol Hill proceedings. “Because while they’re feeling pressure from the former President on one hand to oppose the bill, they are also feeling heat from their constituents to support it.”