It’s possible that I shall make an ass of myself. But in that case one can always get out of it with a little dialectic. I have, of course, so worded my proposition as to be right either way (K.Marx, Letter to F.Engels on the Indian Mutiny)
Tuesday, August 11, 2020
Hong Kong's new security law is transforming the city even faster than expected
Hong Kong (CNN)It's been less than six weeks since a security law banning secession, subversion and collusion came into force in Hong Kong. But it's already having a dramatic effect on the city's political, media and online spheres.
A number of top executives were arrested, including the paper's multi-millionaire owner Jimmy Lai. Police said Lai faced charges of colluding with foreign countries, a crime under the new law
Lai had strong ties in Washington, particularly with the Republican Party, and has testified before US Congress in the past.
Hours later on Monday, Agnes Chow, a 23-year-old pro-democracy politician, was arrested on suspicion of inciting secession, another new offense. Chow is a former member of Demosisto, a political party founded by prominent activist Joshua Wong that was disbanded shortly after the security law came into force.
Another former Demosisto leader, Nathan Law, has fled overseas, where he is being sought by Hong Kong police.
Prominent Hong Kong democracy activist Agnes Chow looks out of a car window while being driven away by police from her home after she was arrested under the new national security law in Hong Kong late on August 10, 2020.
Earlier this month, a dozen pro-democracy candidates were barred from standing in upcoming legislative elections on national security grounds. Soon after, the elections were postponed until next year, which the government said was due to a recent spike in coronavirus cases in the city.
When the security law was introduced, the government offered assurances that the legislation was limited in scope and would -- in the words of Hong Kong leader Carrie Lam -- only target "an extremely small minority of offenders while the life and property as well as various legitimate basic rights and freedoms enjoyed by the overwhelming majority of citizens will be protected."
Since then 24 arrests have been made using the law, including protesters and students over social media posts. More broadly, the law has also stymied the work of a number of prominent pro-democracy figures -- and now one of the city's most-popular newspapers. That has led to fears that Hong Kong is rapidly transforming into a city where political opposition is muzzled, its once free-wheeling press cowed, and online dissent carries the risk of imprisonment. Press crackdown
Apple Daily, founded by Lai in 1995, has long been the city's loudest, and most salacious, anti-government voice.
The tabloid, which mixes celebrity gossip with political coverage, has struggled to attract advertisers due to its stance, and Lai has faced harassment, threats, and multiple criminal cases for his activism.
Many observers, including Lai, had predicted that he and the paper would be targeted under the new law, but Monday's raid was nevertheless met with shock by many in Hong Kong, particularly due to the scale of the police operation, which was livestreamed online by Apple Daily's own reporters.
Following the arrests, "Free Jimmy Lai" quickly trended on social media, and hundreds of people -- spaced out to comply with coronavirus restrictions -- queued into the early hours of Tuesday to buy copies of Apple Daily.
By 9 a.m., some shops were reportedly sold out, despite the paper printing half a million copies, almost eight times as many as usual, in anticipation of such a run. Tuesday's front page read "Apple Daily shall fight on."
In a statement, the city's Foreign Correspondents' Club said Monday's actions were a "direct assault on Hong Kong's press freedom and signal a dark new phase in the erosion of the city's global reputation."
The moves against Apple Daily were also condemned by politicians in the US and Europe, international press groups, legal commentators, and the editorial board of the New York Times, which called them the "clearest signal that China intends to make full use of that sweeping new legislation to stifle free expression and undermine Hong Kong's pro-democracy movement."
An official representing the Chinese Foreign Ministry in Hong Kong said Monday that the FCC had "misrepresented the truth, heaped groundless accusations upon the National Security Law and law-enforcement efforts of the Hong Kong police, and tried to whitewash and justify Jimmy Lai and other criminal suspects."
Copies of the Apple Daily newspaper - paid for by a collection of pro-democracy district councillors - sit on a cart before being handed out in Hong Kong on August 11, 2020. Changing environment
Speaking to CNN after Monday's raid, pro-democracy lawmaker Claudia Mo said the city's opposition was "being pushed into a dead end."
Apple Daily was the "last bastion" of press freedom in Hong Kong, she added. "(The government) is sending a very dire signal not only to the local press but also the foreign press in Hong Kong: you watch out."
Any doubt that the arrests of Lai, Chow and others were intended to send a message could be dispelled by Chinese state media's coverage, which laid it out clearly.
The state-owned newspaper China Daily said Lai's arrest was the cost of "dancing with the enemy," and said that "instead of being grateful for having been condoned for the offenses he committed before the enactment of the new national security law ... Lai continued with his treacheries, including intriguing with foreign elements to undermine national security."
Another state-backed paper, Global Times, quoted the prominent Chinese legal theorist Tian Feilong as saying that under the new law "the legal boundaries have become much clearer."
"Opposition groups should know how to adjust to a changing environment," Tian said.
They may be trying to adjust, but as this week's developments show, the environment is changing faster than many expected.
UPDATES Intense clashes in Belarus on 2nd day of protests following contested presidential election
Police used tear gas and stun grenades on thousands of protesters in Minsk.
MINSK, PORTLAND, BEIRUT IT LOOKS THE SAME BECAUSE IT'S THE SAME STRUGGLE
There were intense clashes in Belarus' capital Minsk on Monday night as security forces sought to violently disperse thousands of protesters who gathered for the second day in a row to demand that the country's authoritarian leader, Alexander Lukashenko, step down following a contested election.
Large crowds of protesters filled several parts of central Minsk, as police and heavily armed interior ministry troops indiscriminately attacked them, throwing stun grenades and reportedly firing rubber bullets. Authorities said at least one protester was killed.
The protests appeared to be swelling and demonstrators became increasingly emboldened, with police struggling to disperse them. On some streets, video appeared to show demonstrators using garbage dumpsters to build barricades and firing fireworks at the police officers.
Clashes were also reported in a number of other cities across Belarus, where protests broke out. Opposition social messenger channels urged people to gather on the streets and stand their ground against the police.
A nationwide strike has also been called for Tuesday.
The protests began Sunday night after official results from a presidential election gave Lukashenko 80% of the votes and his main opponent, Svetlana Tikhanovskaya, just 10%, amid suspicions of widespread vote rigging.
Tikhanovskaya, 37, a former teacher and stay-at-home mother, has become the head of the swelling protest movement and in the weeks before the election attracted the largest political demonstrations in Belarus since the fall of the Soviet Union. Lukashenko, 65, often known as "Europe's last dictator," has been in power for 26 years. The current protests are seen by many as an unprecedented challenges to his rule.
Tikhanovskaya accused Lukashenko of massive falsification in the election and demanded he hand over power peacefully to her so that new elections can be held.
Several thousand opposition supporters gathered peacefully in Minsk on Sunday night after the election, but were immediately violently attacked by riot police who used water cannons and stun grenades and detained and beat people seemingly at random. Several demonstrators were injured, at least one severely.
Lukashenko has dismissed Tikhanovskaya's demand he step down and on Monday even justified the crackdown, deriding the protesters as "sheep" controlled by European countries.
"I warned there won't be a Maidan, no matter who wanted it," Lukashenko said earlier on Monday, according to Belarus' state news agency, referring to Ukraine's popular revolution in 2014 that toppled an autocratic president. "And so it has to be quietened down, to be calmed down. The response will be adequate. We will not allow them to blow up the country."
Protesters returned Monday evening, after organizers advised them to buy helmets and goggles in anticipation of more police violence. Initially, small crowds in different groups moved towards the city center, where they were quickly attacked by police. But as the night wore on, the crowds grew in size, with thousands of people blocking roads and police officers seeming to struggle to contain them. Videos show that hundreds of cars stopped and honking in support. Meanwhile, explosions from stun grenades and fire works were heard consistently throughout the night.
Belarusian Interior Ministry said that one demonstrator was killed after an "improvised explosive device" went off in his hand while riot police were dismantling a barricade. It was not possible to verify the police's version of events.
The internet in Belarus has been partly shut down for two days, with many messenger apps not working properly. Belarus' government also refused to give journalists from most foreign news organizations permission to enter the country.
European countries on Monday expressed concern about the election and the crackdown on demonstrators. The president of the European Union, Charles Michel, tweeted for the government to respect "basic human rights" and the right to assemble.
United States officials also criticized the election, with U.S. Secretary of State Mike Pompeo issuing a statement, on Monday before the protests, saying the vote had not been "free and fair," and condemning "intimidation tactics" by the authorities.
Lukashenko recently sought to improve relations with Western countries as a counterweight to a more overbearing Russia, with which Belarus is already significantly integrated. The U.S. last year restored diplomatic relations with Belarus after a decade-long pause, caused by another crackdown by Lukashenko after an election in 2010.
Pompeo did not announce any U.S. action -- amid calls from some in the European Union for sanctions on Belarus -- nor did he offer suggestions for a path forward, such as calling for Lukashenko to hold new elections.
China, and Belarus' key ally, Russia, quickly recognized Lukashenko's re-election. Both President Vladimir Putin and China's leader, Xi Jinping, congratulated the Belarus president.
Tikhanovskaya said Sunday she would not join Monday's protests to "avoid provocations." Her team said authorities would surely use her presence at the protests as a pretext to jail her for allegedly inciting riots.
She has called for authorities to engage in negotiations with her for Lukashenko to leave power, and has promised to pursue legal options to challenge the election results. Her team has claimed that counts in polling stations in Minsk show that, in reality, she received five to six times more votes than Lukashenko. They also said the record number of early votes -- 40% of votes -- suggest widespread falsification.
At a press conference Monday morning, Tikhanovskaya called on anyone who believed their vote had been stolen "not to keep silent."
"The government [isn't] listening to us, it has completely broken with the people, but I should repeat that we are for peaceful transitions and the government ought to think about now how to hand over power through peaceful means, because at the moment they only have one way: violence against their own people," Tikhanovskaya said, according to the local Belarus' news outlet Tut.by.
Besides her appearance at the press conference and her brief appearance to file a complaint at her polling station on Monday, she has not been seen in public. For much of Sunday she was in hiding, worried that authorities would arrest her.
Tikhanovskaya has become an unexpected leader of the opposition. She reluctantly became a candidate after her husband, a popular blogger, was jailed and prevented from running against Lukashenko. But she has become a rallying figure for the opposition in her own right, joining with two other women, Veronika Tsepkalo and Maria Kolsenikova, to channel a wave of dissatisfaction with Lukashenko.
Discontent with Lukashenko has been fueled by a poor economy and weariness with his long rule and allegations of corruption. But it has also been boosted by his handling of the coronavirus pandemic, which Lukashenko has dismissed as a "hysteria." For months, the controversial leader has refused to impose significant quarantine measures despite rising cases and pleas from the World Health Organization.
COVID lifts revolutionary candidate in Belarus
A female candidate is challenging authoritarian President Alexander Lukashenko, amid unrest over the pandemic. ABC’s Patrick Reevell reports on Belarus’ movement for change.
Belarusian challenger flees to Lithuania amid protests
The Lithuanian foreign minister says that the leading opposition candidate in Belarus’ presidential election has fled her country and is now “safe” in Lithuania
By YURAS KARMANAU Associated Press 11 August 2020,
MINSK, Belarus -- The top opposition candidate in Belarus' presidential vote who refused to concede her defeat has fled the country amid a massive police crackdown on protests, Lithuania's foreign minister said Tuesday.
Linas Linkevicius' said on Twitter that Sviatlana Tsikhanouskaya is now “safe” in Lithuania.
Tsikhanouskaya previously dismissed the official results of Sunday's election showing authoritarian President Alexander Lukashenko winning a sixth term by a landslide. Thousands of opposition supporters who also protested the results met with a tough police crackdown in Minsk and several other Belarusian cities for two straight nights.
On Monday, a protester died amid the clashes in Minsk and scores were injured as police used tear gas, flash-bang grenades and rubber bullets to disperse the demonstrators. Interior Ministry spokesman Alexander Lastovsky said the victim intended to throw an explosive device, but it blew up in his hand and killed him.
Lukashenko, who has led the ex-Soviet nation of 9.5 million with an iron fist since 1994, derided the opposition as “sheep” manipulated by foreign masters and vowed to continue the tough crackdown on protests despite Western rebukes.
Election officials said Lukashenko won a sixth term in office with 80% of the vote, while Tsikhanouskaya got 10%.
When asked on Monday if she was planning to go abroad to avoid being arrested, Tsikhanouskaya said she had no such plan and saw no reason why she would be arrested.
But after submitting her formal demand for a recount to Belarus’ Central Election Commission, she told her allies: “I have made a decision, I must be with my children.”
She had previously sent her children to an unspecified European country after receiving threats.
“She has the right to make any choice,” Tsikhanouskaya's campaign spokeswoman, Anna Krasulina, told The Associated Press Tuesday. “She has done great things for the country. She has woken up the Belarusians.”
Tsikhanouskaya, a 37-year-old former English teacher without any prior political experience, entered the race after her husband, an opposition blogger who had hoped to run for president, was arrested in May. She has managed to unite fractured opposition groups and draw tens of thousands to her campaign rallies — the largest opposition demonstrations in Belarus since the 1991 collapse of the Soviet Union.
“We don’t agree with (the election results), we have absolutely opposite information,” Tsikhanouskaya told the AP on Monday. “We have official protocols from many poll stations, where the number of votes in my favor are many more times than for another candidate.”
Economic damage caused by the coronavirus and Lukashenko’s swaggering response to the pandemic, which he airily dismissed as “psychosis,” has fueled broad anger, helping swell the opposition ranks. The post-election protest, in which young demonstrators — many of them teenagers — confronted police, marked a previously unseen level of violence.
Rumors that Tsikhanouskaya had left the country began circulating among the protesters as they confronted police overnight, but the news didn't discourage them from continuing their resistance.
“She had a clear choice: to be in a Belarusian jail or to remain free in Lithuania,” said 21-year-old protester Kirill Kulevich. “Tsikhanouskaya has called herself a symbol of change, but they are forcing us to continue living as before.”
Another protester, 20-year-old Anna Vitushko, said that protests will continue.
“People are protesting against the crude falsifications, and her departure doesn’t mean anything," Vitushko said. “If Lukashenko won 80%, why does he need riot police, rubber bullets and water cannons? They can cheat a few percent of the population, but they can't cheat the entire country.”
Scores were detained as police relentlessly dispersed scattered groups of protesters in Minsk overnight.
The police crackdown on protesters drew harsh criticism from the European Union and the United States and will likely complicate Lukashenko’s efforts to mend ties with the West amid tensions with his main ally and sponsor, Russia.
U.S. Secretary of State Mike Pompeo said in a statement that the election was not “free and fair,” and added: “We strongly condemn ongoing violence against protesters and the detention of opposition supporters.”
Police attempted to move protesters down the street as demonstrations continue in the wake of George Floyd's death.
The European Union condemned the police crackdown and called for an immediate release of all those detained.
In a joint statement, EU foreign policy chief Josep Borrell and the EU commissioner responsible for relations with Europe’s close neighbors, Oliver Varhelyi, lamented that “the election night was marred with disproportionate and unacceptable state violence against peaceful protesters.”
———
Vladimir Isachenkov in Moscow and Liudas Dapkus in Vilnius, Lithuania, contributed to this report.
AI Robotic process automation battle for a bigger prize: automation everywhere
Robotic process automation solutions remain one of the most attractive investments for business technology buyers — this despite our overall 2020 tech spending forecasts, which remain at the depressed levels of -4% to -5% for the year.
Relative to previous surveys, we do see some softness in traditional RPA strongholds such as large financials, insurance and giant public and privates. But RPA relative to other technology investments remains at the top as the sector with the highest spending momentum – neck and neck with that of machine learning and artificial intelligence, and ahead of containers and even cloud computing.
In this week’s Wikibon CUBE Insights, powered by ETR, we want to update you on the latest RPA trends and share fresh ETR survey data with our communities.
Key points in this segment
Despite our tepid spending forecast for the year, demand for RPA software continues to grow at a 60% to 70% clip. Remember, RPA mimics human computer interactions using software scripts or robots that execute human tasks in a runtime assembly of discrete steps. The practice first became popular for back-office functions – mostly as unattended bots.
The pandemic appears to be accelerating front-office adoption and that’s creating a bit of a schism between front- and back-office processes, strategies and implementations. Digital transformation initiatives, in many ways, create the connective tissue between the front and back of the house. We see that connection as a linchpin of digital efforts.
The competition is capable
Competitive dynamics are heating up. The two emergent leaders, Automation Anywhere Inc. and UiPath Inc., are separating from the pack. Large incumbent software vendors such as Microsoft Corp., IBM Corp. and SAP SE are entering the market and positioning RPA as a feature. Meanwhile, the legacy business process players continue to focus on taking their installed bases on a broader automation journey. However, all three of these constituents are on a collision course in our view where a deeper automation objective is the “north star.” Two material changes to our scenario
First, we have expanded our thinking on the RPA total available market and we are extending this toward a broader automation agenda more consistent with buyer goals. In other words, the TAM is much larger than we initially thought and we’ll explain why.
Second, we no longer see this as a winner-take-all or winner-take-most market. In this segment we’ll look deeper into the leaders and share some new data. In particular, although it appeared in our previous analysis that UiPath was running the table on the market, we see a more textured competitive dynamic setting up and the data suggests that other players, including Automation Anywhere and some of the larger incumbents, will challenge UiPath for leadership in this market. As with many developing software markets, the ultimate leader is not crystal-clear at this point.
The effects of the pandemic
Conventional wisdom suggests, and we agree, that the automation mandate has been accelerated by several years due to Coronavirus. Three points here: 1) Yes, COVID has put digital transformation on the front burner of executives’ priority lists; 2) Automation isn’t trivial and there’s a difference between wanting and achieving; and 3) We believe there’s another driver for the automation mandate that will survive a vaccine or herd immunity, and that’s the productivity gap. Human labor alone can’t solve the world’s biggest problems
The chart below underscores this reality point and was first brought to our attention by author David Moschella.
Specifically, we’ve seen a noticeable decline in productivity in the U.S. and the EU since the personal productivity boom brought forth by the personal computer and the internet. The premise put forth by Moschella is that in order to solve the grand challenges of the 2020s and beyond, automation is a mandate.
Climate change, global competitiveness, aging populations and infrastructure, massive deficits, mass immigration, sustainable food sources and healthcare will all require huge injections of automation into the system to solve problems associated with these areas. Human labor isn’t the answer.
New thinking on the RPA total available market
The diagram below updates our expectations on the TAM for RPA. The first takeaway is we envision a market for business automation well beyond software bots, which are represented in the first two layers — that back-office and front-office divide, if you will. And we see those two coming together in the third layer through digital transformation initiatives. But we also envision a massive market for automated decision-making and very deep business integration where systems are communicating to each other and making real-time decisions.
We’re not going to go deep into this because it’s a bit academic, but suffice to say this is an enormous market comprising many layers of the tech and services stack. And this presents serious opportunities for multiple players. RPA spending survey data
The chart below is one of our favorites because it plots two important metrics – Net Score (spending momentum on the y axis) and Market Share (pervasiveness in the survey – on the x axis) for the RPA leaders. Net Score is a simple but effective measure that for this last survey asks buyers, “Are you spending more or less in the second half of the year than you had originally planned?”
Net Score is derived by subtracting the lesses from the mores and is shown in the upper right of the chart in the green highlights. Note the total N in the survey is 1,192 and you can see the number of responses for each vendor in the upper right in the gray. We eliminated any RPA vendor that didn’t get at least 25 responses.
Net Score: Automation Anywhere and UiPath trade places
You can see on the x axis that Automation Anywhere and UiPath have essentially traded positions from our last update. This indicates that relative to the first half of 2020, Automation Anywhere customers expect greater spending momentum in the second half of the year than UiPath customers. UiPath at a 62% Net Score is still very high, but this marks the first time since our reporting that AA has taken the Net Score lead. And the small arrows show the general direction of their respective momentum, which we’ll drill into later.
On the chart you can also see Blue Prism and Pegasystems and though they’re significantly below Automation Anywhere and UiPath, these are respectable Net Scores for more mature players. Again, we don’t consider these two to be RPA specialists. Especially Pega: The company has established an automation play well beyond RPA and has built an awesome business. In many ways it’s benefiting from the hype being created by the newbies. This is a company with $1 billion in revenue and a valuation of more than $9 billion. The stock is near its all-time high and it took the company to an initial public offering with no outside capital.
One more thing on this chart: You can see Microsoft with Power Automate crashing the party with a 1.0 product that is making some noise.
A note of caution: Net Score is a forward-looking metric and measures spending momentum relative to past actuals or past expectations, depending on the time of year the survey is administered. For the July survey, ETR asks about second-half spending expectations relative to the first half. Although a higher Net Score is a sign of strength, readers must consider that if spending was soft in the first half, a company may show elevated Net Score levels as a result of an easier comparison. The reverse is also true: If a vendor had strong spending in the first half, it may have a more difficult compare in the second half, presenting a Net Score headwind. Market share favors UiPath in the survey
On the x axis you can see UiPath has the Market Share lead, but we want to remind you what this is. Market Share is an indication of pervasiveness in the survey and is calculated by dividing the number of mentions for a vendor in a sector by the total mentions in the survey. So you can see that UiPath has the share of voice lead but is still under 10% of the total survey base. So there’s lots of room for this market to grow.
We want to make an important note because UiPath has historically been a collection of point products with a big emphasis on simple end-user adoption, whereas Automation Anywhere’s go-to-market typically involves going into large accounts and selling an end-to-end digital transformation initiative to the line of business.
As we stated earlier, these two and other companies are on a collision course because that is the big prize. UiPath has restructured its product and pricing strategy to go after this larger scale opportunity. But it stands to reason that UiPath has a bigger presence in the ETR data set thanks to its heritage. That makes Automation Anywhere’s No. 1 Net Score position even more impressive.
The other nuance is that ETR tends to be somewhat weighted to the information technology department side of the house, and although it most certainly picks up line-of-business spending, there’s a bias in the data. So that means RPA is most likely even stronger in the context of spending initiatives – and it’s already No. 1 relative to other sectors. How Net Score has changed for the leaders
The chart below shows the change in Net Score or spending momentum for Automation Anywhere, UiPath, Blue Prism and Pegasystems over three survey periods, including last October, this April at the height of the U.S. lockdown and the most recent July survey.
Here you see that Automation Anywhere is accelerating and taking the lead over UiPath and is the only one on the chart growing Net Score. Again, UiPath remains elevated despite the relative decline from previous surveys. We have to caution you again that Pegasystems, for example, is crushing it in the market. The stock is up nearly 40% so far this year and over 60% for the last 12 months. So because it’s not so RPA-only focused and is not really an IT play per se, the survey data has to be digested in that context. But you do see Pegasystems coming down from elevated levels last October. A time series view of Net Score
This next chart below simply extends the timeframe and shows more granularity of survey data back to January 2018, meaning 11 quarterly survey snapshots. This really underscores the power of the ETR platform and you can stretch the data over time.
You see Automation Anywhere overtakes UiPath for the first time since we started capturing the segment. UiPath and the others show a noticeable decline in Net Score this survey. Microsoft is an exception since it just started showing up in the data and is elbowing its way into the market. A time series view of Market Share
This next chart below shows our other favorite metric, Market Share or pervasiveness in the data set over a time series.
Remember this data is based on mentions so it’s not an indication of spending amount. But it is a data point and we pay attention to it. You can see how UiPath broke away from the pack in October 2018 and that coincides with the company’s big push on events such as UiPath Forward and training. The company has really done a good job of building its presence and awareness in the market.
Note that we’ve superimposed the chart in the upper left corner for context. It shows Net Scores in the green and Shared N in the gray and is sorted on Shared N. This refers to the number of mentions in the data set for each vendor out of the 1192 total responses. Some of these have small Ns, so we’re not going to put too much emphasis on this except that the UiPath escalation is notable.
Big market but the real money is with the buyers
We discussed the automation mandate and the COVID-19 wrecking ball effect. But it’s more than that. The productivity pressures on the U.S. and the EU in particular make it exceedingly difficult to throw labor at the world’s grand problems.
So that has opened up an enormous opportunity for technology companies and practitioners to drive automation. We said this during the initial big data era – in fact, Peter Goldmacher had this discussion with us on theCUBE in the early part of last decade. Those companies that can implement automation are going to be the big big winners. It’s not just the tech players. Of course as we’ve seen, many of the big tech companies are benefiting from enormously from mega-automation, but the broader set of industries has massive upside.
What this sets up is a multidimensional competitive environment. We have Automation Anywhere and UiPath battling it out to achieve escape velocity. Automation Anywhere just brought in Chris Riley to run go-to-market efforts, so you know it’s serious: He’s a player who understands complex enterprise selling. And UiPath is hiring engineers as fast as they can.
The other dimension is a classic battle of best-of-breed specialists such as AA and UiPath against the bundlers selling automation as a feature of their services. Microsoft, IBM, SAP and others all see automation as a huge opportunity and everyone’s going to hop on the bandwagon because this is worth at least hundreds of billions of dollars.
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Twitter shows interest in acquisition as TikTok plans to sue over ban
Twitter Inc. is reportedly the latest company interested in acquiring Chinese-owned social video app TikTok, just as app owner ByteDance Ltd. claims it will sue the Trump administration this week over a ban.
The saga of TikTok, highly popular among young online users, is colorful to say the least. With its roots in China, where it’s known as Douyin, the app has arguably become the largest challenger to U.S. social media tech companies in years.
Its Chinese ownership has led to accusations that the app is being used to spy on behalf of the Chinese government. Bytedance denies spying on behalf of the Chinese government and has established a separate arm in the U.S. to placate critics but with little success in terms of stopping criticism.
President Donald Trump had been threatening to ban the app in the U.S. for weeks and finally followed through on Thursday with an executive order that would, for all intents and purposes, ban TikTok within 45 days if it does not find new owners.
The order doesn’t state that TikTok the app is banned; instead, the U.S. will prohibit “any transaction by any person” with ByteDance. As The Guardian noted, the broad language is open to interpretation: It could simply mean that U.S. advertisers would be banned from buying ads on the platform, but it also could mean that even downloading the app would be considered a transaction.
Microsoft Corp. was the first major U.S. company to show interest in acquiring TikTok from ByteDance last week. The exact status of those talks remains unknown other than they are yet to result in a deal. Microsoft founder Bill Gates has come out against a potential acquisition, saying that the acquisition would be a “poison[ed] chalice” and “no simple game” because Microsoft would have to contend with a whole new level of moderation.
Twitter, which owned a predecessor to TikTok called Vine that it acquired in 2012 for $30 million before closing the service in 2016, is said to have held preliminary talks with ByteDance over a possible acquisition. TechCrunch reported that there are serious questions as to whether a deal might be possible given that Twitter may not have the capacity or investor support to raise the money required.
Twitter itself has a market valuation of $29 billion, whereas the parts of TikTok currently on the table — operations in the U.S., Australia, Canada and New Zealand at the least — could have a valuation of between $15 billion and $50 billion. Microsoft, by comparison, has a market cap of $1.6 trillion, with $136.6 billion in cash on hand as of November, and would easily win any bidding war against Twitter should it come to that.
Whichever company ends up possibly buying TikTok — and other bidders may yet emerge — the clock is now ticking. The ban goes into effect Sept. 15 if TikTok remains Chinese-owned at the time.
Whether the ban stands is another matter. According to the South China Morning Post, TikTok intends to file a federal lawsuit as soon as Tuesday. The lawsuit will argue that the president’s action is unconstitutional because it failed to give the company a chance to respond and that the U.S. government’s national-security justification for the order is baseless.
The due process argument is one made before by Huawei Electronics Co. Ltd., another company banned by the Trump administration in a lawsuit that was struck down in February.
