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The Trump administration’s TikTok policy is incoherent

September 21, 2020, 1:29 PM UTC

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People in China know how to read web sites and use email services banned in the country. They use a technology called a virtual private network, which masks their location. It’s a fact of life in China, one of the many understood digital annoyances for a Westerner traveling there, among bringing a wiped laptop and “burner” mobile phone on the assumption some arm of Chinese cybersecurity will steal your data. (In 2017, when Fortune journalists traveled to Guangzhou for the Fortune Global Forum, an event celebrating international commerce in China, our IT department issued us loaner laptops and phones. This is common practice for big American businesses.)

It caught my eye, then, over the weekend, when The New York Times quoted a Chinese national living in the United States who says she’ll continue to use threatened-to-be-banned WeChat, come what may, but that she’ll likely use a VPN to do so.

Think about that for a moment. The U.S. will force Internet users to use the same tactics as those used to go around Chinese censors because the U.S. is adopting Chinese principles of blocking apps it doesn’t like. (A federal judge over the weekend temporarily stayed the Trump administration’s arbitrary ban against WeChat.)

At the risk of repeating myself, it is an upside-down world. The U.S. is copying Chinese Internet policies. In forcing a sale of TikTok that isn’t a sale at all, the U.S. president is shifting a commercial contract from one American company, Google, to another, Oracle. The Wall Street Journal’s editorial board rightly labels this “corporate cronyism that will damage the U.S. government’s credibility and reputation for free-market rules.”

Meantime, the caudillo’s favored businesspeople promise 25,000 new jobs “over time,” a number undoubtedly snatched from midair. It calls to mind a promise from Alibaba’s Jack Ma that his e-commerce company would create a million U.S. jobs—a figure that never was serious and belatedly was retracted.

The Trump administration picks winners and losers. The world’s leading democracy abandons free markets and due process, not for national security reasons but for show. And craven businesspeople cower lest they upset the man behind the curtain.

***

Fortune’s 2020 Change the World list, our sixth, stresses the important point that no business succeeds alone. Collaboration among companies, even among rivals, shapes many of the inspiring stories in this package—in a Scandinavian effort to make “green” steel, in the campaign to close America’s racial wealth gap, and, above all, in the worldwide race for a COVID-19 vaccine. In the face of unprecedented collective challenges, only cooperation can move the needle.

Adam Lashinsky

@adamlashinsky

adam.lashinsky@fortune.com

This edition of Data Sheet was curated by Aaron Pressman.

NEWSWORTHY

Time is a flat circle. It's just a problem with a few Internet startups. It's just Bear Stearns. Forgive my echoes of investment bubbles past, but controversial Nikola Motor chairman and founder Trevor Milton is out of the company this morning, less than two weeks after Hindenburg Research accused the company of being a gigantic fraud. Fellow board member Stephen Girsky, who was vice chair of GM, takes over for Milton. Shares of Nikola started trading at $65 via a SPAC merger in June and have declined pretty steadily since. They plunged another 30% to around $24 in pre-market trading on Monday.

I hear Bitcoin bells are ringing. Online bank Chime raised almost $500 million in new venture capital backing from the likes of Coatue and Tiger Global in a deal that pushed its private value to $14.5 billion. That's higher than Robinhood's $11.2 billion value, putting Chime at the top of the fintech charts. And crypto startup Kraken got a type of bank charter, as a special-purpose depository institution, from Wyoming in order to connect directly to the federal payments system.

Lethal virtual weapon. German authorities opened a homicide investigation related to a ransomware attack that struck a hospital in Düsseldorf. A 78-year-old woman died after being forced to transfer from the medical facility while its computers were attacked. Still, the attack may not be to blame for the death, says Johns Hopkins professor Thomas Rid. "The causality is not clear," Rid tells Fortune. "Whether the patient would have died without the ransomware incident first, we just don't know." Elsewhere on the police blotter, a grand jury indicted six people for bribing Amazon employees to boost and tank the rankings of items from various third-party sellers.

Onward and upward. On the stock market, Unity Software's debut went well, as the company's new shares trading under the symbol "U" gained 31% on Friday. And Microsoft is paying $7.5 billion in cash for another video game developer, ZeniMax, which owns some major franchises including The Elder Scrolls, Quake, and Fallout.

Let's make a deal. Leading streaming box provider Roku struck a deal with Comcast's NBCUniversal to carry the new Peacock ad-supported video service. Still, consumers can't fully rejoice yet. Peacock still has no deal with Amazon for its Fire platform and AT&T's HBO Max isn't on Roku or Fire.

Out of the frame. Researchers discovered that Twitter's algorithm for displaying cropped pictures of faces may favor those of white people over Black people. Twitter says it is investigating.

FOOD FOR THOUGHT

With another election season nearing its climax, we're all on the lookout for misinformation and fake stories amplified by virality. In an essay for The Atlantic, Renée DiResta, technical research manager at the Stanford Internet Observatory, worries that new A.I. apps will make the problem even worse.

Amid the arms race surrounding AI-generated content, users and internet companies will give up on trying to judge authenticity tweet by tweet and article by article. Instead, the identity of the account attached to the comment, or person attached to the byline, will become a critical signal toward gauging legitimacy. Many users will want to know that what they’re reading or seeing is tied to a real person—not an AI-generated persona. Already, the internet has divided into more and less sanitized spaces: Sites such as 4chan exist for internet users who want unfettered anonymous forums, but the majority of internet users prefer more moderated platforms. The proliferation of machine-generated messaging will enhance the appeal of internet communities in which all participants must validate their identity, or at least their physical existence, in some way. Political debate may migrate to entirely new speech platforms—or carved-out sections of existing platforms such as Twitter or Facebook—that prioritize the postings of users with verified identities or validated pseudonyms.

IN CASE YOU MISSED IT

With Trump’s WeChat ban approaching, here are several alternatives By Robert Hackett

Self-driving cars will hit the Indianapolis Motor Speedway in a landmark A.I. race By Jonathan Vanian

Inside the weird new world of social ‘forex’ trading—where you sign up friends, and some report risky red flags for investors By Brooke Henderson

How data helped keep Red Bull’s F1 team on track during the pandemic By Jeremy Kahn

The activist employee hasn’t gone away By Geoff Colvin

Why I’m giving up my board seat to make room for someone from an underrepresented community By Tim Disney

Black founders have unique talents. We need to make sure they get to use them By Erica B. Smith-Goetz

(Some of these stories require a subscription to access. Thank you for supporting our journalism.)

BEFORE YOU GO

It's not quite the 50th anniversary of Robert Pirsig's amazing travel and philosophy novel Zen and the Art of Motorcycle Maintenance, but it's the 46th. And current events have made the book as relevant as ever. This morning, I recommend starting with a shorter read. Smithsonian Magazine has a great essay about the book's lens on technology and Big Tech. Plus, cool photos from the Smithsonian's collection of Pirsig's manuscript and his motorcycle maintenance tool box. It's Monday–let's get out there and fix things!

Aaron Pressman

@ampressman

aaron.pressman@fortune.com