Monday, August 31, 2020

Tik Tok Trump. Watch Facebook and America’s Software Industry Crash

Facebook’s Mark Zuckerberg shoots himself in the foot so often you wonder he can walk. But this time is extreme – he’s apparently helped convince Trump that Tik Tok and other Chinese-owned apps are dangerous and need to be banned.

Trump, never an analytical thinker and open to anything that he sees helping with re-election, has responded with bans on a number of Chinese-owned apps.

The official Trumpian reasoning is that, because the apps are controlled by a dangerous foreign nation, they could be used for nefarious purposes.

Hmmm. Remembering that what’s “foreign” depends on where you live, and that a lot of countries see the US, especially under Trump, as recklessly dangerous, where else might this principle apply?

Might Facebook, which gathers far more personal data than Tik Tok, be vulnerable in Europe and Asia? What about another big American software company, Oracle, whose servers run at the heart of all kinds of international government and business operations?

Isn’t it problematic for the US to suggest banning foreign apps when we make most of the world’s software?

Consider the worldwide dominance of Microsoft’s Windows and Office 365, Apple’s IOS, Google’s Android, Chrome and Search, Amazon’s AWS, Oracle’s databases, and much, much, more. All of these are far closer to critical infrastructure and have far greater ability to hide dangerous malware than a frivolous cellphone app.

With his Tik Tok decision, Trump is setting a precedent that will provide governments around the world with a clear and powerful rationale for not buying foreign software. Unfortunately, in nearly all cases that will mean not buying American.

The precedent becomes more powerful when you remember Trump isn’t alleging Tik Tok is dangerous, he’s merely saying it could be.

Once other nations accept Trump’s arguments and decide foreign software is potentially dangerous, America is doubly vulnerable. In addition to the ubiquity of our products, there’s the fact that this country is increasingly seen as an unstable and unreliable partner. Four years of Trump is evidence of that, but Bush’s launch of the Iraq War also provoked intense skepticism about American stability.

Many governments and opposition politicians around the world use Facebook for official communications. Will that continue? Or, will the EU and nations in other regions follow the path of Russia and China and establish their own version of the American social network? If foreign software is dangerous, the path seems obvious.  

Also, it’s certain that those who have argued for a non-American alternative to things like Oracle-based servers will be more than emboldened by the US action. Thanks to Trump, their arguments are now validated and the necessary investment in alternatives now justified. Whether his bid wins or lose, Oracle’s CEO, a Trump backer, should be worried. And so should all of the company’s employees.

And, employing an easy extension of the Trump-Zuckerberg “thinking,” what about American-managed consulting companies that often undertake confidential work for governments around the world? It’s “look out” time for McKinsey, Accenture, and others.

The risk from Tik Tok as a foreign app on cell phones is by any matter of logic minor and manageable. But choosing to follow the Trump-Zuckerberg path of turning a software molehill into a national security mountain will have very serious consequences for the American economy. Change won’t happen instantly, but within a decade sharply narrowed markets could cost the US economy hundreds of billions of dollars of export income and on the order of a million jobs. It will be a tough blow for ordinary Americans who will pay more in income taxes to replace lost corporate income.

 It’s the price we’ll pay for leaving decisions to a short-sighted CEO who wants to divert scrutiny from his many privacy missteps and a low-IQ politician who wants to distract the public from his cornucopia of failures.