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Apple, Google and a Deal That Controls the Internet

OAKLAND, Calif. — When Tim Cook and Sundar Pichai, the chief executives of Apple and Google, were photographed eating dinner together in 2017 at an upscale Vietnamese restaurant called Tamarine, the picture set off a tabloid-worthy frenzy about the relationship between the two most powerful companies in Silicon Valley.

As the two men sipped red wine at a window table inside the restaurant in Palo Alto, their companies were in tense negotiations to renew one of the most lucrative business deals in history: an agreement to feature Google’s search engine as the preselected choice on Apple’s iPhone and other devices. The updated deal was worth billions of dollars to both companies and cemented their status at the top of the tech industry’s pecking order.

Now, the partnership is in jeopardy. Last Tuesday, the Justice Department filed a landmark lawsuit against Google — the U.S. government’s biggest antitrust case in two decades — and homed in on the alliance as a prime example of what prosecutors say are the company’s illegal tactics to protect its monopoly and choke off competition in web search.

The scrutiny of the pact, which was first inked 15 years ago and has rarely been discussed by either company, has highlighted the special relationship between Silicon Valley’s two most valuable companies — an unlikely union of rivals that regulators say is unfairly preventing smaller companies from flourishing.

“We have this sort of strange term in Silicon Valley: co-opetition,” said Bruce Sewell, Apple’s general counsel from 2009 to 2017. “You have brutal competition, but at the same time, you have necessary cooperation.”

Apple and Google are joined at the hip even though Mr. Cook has said internet advertising, Google’s bread and butter, engages in “surveillance” of consumers and even though Steve Jobs, Apple’s co-founder, once promised “thermonuclear war” on his Silicon Valley neighbor when he learned it was working on a rival to the iPhone.

Apple and Google’s parent company, Alphabet, worth more than $3 trillion combined, do compete on plenty of fronts, like smartphones, digital maps and laptops. But they also know how to make nice when it suits their interests. And few deals have been nicer to both sides of the table than the iPhone search deal.

Nearly half of Google’s search traffic now comes from Apple devices, according to the Justice Department, and the prospect of losing the Apple deal has been described as a “code red” scenario inside the company. When iPhone users search on Google, they see the search ads that drive Google’s business. They can also find their way to other Google products, like YouTube.

A former Google executive, who asked not to be identified because he was not permitted to talk about the deal, said the prospect of losing Apple’s traffic was “terrifying” to the company.

The Justice Department, which is asking for a court injunction preventing Google from entering into deals like the one it made with Apple, argues that the arrangement has unfairly helped make Google, which handles 92 percent of the world’s internet searches, the center of consumers’ online lives.

Online businesses like Yelp and Expedia, as well as companies ranging from noodle shops to news organizations, often complain that Google’s search domination enables it to charge advertising fees when people simply look up their names, as well as to steer consumers toward its own products, like Google Maps. Microsoft, which had its own antitrust battle two decades ago, has told British regulators that if it were the default option on iPhones and iPads, it would make more advertising money for every search on its rival search engine, Bing.

What’s more, competitors like DuckDuckGo, a small search engine that sells itself as a privacy-focused alternative to Google, could never match Google’s tab with Apple.

Apple now receives an estimated $8 billion to $12 billion in annual payments — up from $1 billion a year in 2014 — in exchange for building Google’s search engine into its products. It is probably the single biggest payment that Google makes to anyone and accounts for 14 to 21 percent of Apple’s annual profits. That’s not money Apple would be eager to walk away from.

In fact, Mr. Cook and Mr. Pichai met again in 2018 to discuss how they could increase revenue from search. After the meeting, a senior Apple employee wrote to a Google counterpart that “our vision is that we work as if we are one company,” according to the Justice Department’s complaint.

A forced breakup could mean the loss of easy money to Apple. But it would be a more significant threat to Google, which would have no obvious way to replace the lost traffic. It could also push Apple to acquire or build its own search engine. Within Google, people believe that Apple is one of the few companies in the world that could offer a formidable alternative, according to one former executive. Google has also worried that without the agreement, Apple could make it more difficult for iPhone users to get to the Google search engine.

A spokesman for Apple declined to comment on the partnership, while a Google spokesman pointed to a blog post in which the company defended the relationship.

Even though its bill with Apple keeps going up, Google has said again and again that it dominates internet search because consumers prefer it, not because it is buying customers. The company argues that the Justice Department is painting an incomplete picture; its partnership with Apple, it says, is no different than Coca-Cola paying a supermarket for prominent shelf space.

Other search engines like Microsoft’s Bing also have revenue-sharing agreements with Apple to appear as secondary search options on iPhones, Google says in its defense. It adds that Apple allows people to change their default search engine from Google — though few probably do because people typically don’t tinker with such settings and many prefer Google anyway.

Apple has rarely, if ever, publicly acknowledged its deal with Google, and according to Bernstein Research, has mentioned its so-called licensing revenue in an earnings call for the first time this year.

According to a former senior executive who spoke on the condition of anonymity because of confidentiality contracts, Apple’s leaders have made the same calculation about Google as much of the general public: The utility of its search engine is worth the cost of its invasive practices.

“Their search engine is the best,” Mr. Cook said when asked by Axios in late 2018 why he partnered with a company he also implicitly criticized. He added that Apple had also created ways to blunt Google’s collection of data, such as a private-browsing mode on Apple’s internet browser.

The deal is not limited to searches in Apple’s Safari browser; it extends to virtually all searches done on Apple devices, including with Apple’s virtual assistant, Siri, and on Google’s iPhone app and Chrome browser.

The relationship between the companies has swung from friendly to contentious to today’s “co-opetition.” In the early years of Google, the company’s co-founders, Larry Page and Sergey Brin, saw Mr. Jobs as a mentor, and they would take long walks with him to discuss the future of technology.

In 2005, Apple and Google inked what at the time seemed like a modest deal: Google would be the default search engine on Apple’s Safari browser on Mac computers.

Quickly, Mr. Cook, then still a deputy to Mr. Jobs, saw the arrangement’s lucrative potential, according to another former senior Apple executive who asked not to be named. Google’s payments were pure profit, and all Apple had to do was feature a search engine its users already wanted.

Apple expanded the deal for its big upcoming product: the iPhone. When Mr. Jobs unveiled the iPhone in 2007, he invited Eric Schmidt, Google’s then chief executive, to join him onstage for the first of Apple’s many famous iPhone events.

“If we just sort of merged the two companies, we could just call them AppleGoo,” joked Mr. Schmidt, who was also on Apple’s board of directors. With Google search on the iPhone, he added, “you can actually merge without merging.”

Then the relationship soured. Google had quietly been developing a competitor to the iPhone: smartphone software called Android that any phone maker could use. Mr. Jobs was furious. In 2010, Apple sued a phone maker that used Android. “I’m going to destroy Android,” Mr. Jobs told his biographer, Walter Isaacson. “I will spend my last dying breath if I need to.”

A year later, Apple introduced Siri. Instead of Google underpinning the virtual assistant, it was Microsoft’s Bing.

Yet the companies’ partnership on iPhones continued — too lucrative for either side to blow it up. Apple had arranged the deal to require periodic renegotiations, according to a former senior executive, and each time, it extracted more money from Google.

“You have to be able to maintain those relationships and not burn a bridge,” said Mr. Sewell, Apple’s former general counsel, who declined to discuss specifics of the deal. “At the same time, when you’re negotiating on behalf of your company and you’re trying to get the best deal, then, you know, the gloves come off.”

Around 2017, the deal was up for renewal. Google was facing a squeeze, with clicks on its mobile ads not growing fast enough. Apple was not satisfied with Bing’s performance for Siri. And Mr. Cook had just announced that Apple aimed to double its services revenue to $50 billion by 2020, an ambitious goal that would be possible only with Google’s payments.

By the fall of 2017, Apple announced that Google was now helping Siri answer questions, and Google disclosed that its payments for search traffic had jumped. The company offered an anodyne explanation to part of the reason it was suddenly paying some unnamed company hundreds of millions of dollars more: “changes in partner agreements.”

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Week in Review: Snapchat strikes back

Hello hello, and welcome back to Week in Review. Last week, I wrote about the possibility of a pending social media detente, this week I’m talking about a rising threat to Facebook’s biz.

If you’re reading this on the TechCrunch site, you can get this in your inbox here, and follow my tweets here. And while I have you, my colleague Megan Rose Dickey officially launched her new TechCrunch newsletter, Human Capital! It covers labor and diversity and inclusion in tech, go subscribe!


Image: TechCrunch

First off, let me tell you how hard it was to resist writing about Quibi this week, but those takes came in very hot the second that news dropped, and I wrote a little bit about it here already. All I will say, is that while Quibi had its own unique mobile problems, unless Apple changes course or dumps a ton of money buying up content to fill its back library, I think TV+ is next on the chopping block.

This week, I’m digging into another once-maligned startup, though this one has activated quite the turnaround in the last two years. Snap, maker of Snapchat, delivered a killer earnings report this week and as a result, investors deemed to send the stock price soaring. Its market cap has nearly doubled since the start of September and it’s clear that Wall Street actually believes that Snap could meaningfully increase its footprint and challenge Facebook.

The company ended the week with a market cap just short of $65 billion, still a far cry from Facebook $811 billion, but looking quite a bit better than it was in early 2019 when it was worth about one-tenth of what it is today. All of a sudden, Snap has a new challenge, living up to high expectations.

The company shared that in Q3, it delivered $679 million in reported revenue, representing 52% year-over-year growth. The company currently has 249 million daily active users, up 4% over last quarter.

Facebook will report its Q3 earnings next week, but they’re still in a different ballpark for the time being, even if their market cap is just around 12 times Snap’s, their quarterly revenue from Q2 was about 28 times higher than what Snap just reported. Meanwhile, Facebook has 1.79 billion daily actives, just about 7 times Snapchat’s numbers.

Snap has spent an awful lot of time proving the worth of features they’ve been pushing for years, but the company’s next challenge might be diversifying their future. The company has been flirting with augmented reality for years, waiting patiently for the right moment to expand its scope, but Snap hasn’t had the luxury of diverting resources away from efforts that don’t send users back to its core product. Some of its biggest launches of 2020 have been embeddable mini apps for things like ordering movie tickets or bite-sized social games that bring even more social opportunities into chat.

Snap’s laser focus here has obviously been a big part of its recovery, but as expectations grow, so will demands that the company moves more boldly into extending its empire. I don’t think Snapchat needs to buy Trader Joe’s or its own ISP quite yet, but working towards finding its next platform will prevent the service from settling for Twitter-sized ambitions and give them a chance at finding a more expansive future.


Image Credits: Bryce Durbin

Trends of the Week

These next few weeks are guaranteed to be dominated by U.S. election news, so enjoy the diversity of news happenings out there while it lasts…

Quibi is dead
Few companies that have raised so much money have appeared quite dead-on-arrival as Jeffrey Katzenberg’s mobile video startup Quibi. This week, the company made the decision to shut down operations and call it quits. More here.

Pakistan unbans TikTok
It appears that the cascading threat of country-by-country TikTok bans has stopped for now. This week, TikTok was unblocked in Pakistan with the government warning the company that it needed to actively monitor content or it would face a permanent ban. Read more here.

Facebook Dating arrives in Europe
Facebook Dating hasn’t done much to unseat Tinder stateside, but the service didn’t even get the chance to test its luck in Europe due to some regulatory issues relating to its privacy practices. Now, it seems Facebook has landed in the tentative good graces of regulatory bodies and has gotten the go ahead to launch the service in a number of European countries. Read more here.

Until next week,

Lucas M.

Read More

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It’s a Ballot Fight for Survival for Gig Companies Like Uber

OAKLAND, Calif. — By late August, the urgency was becoming clear. Top executives of Uber, Lyft and the delivery service DoorDash met to discuss a California ballot measure that would exempt them from a new state labor law and save their companies hundreds of millions of dollars.

The survival of their businesses was on the ballot.

Days later, political strategists responded to the executives’ concerns by telling the companies, which had already pledged $90 million to back the measure, that they needed to spend a lot more if they wanted to win, said three people familiar with the discussions, who were not allowed to talk about them publicly.

The fight over the ballot measure, Proposition 22, has become the most expensive in the state’s history since then, with its backers contributing nearly $200 million and 10 days still to go until the Nov. 3 election. Along the way, the companies have repeatedly been accused of heavy-handed tactics; a lawsuit filed on Thursday claims Uber is coercing the support of its drivers.

Despite the big spending and a barrage of television advertising, only 39 percent of likely voters said they supported Uber and Lyft in a poll last month by the University of California, Berkeley, while 36 percent opposed their proposal and others were undecided. People close to the campaign said they would want to see close to 60 percent approval in polling before they could breathe a sigh of relief.

The ballot measure, which is also being backed by Instacart and a delivery company that Uber is acquiring, Postmates, could be a harbinger for gig companies in the rest of the country.

Prop 22 would exempt the companies from complying with a law that went into effect at the beginning of the year, while offering limited benefits to drivers. The law is intended to force them to treat gig workers as employees, but Uber and its peers have resisted, fearing that the cost of benefits like unemployment insurance and health care could tip them into a downward financial spiral.

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Credit…Tag Christof for The New York Times

Though Uber and Lyft, for example, are publicly traded companies with a combined worth of $70.5 billion, they have never been profitable. They lose billions of dollars each year, and the pandemic has made turning a profit even more difficult. DoorDash, which has filed to go public, has also struggled. Analysts estimate that complying with California’s gig-worker law could cost Uber, which lost $1.8 billion in its most recent quarter, as much as $500 million a year.

Uber said it planned to cut off work for the approximately 158,000 California drivers who were active on the platform each quarter if its ballot measure failed. It would employ roughly 51,000 remaining drivers, it said, and raise fares to meet the higher business costs.

The ballot fight gained additional urgency Thursday evening when the California First District Court of Appeal ruled that Uber and Lyft must treat their California drivers as employees under the new labor law. The state attorney general and the city attorneys of San Francisco, Los Angeles and San Diego had sued the companies in May to enforce the law.

“If Prop 22 does not win, we will do our best to adjust,” said Dara Khosrowshahi, Uber’s chief executive, in a Wall Street Journal interview this week. “Where in California we can operate is a question mark, and the size and scale of the business will be substantially reduced.”

In past dust-ups with local regulators, Uber rallied its passengers for support. The pandemic has made that difficult, so it has urged its tech employees to get involved and used its app to reach out to drivers for support.

The Yes on 22 campaign also started an effort to organize drivers, a move copied from the labor groups that have long tried to organize drivers to fight for better working conditions. And it has forged relationships with high-profile advocacy groups, like Mothers Against Drunk Driving and the California chapter of the N.A.A.C.P.

“Drivers want independence plus benefits by a four-to-one margin, and we’re going to fight for them,” said Julie Wood, a spokeswoman for Lyft. “We believe California voters are on the side of drivers, too.”

A spokesman for DoorDash, Taylor Bennett, said, “Our support for Prop 22 is part of our commitment to protecting the economic opportunity that tens of thousands of Californians value and the access to delivery that so many restaurants rely on, especially at such a critical time.”

A spokeswoman for Instacart declined to comment. Postmates did not respond to a request for comment.

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In an effort to gain support, the companies have bombarded riders and drivers with push notifications, campaign ads that appear in their apps and emails promoting Prop 22. Before logging on to start work, Uber drivers have been presented with a slide show of warnings about how their lives could change if the proposition fails.

“A no vote would mean far fewer jobs,” one of the slides on the Uber app warned. “That’s why we’re fighting so hard to win.”

In the lawsuit filed against Uber on Thursday, drivers claim that the messages violated a state law that forbids employers to coerce their employees to participate in political activity.

“I can’t rule out that employers have engaged in coercive tactics like this in the past, but I have never heard of an employer engaging in this sort of barrage of coercive communications on such a broad level, ever,” said one of the attorneys for the drivers, David Lowe, a partner at Rudy, Exelrod, Zieff & Lowe. “It is such an extraordinary thing, from my perspective, for Uber to exploit this captive audience of workers.” Mr. Lowe said he opposed Prop 22.

Matt Kallman, an Uber spokesman, said, “This is an absurd lawsuit, without merit, filed solely for press attention and without regard for the facts.” He added, “It can’t distract from the truth: that the vast majority of drivers support Prop 22.”

In early October, the Prop 22 campaign was denounced by Senator Bernie Sanders after a fake progressive group calling itself Feel the Bern endorsed the proposition in a campaign flier that implied Uber had the backing of progressive leaders. The mailers were, in fact, sent by a firm that creates political mailers representing different views.

“The Prop 22 campaign is working hard to reach voters across the state and the political spectrum to ensure they know that drivers overwhelmingly support Prop 22,” said Geoff Vetter, a spokesman for the Yes on 22 campaign, which is funded by Uber, Lyft, DoorDash and other gig economy companies.

Questions have also been raised about the N.A.A.C.P. endorsement. A political consulting firm run by Alice Huffman, the leader of the California N.A.A.C.P., has received $85,000 from the gig companies’ campaign, public records show. The payment was reported earlier by the news site CalMatters.

Mr. Vetter said the payments were for “outreach.” The N.A.A.C.P. did not respond to a request for comment.

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Credit…Jim Wilson/The New York Times

Uber held an all-hands meeting this month for employees to meet drivers who support the proposition, and sent several emails encouraging staff to lobby friends and family.

Although the internal messages were upbeat, the policy staff raised concerns with campaign consultants during the meetings in late August and early September, the people familiar with those meetings said. Among their worries: that the ballot language was unfavorable to the companies, and that people were voting earlier than usual because of the pandemic, meaning advertising would need to be rapid and aggressive.

“We look at the data every day, and our metrics show a tight race,” Justin Kintz, Uber’s head of public policy, said in an early October email to Uber employees, obtained by The New York Times. “At the same time, with continued strong execution against our plan, we’re confident we can win.”

While the email noted that campaigning was optional, Mr. Kintz encouraged employees to participate in texting banks to contact voters and to promote the campaign in conversations with friends.

“The big reason that you’re seeing so much spending is because of the high stakes in this election,” said Mr. Vetter, the spokesman for the campaign. “Hundreds of thousands of jobs are on the line. These are services that millions of Californians rely on.”

The opposition campaign, which is funded by labor unions, has raised about $15 million. Supporters of the No on 22 campaign have argued that voters should reject the push by tech companies, and that the measure would harm workers already at a disadvantage during the pandemic.

“Proposition 22 will make racial inequality worse in California at the worst possible time,” said Representative Barbara Lee, a California Democrat. “You have very clearly crossed the line when you try to claim the equity mantle for a campaign that has always been about allowing multibillion-dollar app companies to write their own law so that they can keep exploiting the labor of drivers, eight in 10 of whom are people of color.”

No matter the outcome of the vote, the gig companies and their opponents are likely to take their campaigns to Washington. Massachusetts has filed a lawsuit similar to the one that the California court decided on Thursday evening, and Uber hopes to avoid continued state-by-state battles by pressing for federal legislation.

Erin Griffith and Noam Scheiber contributed reporting.

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It’s Google’s World. We Just Live In It.

About 20 years ago, I typed Google.com into my web browser for the first time. It loaded a search bar and buttons. I punched in “D.M.V. sample test,” scrolled through the results and clicked on a site.

Wow, I thought to myself. Google’s minimalist design was a refreshing alternative to other search engines at the time — remember AltaVista, Yahoo! and Lycos? — which greeted us with a jumble of ads and links to news articles. Even better, Google seemed to show more up-to-date, relevant results.

And the entire experience took just a few seconds. Once I found the link I needed, I was done with Google.

Two decades later, my experience with Google is considerably different. When I do a Google search in 2020, I spend far more time in the internet company’s universe. If I look for chocolate chips, for example, I see Google ads for chocolate chips pop up at the top of my screen, followed by recipes that Google has scraped from across the web, followed by Google Maps and Google Reviews of nearby bakeries, followed by YouTube videos for how to bake chocolate chip cookies. (YouTube, of course, is owned by Google.)

It isn’t just that I am spending more time in a Google search, either. The Silicon Valley company has leveraged the act of looking for something online into such a vast technology empire over the years that it has crept into my home, my work, my devices and much more. It has become the tech brand that dominates my life — and probably yours, too.

On my Apple iPhone, I use Google’s apps for photo albums and maps, along with tools for calendar, email and documents. On my computer and tablet, the various web browsers I use feature Google as the default search bar. For work, I use Google Finance (to look up stock quotes), Google Drive (to store files), Google Meet (to teleconference) and Google Hangouts (to communicate).

In my home, Google is also everywhere. My Nest home security camera is made by Google. A Google voice service rings my door buzzer. To learn how to repair a gutter, I recently watched home improvement videos on YouTube. In online maps, Google has photos of my house taken from outer space and camera-embedded cars.

By my unofficial estimate, I spend at least seven hours a day on Google-related products.

Google’s prevalence has brought the company to a critical point. On Tuesday, the Justice Department sued it for anticompetitive practices, in the most significant antitrust action by the U.S. government against a technology company in decades. The government’s case focused on Google’s search and how it appeared to create a monopoly through exclusive business contracts and agreements that locked out rivals.

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Google said in a tweet that the lawsuit was “deeply flawed.” The company added, “People use Google because they choose to, not because they’re forced to or because they can’t find alternatives.”

To Gabriel Weinberg, the chief executive of DuckDuckGo, which offers a privacy-focused search engine, what I have experienced was Google’s plan all along.

“I don’t think it was happenstance,” he said. “They’ve been using their different products to maintain their dominance in their core market, which is search.”

That has created a privacy cost for many of us, Mr. Weinberg said. Google, he said, collects reams of information about us across its products, allowing it to stitch together detailed profiles about our behavior and interests.

So in 2012, Mr. Weinberg broke up with Google and purged his accounts. “I got to understand the privacy implications of building massive profiles on people — and the massive harm,” he said.

But Jeff Jarvis, a professor at the Craig Newmark Graduate School of Journalism and the author of “What Would Google Do?,” a book about the search giant’s rise, said there was still plenty of room outside Google’s world. For one, we don’t use Google for social media — we’re on Facebook and TikTok. Artificial intelligence, even the type that Google is developing, is still pretty unintelligent, he added.

“The internet is still very, very young,” Mr. Jarvis said.

To test that argument, I decided to catalog Google’s presence in our lives. Here are some results.

When we browse the web, we are probably interacting with Google without even realizing it. That’s because most websites that we visit contain Google’s ad technologies, which track our browsing. When we load a web article containing an ad served by Google, the company keeps a record of the website that loaded the ad — even if we didn’t click on the ad.

And guess what. Most ads we see are served by Google. Last year, the company and Facebook accounted for 59 percent of digital ad spending, according to the research firm eMarketer. Google dominates 63 percent of that slice of the pie.

Google’s ad technologies also include invisible analytics code, which runs in the background of many websites. About 74 percent of the sites we visit run Google analytics, according to an analysis by DuckDuckGo. So that’s even more data we are feeding about ourselves to Google, often without knowing it.

Let’s start with Android, the most popular mobile operating system in the world. People with Android devices inevitably download apps from Google’s Play store.

Android includes Google’s staple apps for maps and email, and Google search is prominently featured for looking up articles and digging through device settings. Google’s voice-powered virtual assistant is also part of Android devices.

Even if you own an Apple iPhone, as I do, Google looms large.

Google has been the default search bar on the iPhone’s Safari browser since 2007. Gmail is the most popular email service in the world, with more than 1.5 billion users, so chances are you use it on your iPhone. And good luck finding a service other than YouTube for watching those cooking and music videos on your phone.

In fact, Google owns 10 of the 100 most-downloaded apps in the Google and Apple app stores, according to App Annie, a mobile analytics firm.

Outside smartphones, Google is the dominant force on our personal computers. By some estimates, more than 65 percent of us use Google’s Chrome web browser. And in education, our schools have chosen the Chromebook, low-cost PCs that run Google’s operating system, as the most widely used tech tool for students.

This can be brief: YouTube is by far the largest video-hosting platform. Period. About 215 million Americans watch YouTube, spending 27 minutes a day on the site, on average. That’s up from 22 minutes a few years ago, according to eMarketer.

Another way you might watch Google videos is through YouTube TV, a streaming service that offers a modest bundle of TV channels. Released in 2017, YouTube TV had more than two million users last year, according to Google. That’s not far behind Sling TV, a similar bundle service introduced by Dish in 2015, which had about 2.6 million subscribers last year.

If you recently bought an internet-connected gadget for your home, chances are that Google is behind it. After all, the company offers Google Home, one of the most popular smart speakers and powered by Google’s virtual assistant, and it owns Nest, the smart-home brand that makes internet-connected security cameras, smoke alarms and thermostats.

We often interact with Google even when we use an app that lacks a clear connection with it. That’s because Google provides the cloud infrastructure, or the server technology that lets us stream videos and download files, to other brands. If you’re using TikTok in the United States, guess what: You’re in Google’s cloud. (TikTok may soon switch cloud providers under a deal with Oracle.)

Even Mr. Weinberg, who quit Google, said he had been unable to shake its services entirely. He said he still watched the occasional Google-hosted video when there was no alternative.

“If somebody’s sending a video that I need to watch and it’s only on YouTube, then that’s just the reality,” he said.

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Apple Does Not Need to Return Fortnite to App Store, Judge Rules

SAN FRANCISCO — A federal judge ruled on Friday that Apple did not need to reinstate the popular video game Fortnite in its App Store, in a blow to Fortnite’s parent company, Epic Games, which is locked in an antitrust battle with the tech giant over its app store fees and rules.

Judge Yvonne Gonzalez Rogers of the Northern District of California said in her ruling that Apple’s ban of the game could continue because Epic had violated its contract with Apple. There is “significant public interest” in requiring companies to adhere to contracts or resolve disputes through the normal course, she wrote.

But Judge Gonzales Rogers also said that Apple could not ban Unreal Engine, Epic’s developer tools, from its platforms because of the “potential significant damage to both developers and gamers” who rely on the software.

The mixed ruling showed the high cost of taking on a tech behemoth like Apple, even for an established company like Epic. The 116 million people who have accessed Fortnite through Apple’s systems will continue to be kept away while Epic and Apple prepare for a trial in the case, which is scheduled for May.

An Epic spokeswoman said the company “is grateful that Apple will continue to be barred from retaliating against Unreal Engine and our game development customers.” Epic will continue developing for Apple’s platforms and “pursue all avenues to end Apple’s anti-competitive behavior,” she said.

An Apple spokesman said the company was grateful that the court “recognized that Epic’s actions were not in the best interests of its own customers and that any problems they may have encountered were of their own making when they breached their agreement.” The spokesman added that Apple’s app store has been “an economic miracle” that has created “transformative business opportunities” for developers.

Epic’s battle with Apple comes as the largest tech companies face scrutiny of their power. On Tuesday, House lawmakers said Apple, Amazon, Facebook and Google had exercised and abused their monopoly power to stifle competition and harm consumers and recommended that the companies be restructured. European regulators have also opened an investigation into whether Apple’s app store rules are anticompetitive. And in the coming days, the Justice Department is expected to sue Google over anticompetitive search practices.

At the heart of Epic’s case is Apple’s and Google’s tight grip over smartphone apps in their app stores. Both companies require that developers use their payment systems and pay a 30 percent cut of any money they make in their apps.

“They think they can just decide arbitrarily what apps can exist, and what fees can be charged, and tax all commerce,” Tim Sweeney, Epic’s chief executive, said in an interview last month. “We came gradually to the realization that we had to fight this, not just by words, but also by really broad actions.”

Epic has said it wants Apple to change its requirements that apps use its payment system and shell out a 30 percent fee. It also wants to operate its own app store within Apple’s.

The companies began fighting in August, when Epic violated Apple’s and Google’s rules by directing Fortnite users to its own payments service. Apple and Google responded by pulling Fortnite from their app stores. Epic then sued both companies, arguing they were breaking antitrust laws.

Apple later also cut off its support for Unreal Engine, Epic’s software development tool that is used by thousands of game makers. Judge Gonzalez Rogers said on Friday that Apple must continue supporting Unreal Engine and could not retaliate against any of Epic’s other affiliated apps or products.

The fight has escalated over the past few weeks. Apple has accused Epic of seeking a special deal for itself, while Epic has accused Apple of cherry-picking out-of-context emails in its legal response.

Other companies have used the battle to criticize Apple. Microsoft filed a declaration in support of Epic and has announced a set of developer-friendly principles for its own app store. Facebook has also recently called out Apple’s 30 percent app fees.

Smaller app makers, normally wary of angering the tech giants, have found strength in numbers. In September, more than a dozen of them, including the music streaming service Spotify, the dating service Match Group and the Bluetooth tracking device maker Tile, formed a nonprofit group called Coalition for App Fairness to push for changes to the app stores.

In a hearing last month, Apple said it was willing to reinstate Fortnite to its app store before a trial if Epic would return to complying with its rules. Judge Gonzalez Rogers proposed an arrangement that would put Apple’s fees from Fortnite in an escrow account until after the trial. But Epic refused, arguing that doing so would be complying with a contract it views as unlawful.

“I didn’t buy that argument before,” Judge Gonzalez Rogers said in the hearing. “I’m not particularly impressed with it now.”

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Apple and Epic Games Spar Over Returning Fortnite to the App Store

SAN FRANCISCO — Apple and Epic Games, the maker of Fortnite, sparred in federal court on Monday over whether to reinstate the popular game in Apple’s App Store, raising antitrust arguments that may reshape a key part of the internet economy and the way people use smartphones.

In a three-hour videoconference hearing in the Northern District of California, Epic laid out its allegations that Apple had abused its power. Their fight began last month when Epic tried collecting its own payments for Fortnite without going through the App Store, breaking Apple’s rules. Apple then booted Fortnite from the App Store; Epic responded by suing Apple, accusing it of violating antitrust laws.

On Monday, Epic said Apple’s unwillingness to let it use its own payment system was anticompetitive and monopolistic. Apple countered that Epic had created a “self-inflicted wound” by not complying with its payment policy. Apple also said Epic had plenty of alternative ways to distribute its games.

Judge Yvonne Gonzalez Rogers concluded the hearing by recommending a jury trial in the case in July. In the coming days, she is expected to rule on whether Apple must allow Fortnite back into its App Store and support Unreal Engine, Epic’s software development tools, in the interim.

The battle is playing out as scrutiny of the power of the tech giants ramps up. Lawmakers, regulators, academics and activists are increasingly taking issue with the reach of Apple, Amazon, Facebook and Google in people’s lives. For months, the Department of Justice, the Federal Trade Commission, state attorneys general and House lawmakers have investigated the clout of the companies and whether they stifle competition and harm consumers.

Those inquiries are set to come to a head soon. The Justice Department is poised to sue Google on claims of anticompetitive search practices, while Congress is expected to release a report of a yearlong antitrust investigation into the big technology platforms.

Much of the scrutiny of Apple has centered on the power it holds over developers in its App Store. Apple and Google control access to apps on virtually all of the world’s smartphones through their iOS and Android operating systems. The companies charge a 30 percent fee for purchases made inside apps in their app stores. And they make their own apps that compete with those of independent developers.

Apple has long said that all app developers are subject to the same rules, and that its commission is fair. But Epic has said Apple’s power creates an unlevel playing field and is unfair. Apple’s 30 percent cut of fees, for instance, is too high a tax on commerce, the games maker has said. It is seeking the option to use its own payment method and publish its own app store within Apple’s and Google’s systems.

Last week, Epic joined with Spotify, Match Group and other independent developers to form a nonprofit coalition to push for changes in the app stores and to “protect the app economy.”

But by taking on Apple so directly and publicly, Epic — a 29-year-old privately held company worth $17.3 billion and based in Cary, N.C. — may be in for the fight of its life. Apple has a market capitalization of nearly $2 trillion and almost unlimited resources. Last month, it cut off its support for Epic’s Unreal Engine, a software development tool that thousands of developers use. That took the smaller company by surprise.

“We recognized the theoretical possibility in advance, but thought it would be so foolish of” Apple to cut off Unreal Engine, Tim Sweeney, Epic’s founder and chief executive, said in an interview last week.

In court on Monday, Judge Gonzalez Rogers sharply criticized Epic’s decision last month to break with Apple’s payment rules. “There are plenty of people in the public who consider you guys heroes for what you did, but it’s still not honest,” she said.

Epic argued that Fortnite’s removal from the App Store had caused it irreparable harm. But Judge Gonzales Rogers noted that Epic’s publicity campaign around the fight, including a parody video of Apple’s famous “1984” ad and a hashtag, #FreeFortnite, had probably increased good will toward the company.

Epic’s attorney, Katherine B. Forrest, a partner at Cravath, Swaine & Moore, defended the publicity campaign.

“When you are taking on the biggest company in the world and you know it’s going to retaliate, you don’t lie down in the street and die,” she said. “You plan very carefully.”

Apple said it would reinstate Fortnite to its App Store only if Epic complied with its rules.

“They don’t need this court’s emergency help — they have the keys to free Fortnite right there in their pocket,” said Apple’s attorney, Theodore J. Boutrous Jr., a partner at Gibson Dunn.

Apple also repeated a longstanding argument that it maintains tight control over its App Store to keep customers’ data secure and private.

Judge Gonzalez Rogers encouraged both companies to consider a jury trial. “It is important enough to understand what real people think,” she said. “Do these security issues concern people or not?”

The battle over the power of app stores has sharpened recently. Even Facebook, which is also under antitrust scrutiny, has piled on. On Friday, the social media giant said Apple had temporarily waived its 30 percent fee on apps that provide virtual events for three months. Facebook lamented that starting next year, it would have to “yet again pay Apple the full 30 percent App Store tax.”

On Monday, Google also said it would no longer allow companies to circumvent its app store fees, as companies like Spotify and Netflix have done in recent years.

In the interview last week, Mr. Sweeney said Epic was “all in” on the fight against Apple. “We’re staking our business on a battle in which we feel is right,” he said.

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Google Demands Its 30% Cut From App Developers in Play Store

OAKLAND, Calif. — Google said it would no longer allow some apps to circumvent its payment system within the Google Play store that provides the company a cut of in-app purchases.

Google said in a blog post on Monday that it was providing “clarity” on billing policies because there was confusion among some developers about what types of transactions require use of its app store’s billing system.

Google has had a policy of taking a 30 percent cut of payments made within apps offered by the Google Play store, but some developers including Netflix and Spotify have bypassed the requirement by prompting users for a credit card to pay them directly. Google said companies had until Sept. 30, 2021, to integrate its billing systems.

The fees collected by Google and Apple’s app stores has become an especially contentious issue in recent months after Epic Games, maker of the popular game Fortnite, sued Apple and Google, claiming they violated antitrust rules with the commissions they charge.

Developers have bristled at the 30 percent cut demanded by Google and Apple, saying it is an inflated digital tax that hobbles their ability to compete. And because the two companies control almost all of the world’s smartphones, many developers gripe that they have no option but to adhere to their policies and pay the commissions.

Google has argued that it allows other companies to operate app stores within its Android software. On Monday, the company said it would make changes in next year’s version of Android to make it easier to use other app stores on its devices without compromising safety.

This is a developing story. It will be updated.

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To Fight Apple and Google, Smaller App Rivals Organize a Coalition

SAN FRANCISCO — For months, complaints from tech companies against Apple’s and Google’s power have grown louder.

Spotify, the music streaming app, criticized Apple for the rules it imposed in the App Store. A founder of the software company Basecamp attacked Apple’s “highway robbery rates” on apps. And last month, Epic Games, maker of the popular game Fortnite, sued Apple and Google, claiming they violated antitrust rules.

Now these app makers are uniting in an unusual show of opposition against Apple and Google and the power they have over their app stores. On Thursday, the smaller companies said they had formed the Coalition for App Fairness, a nonprofit group that plans to push for changes in the app stores and “protect the app economy.” The 13 initial members include Spotify, Basecamp, Epic and Match Group, which has apps like Tinder and Hinge.

“They’ve collectively decided, ‘We’re not alone in this, and maybe what we should do is advocate on behalf of everybody,’” said Sarah Maxwell, a spokeswoman for the group. She added that the new nonprofit would be “a voice for many.”

Scrutiny of the largest tech companies has reached a new intensity. The Department of Justice is expected to file an antitrust case against Google as soon as next week, focused on the company’s dominance in internet search. In July, Congress grilled the chief executives of Google, Apple, Amazon and Facebook about their practices in a high-profile antitrust hearing. And in Europe, regulators have opened a formal antitrust investigation into Apple’s App Store tactics and are preparing to bring antitrust charges against Amazon for abusing its dominance in internet commerce.

For years, smaller rivals were loath to speak up against the mammoth companies for fear of retaliation. But the growing backlash has emboldened them to take action.

Spotify and others have become more vocal. And on Monday, Epic and Apple are set to meet in a virtual courtroom in the Northern District of California to present their cases for whether Fortnite should stay on the App Store, before a trial over the antitrust complaint next year.

At the heart of the new alliance’s effort is opposition to Apple’s and Google’s tight grip on their app stores and the fortunes of the apps in them. The two companies control virtually all of the world’s smartphones through their software and the distribution of apps via their stores. Both also charge a 30 percent fee for payments made inside apps in their systems.

App makers have increasingly taken issue with the payment rules, arguing that a 30 percent fee is a tax that hobbles their ability to compete. In some cases, they have said, they are competing with Apple’s and Google’s own apps and their unfair advantages.

Apple has argued that its fee is standard across online marketplaces.

On Thursday, the coalition published a list of 10 principles, outlined on its website, for what it said were fairer app practices. They include a more transparent process for getting apps approved and the right to communicate directly with their users. The top principle states that developers should not be forced to exclusively use the payments systems of the app store publishers.

Each of the alliance’s members has agreed to contribute an undisclosed membership fee to the effort.

“Apple leverages its platform to give its own services an unfair advantage over competitors,” said Kirsten Daru, vice president and general counsel of Tile, a start-up that makes Bluetooth tracking devices and is part of the new nonprofit. “That’s bad for consumers, competition and innovation.”

Ms. Daru testified to lawmakers this year that Apple had begun making the permissions around Tile’s app more difficult for people to use after it developed a competing feature.

Apple did not immediately have a comment on the coalition; Google didn’t respond to a request for comment.

The coalition came together in recent months after discussions among executives at Tile, Epic, Spotify and Match Group, the four companies that have been most vocal in their opposition to the big tech companies, Ms. Maxwell said.

Some of the conversations took place after Apple and Google booted Fortnite from their app stores last month for violating their payment rules. As Epic’s fight with Apple and Google escalated, Spotify and Match Group spoke out in support of the video game company.

Apple has argued that Epic’s situation “is entirely of Epic’s own making.”

The new coalition could spur more companies to publicly voice longstanding complaints, its members said. Peter Smith, chief executive of Blockchain.com, said his cryptocurrency finance company had joined the group partly because it offered strength in numbers.

“Can they ban us all?” he said. “I doubt it.”

Apple has blocked Blockchain’s apps several times, Mr. Smith said. Some customers were so frustrated by the blockages that they posted videos of themselves destroying iPhones with machetes.

“These app stores have gotten so big that they are effectively deciding what customers get access to,” Mr. Smith said.

Tim Sweeney, Epic’s chief executive, said his company had received “vast, vast amounts of communication” from app developers who supported it after it sued. But many are afraid to speak up publicly, he said.

“Apple and Google have infinite ways of retaliating without it being obvious to the outside world” by slowing down apps, reinterpreting rules in negative ways or saying no to new features, Mr. Sweeney said in an interview this week.

He said Epic had a history of standing up for what it thought was right. “But of course,” he added, “it is very stressful to go through, you know, a fight with two companies that are over 200 times our size.”

Adam Satariano contributed reporting from London.

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‘There’s No There There’: What the TikTok Deal Achieved

SAN FRANCISCO — The saga of TikTok had everything: Ominous threats of surveillance. A forced fire sale. Threats of retaliation. Head-spinning deal terms that morphed by the hour. Dark horse bidders and a looming deadline.

Now, as the dust settles on the weeks of drama over the social media app, investors and others are asking what it was all for.

The answer? A cloud computing contract for the Silicon Valley business software company Oracle, a merchandising deal for Walmart and a claim of victory for President Trump.

In the deal announced on Saturday, which was spurred by Mr. Trump’s national security concerns over TikTok, the social media app said it would separate itself from its Chinese parent company, ByteDance, and become an independent entity called TikTok Global. Oracle would become TikTok’s new cloud provider, while Walmart would offer its “omni-channel retail capabilities,” the companies said.

Oracle and Walmart would own a cumulative 20 percent stake in TikTok Global, which said it planned to hire 25,000 people in the United States over an undisclosed period and go public sometime in the next year. TikTok also promised to pay $5 billion in “new tax dollars to the U.S. Treasury” and create “an educational initiative to develop and deliver an A.I.-driven online video curriculum,” according to a joint announcement from Oracle and Walmart.

President Trump pronounced the agreement a success and blessed it, saying on Saturday that TikTok would “have nothing to do with China, it’ll be totally secure, that’s part of the deal.” And he was partly right: The deal puts more control of TikTok into the hands of Americans, with four of the five members of the new entity’s board being American. Oracle would also oversee the app and could verify the security of TikTok’s code and any updates.

But the agreement does not deliver on Mr. Trump’s original demand of a full sale of TikTok and it does not eliminate China from the mix. Under the initial terms, ByteDance still controls 80 percent of TikTok Global, two people with knowledge of the situation have said, though details may change. ByteDance’s chief executive, Zhang Yiming, will also be on the company’s board of directors, said a third person. And the government did not provide specifics about how the deal would answer its security concerns about TikTok.

Even the $5 billion that Mr. Trump trumpeted was mired in confusion. The education initiative associated with the agreement was lumped together with the $5 billion in “new tax dollars,” even though they are separate. No further details were publicly given on how the money would be provided. ByteDance said in a Sunday statement posted to its news aggregator app that it had been previously unaware of the contribution.

Lawmakers, policy specialists and others said the way that TikTok’s deal got done also deserved more scrutiny. That’s because Mr. Trump first forced TikTok into a corner with an executive order on Aug. 6, in which he threatened to block the app in the United States if it did not satisfy national security concerns. He then approved the deal only after Oracle — which has a cozy relationship with the White House — got involved. At different points, Mr. Trump also said the government deserved a cut of any deal.

“There’s no there there,” said Carl Tobias, a law professor at the University of Richmond who focuses on federal courts and the constitution. “Is this really about trade, or about the political benefit of trying to bash China and show how tough the administration can be?”

The sharpest criticism was reserved for how the deal came about. Mr. Trump invoked the International Emergency Economic Powers Act for his executive orders to block TikTok from the United States. Previous administrations have used the authority cautiously for purposes like sanctioning foreign governments. It was the first time the law has been used against a technology company.

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Credit…Doug Mills/The New York Times

Vetting deals “is normally a process that involves multiple thoughtful people coming to the issue from multiple different concerns,” said Tom Wheeler, a former Democratic chairman of the Federal Communications Commission. “This appears as though what passes for process is what pleases one man: Donald J. Trump.”

Until Saturday, TikTok was among those questioning the legality of Mr. Trump’s executive order. In August, TikTok sued the U.S. government and accused it of a lack of due process in attempting to ban the app. In the lawsuit, TikTok said it “had no choice but to take action.”

TikTok is no longer expected to move forward with the suit. In an upbeat video shared on social media on Saturday, Vanessa Pappas, the app’s interim chief executive, said she was “thrilled” about the deal.

Security experts said the national security threat posed by TikTok and other Chinese tech companies was certainly worthy of examination. Chinese law forces companies to cooperate with the government on national intelligence work, and officials from both parties in the United States said there was a risk that Beijing could access Americans’ sensitive data.

Yet the lack of specifics on how the new TikTok Global would handle national security concerns raised new questions on Sunday. “The premise was national security but where is the national security in this quote-unquote deal?” Professor Tobias said.

TikTok, Oracle and Walmart declined to comment. The White House did not provide a comment.

The Chinese government, which has long cited national security as one reason it heavily censors the internet at home, said on Monday that TikTok did not pose a threat to the United States.

“The United States government has not produced any real evidence that TikTok is a threat to U.S. ‘national security,’” said a statement on the website of the National Supervisory Commission, an agency that roots out corruption and disloyalty among officials. “But this is not an isolated example of the U.S. government using security as an excuse to exercise control over the internet.”

Senator Mark Warner, a Democrat of Virginia who is skeptical of Chinese technology companies, said in a speech on Wednesday that prohibiting certain technologies from the United States must be done “honestly.” But, he added, the “haphazard actions on TikTok fail that test and will only invite retaliation against American companies.”

On Saturday, the Chinese government enacted a new system for blacklisting foreign companies and restricting their business activities in the country. Beijing stopped short of naming any specific enterprises that would be included on the list.

One result of the soap opera: Tech companies and investors said they were increasingly wary of doing business with any company that could attract the scrutiny of the Trump administration. The outcome is too illogical and unpredictable, said David Pakman, a partner at Venrock, a venture capital firm with offices in Silicon Valley and New York.

“When there are frameworks applied consistently, one can understand the rules of the game and you maneuver within those rules,” he said. “But there is no consistency here.”

A news release published by Walmart on Saturday on its website — then edited later — captured the chaos.

“This unique technology eliminates the risk of foreign governments spying on American users or trying to influence them with disinformation,” the company said. “Ekejechb ecehggedkrrnikldebgtkjkddhfdenbhbkuk.”

Erin Griffith reported from San Francisco and David McCabe from Washington. Ana Swanson contributed reporting from Washington and Raymond Zhong contributed from Taipei.

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TikTok Deal Exposes a Security Gap, and a Missing China Strategy

WASHINGTON — President Trump has declared victory in his latest confrontation with China, saying that he headed off a looming national security threat by forcing the sale of the social media app sensation TikTok to a consortium of American, European and — though he does not say so — Chinese owners.

But it is far from clear from the details released so far that Mr. Trump’s deal resolves the deeper TikTok security problem — which has less to do with who owns the company and more with who writes the code and the algorithms. The code and algorithms are the magic sauce that Beijing now says, citing its own national security concerns, may not be exported to to a foreign adversary.

And the deal certainly doesn’t resolve the broader problem in the expanding technology wars between Washington and Beijing: how the United States government should deal with the foreign apps that are now, for the first time, becoming deeply embedded on the screens of Americans’ smartphones, and thus in the daily fabric of American digital life.

TikTok illuminated the scope of the new competition. The United States wants to have it all. It seeks to reap the benefits of a global internet yet limit its citizens to made-in America products, ensuring that the data that flows through American networks is “clean.” In fact, the State Department has begun what it calls “the clean network initiative,” making sure that data is not tainted by adversaries, starting with China.

“This is a really hard problem and bashing TikTok is not a China strategy,” Amy Zegart, a senior fellow at the Hoover Institution and Stanford’s Freeman-Spogli Institute. “China has a multi-prong strategy to win the tech race,” she said. “It invests in American technology, steals intellectual property and now develops its own technology that is coming into the U.S.,’’ as TikTok did with remarkable success in just two years.

“We don’t have to guess what their intentions,” she said. “They have written what their intentions are, and it’s called ‘Made in China 2025,’” the country’s strategy of becoming a peer competitor of the United States in all major technological arenas in the next five years. “And yet we think we can counter this by banning an app. The forest is on fire, and we are spraying a garden hose on a bush.”

If American politicians seem to be behind on this one, perhaps it is because technological progress has once again outpaced the political debate. On Capitol Hill, the China problem many politicians still fume about is cheap Chinese goods, ignoring the fact that China’s labor is no longer inexpensive. Others call for crackdowns on intellectual property theft, a problem that George W. Bush tried to tackle with his Chinese counterpart in the Great Hall of the People 15 years ago, and that Barack Obama and President Xi Jinping, then new as China’s president, declared they had solved five years ago.

Of course, they didn’t. China shifted its hacking operations from units of the People’s Liberation Army — some indicted by the Justice Department — to the Ministry of State Security. In recent days, the F.B.I. has warned of broader surveillance and theft operations on American campuses, much of it aimed at coronavirus vaccines.

TikTok presented an entirely new problem, one that most policymakers in the United States had not contemplated before.

For the first time, a genuine Chinese app — not a knockoff of something invented in the United States or Europe — captured the hearts of American teenagers and millennials. On one level, it was harmless: TikTok is mostly jammed with one-minute dance videos. By many measures, it was a bigger parenting problem than a national security problem. Whatever it was, it clearly wasn’t on Washington’s radar the way that the expansion of China’s nuclear arsenal, or its actions in the South China Sea, dominate the China debate.

Yet as Brad Smith, the president of Microsoft, which competed with Oracle to buy TikTok’s operations in the United States, noted, “there is a potential threat.” To make TikTok tick, the company collects vast amounts of data on Americans’ viewing habits. And the same algorithm that picks your next dance video could, in the future, pick a political video. (There is already more than a whiff of political content on the app.)

Like Oracle, Microsoft would have taken over the storage of all data on Americans, keeping it in the United States. (TikTok currently has a major data server in Virginia, but backs up data in Singapore.) But Microsoft’s bid went further: It would have owned the source code and algorithms from the first day of the acquisition, and over the course of a year moved their development entirely to the United States, with engineers vetted for “insider threats.”

So far, at least, Oracle has not declared how it would handle that issue. Nor did President Trump in his announcement of the deal. Until they do, it will be impossible to know if Mr. Trump has achieved his objective: preventing Chinese engineers, perhaps under the influence of the state, from manipulating the code in ways that could censor, or manipulate, what American users see.

“If Oracle is providing hosting with the majority of engineering and operations staying with ByteDance, then the only effect of this deal was to swing billions of dollars of cloud revenue,” said Alex Stamos, who runs the Stanford Internet Observatory. “The details of the deal will really matter, and so far the public has not been provided with enough information to have an educated opinion.”

Without that issue resolved, it is unclear how Mr. Trump could declare that the security issues are solved, much less how he could say that the new entity “will have nothing to do with China.”

The longer-run issue, however, is that there will be more TikToks, companies around the world that develop apps that Americans love — or see as a hedge against their own government. Already, many Americans use encryption apps, like Telegram, that are based outside the United States, so that the United States would have a more difficult time issuing subpoenas for the content. Attorney General William P. Barr has already called for greater scrutiny — and perhaps abolition — of any such app that does not allow the United States a legal “back door.”

It seems unlikely that any administration — Democrat or Republican — could actually succeed at banning foreign apps whose code they found suspicious or difficult to access. It would be as problematic to enforce as Prohibition, which lasted 14 years in the United States before it was repealed, by constitutional amendment.

But the bigger issue is that the movement to ban Chinese apps — the next target is WeChat, which was going to be cut off by executive order on Sunday until a federal judge intervened, at least temporarily — defeats the original intent of the internet. And that was to create a global communications network, unrestrained by national borders.

“The vision for a single, interconnected network around the globe is long gone,” Jason Healey, a senior research scholar at Columbia University’s School for International and Public Affairs and an expert on cyber conflict. “All we can do now is try to steer toward optimal fragmentation.”

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