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This is a great argument for the rest of us banning nearly all US social media tech from our countries. Frankly I'd support it given the new US government.
Especially when these companies soak up millions to billions of $$$s in ad spending and pay close to zero tax.
When I do a search on Google I give Google information. When Google gives me the results I get information. This data exchange or information barter involves “value” but no money is exchanged. Thus no taxes. This happens billions of times daily across all social media platforms. The analogy above is that data is gold is not far from reality and the data economy is mostly untaxed.
I think focussing on the micro is also a distraction here. An individuals data has almost no marginal value. But if you aggregate everyone's data then it does become valuable. This is why the whole 'just pay me for my data' argument never works.

By extension focussing on the negative impact on an individual is very small, but the overall impact on society and culture is massive (which in turn impacts individuals).

Taking that a step further I think you can argue there is some tragedy of the commons occurring which indicates govt. regulation should exist. Govt regulating media is tough, but as the US showing here, a rule getting rid of foreign actors might be a good idea for many countries.

Exactly. What’s good for the goose is good for the gander. The EU should be watching this closely.
Given that Elon Musk is supporting neo-Nazis in Germany,[0] banning Twitter/X is not a bad idea.

0. The neo-Nazis in question are the Alternative für Deutschland (AfD). The AfD has many high-ranking members with neo-Nazi pasts, such as the leader of the party in the state of Thüringen, Björn Höcke, who used to write for a neo-Nazi publication under a pseudonym, "Landolf Ladig" (remind you of any other name?). This guy now runs the AfD in the state of Thüringen, the state where the AfD performs the best, electorally (33%, making them the largest party in the state). There are many other high-ranking AfD members with similar neo-Nazi pasts and affiliations. Then there are those who merely go on and on about immigrants, foreigners, minorities, but who are smart enough not to have explicitly associated themselves with open neo-Nazis. Needless to say, the fact that this sort of party is reaching 33% in some parts of the country is hugely concerning in Germany.

And nothing of value would be lost. Just like with TikTok “going dark”.
It is and EU started doing this more than a decade ago and has come fairly far. GDPR and other privacy focused regulation made great strides in restricting what US platforms are allowed to do in EU, and for government institutions there has been some movement away from US owned cloud services as a matter of national security and data protection. So far the reaction for US companies has been mostly to setup EU-only versions, or policies where data remains on EU located servers, but there was also a lot of "threats" about Facebook leaving EU or other sites blocking EU users as a response to those regulations.

The next round of regulations, NIS2 for example, is starting to get up steam. This year we also have the Digital Services Act. Time will tell if US media platforms continue to develop EU-versions, and in what forms, or if they give up.

In term of national security I would be a bit more afraid of Microsoft 365 than Meta.

Wouldn't that eliminate 90% of social media in your country?
Yes, which is wonderful as new alternatives would grow. It's not like this stuff is rocket science, it's pretty trivial to build.
You make that sound like it's a bad thing. There's extremely little genuine value left in social media platforms to the average user these days. Most are completely focused on getting you to want to doom scroll, not actually connect with friends.

Maybe its time to go back to a simpler MySpace or FriendsReunited style setup for actual social media. The problem is theres not much money in that, nor are people likely to visit as regularly.

You could still have "X Germany" or whatever, that cross-syndicates content with other "X $COUNTRY" companies. But it would be a local company, under the jurisdiction of local laws -- and that seems to be the point.
...and nothing of value would be lost.
It is my limited understanding that's the case in China?
The point being that there are countries other than the US and China.
Especially with our billionaires openly declaring they are working with the oncoming administration because other powers like the EU trying to enforce their laws within their borders. China is just on top of the game since they are a provider instead of a consumer.
China and Russia and others like them are definitely way ahead. And the way I see this going is that countries take their digital borders far more seriously in the future. The era of the open internet is gone, and I don't particularly think it should be mourned.

Digital borders should only be open and allow free traffic between allies.

edit: since it won't let me reply to posters under here. What I mean is in stopping foreign propaganda and interference. Elon Musk can't spend hundreds of millions to influence e.g. the Chinese people in ways that benefit the US.

I don't think many people separate out the "incoming" and "outgoing" aspects of firewalls, and conflate firewalls with censorship. Most of the countries that employ firewalls do both, censor as well as protect. But it's not a requirement that you must censor your own people in order to stop foreign agents interfering in your society.

This is quite literally what banning TikTok is about. Suddenly the US has decided that they don't like it when other countries do to them what the US routinely does to others.

> Digital borders should only be open and allow free traffic between allies.

Oh, how far we have fallen.

> Governments of the Industrial World, you weary giants of flesh and steel, I come from Cyberspace, the new home of Mind. On behalf of the future, I ask you of the past to leave us alone. You are not welcome among us. You have no sovereignty where we gather.

Nation states saw this, laughed, and proceeded to colonize the Internet almost immediately. The US is notable for (until recently) being the most open, but China basically never allowed unrestricted international network traffic. In fact, I honestly think China shouldn't have been allowed onto the global Internet on the basis of "no free speech for censors".
What do you mean by way ahead?

US owns most of the social networks, video streaming platforms and most of the classic media (tv,...).

The diffrence is, that countries like US (and many EU countries) point a finger at china/russia and accuse them of censorship, claim themselves to be free, and then do the same censorship that russia/china do.

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I'd rather go for a consistent law. It if means that social media based in other countries should be banned, then ban all of them at once. Not just the ones that the national companies haven't been able to out-compete, because that seems a bit too convenient to be fair.