Joe Biden signs into law bill requiring Chinese owner to sell app’s US operations
Joe Biden has signed into law a bill that requires TikTok’s Chinese owner to sell the social media app’s US operations or face a ban, after the Senate passed the legislation.
The law, part of a foreign aid package for Ukraine, Israel and Taiwan, sets the clock ticking on a potential ban for a platform that is hugely popular in the US.
Here is a guide to the TikTok legislation and what may happen next.
How does the legislation pave the way for a sale or ban?
The bill gives TikTok’s Beijing-based parent, ByteDance, 270 days to sell the app’s US operations. If ByteDance appears close to completing a deal as the deadline looms, the president can authorise a 90-day extension.
The deadline arrives at about the time the next president is inaugurated, on 20 January, which means Donald Trump, if he wins the election, could decide whether the sale process is extended.
If ByteDance fails to carry out a sale, then it will face a nationwide ban, by the blocking of app stores and web hosts from distributing TikTok.
Why is the US threatening to ban TikTok?
US lawmakers and authorities are concerned that data from TikTok’s 170 million US users could be accessed by the Chinese state under national security laws.
Christopher Wray, the director of the FBI, the US domestic intelligence and security agency, has said that ByteDance is “controlled by the Chinese government” and has warned that Beijing authorities can influence people by manipulating the algorithm that curates what people view on TikTok, as well as allowing the government to collect user data for “traditional espionage operations”.
TikTok denies that the Chinese government has attempted to access US user data and says it would reject any such request. In an appearance before Congress last year, TikTok’s chief executive, Shou Zi Chew, said: “Let me state this unequivocally: ByteDance is not an agent of China or any other country.”
Will TikTok appeal against the law?
TikTok has already declared that it will fight the bill in the courts as soon as it is signed, labelling it a breach of the US constitution’s first amendment, which protects free speech.
“At the stage that the bill is signed, we will move to the courts for a legal challenge,” wrote TikTok’s head of public policy for the Americas, Michael Beckerman, in a memo to staff at the weekend.
He added: “We’ll continue to fight, as this legislation is a clear violation of the first amendment rights of the 170 million Americans on TikTok.”
Chew said in a video posted soon after Biden signed the bill on Wednesday that “we aren’t going anywhere”, adding that “the facts and the constitution are on our side and we expect to prevail again”.
The first amendment stance has already worked in TikTok’s favour after a judge in Montana, which had banned the app, blocked the move because it violated users’ free speech rights.
The last time the US tried to ban TikTok, in 2020 after an executive order issued by Trump, the company secured a preliminary injunction against the move after a judge in Washington said a prohibition may “likely exceed” the bounds of the law.
TikTok could pursue an injunction again, before challenging the constitutionality of the bill in a full case.
Carl Tobias, a professor at the University of Richmond law school, believes the legal process will probably take two years “during which time the law would not ban the app”.
The US government is likely to argue in court that there are national security grounds for a ban.
David Greene, civil liberties director at the Electric Frontier Foundation, a digital rights group, said: “The government will have to demonstrate to the court that the national security concern is real and not hypothetical or conjectural … and that a total ban on TikTok as it currently exists is the appropriately tailored means of addressing that national security concern.”
Who might be interested in buying TikTok’s US operations?
The former US treasury secretary, Steve Mnuchin, said in March he was putting together a consortium to buy TikTok’s US assets, calling it a “great business”.
If past suitors are any indication of interest, in 2020 Microsoft explored a deal to buy TikTok, at the behest of Trump, who had also encouraged the US tech firm Oracle and the retail corporation Walmart to take a large stake. ByteDance has a number of US investors, including the investment firms General Atlantic, Susquehanna and Sequoia Capital.
However, analysts at Wedbush Securities, a US financial services firm, say they do not expect the Chinese government to sanction a sale that includes TikTok’s algorithm, the extremely effective technology that curates what people see on the app.
“The value of TikTok would dramatically change without the algorithms and makes the ultimate sale/divestiture of TikTok a very complex endeavour with many potential strategic/financial bidders waiting anxiously for this process to kick off,” Wedbush said in a note to investors, which valued its UK operations at $100bn (£80.3bn) with the algorithm but between $30bn and $40bn without.
What does the Chinese government think?
The Chinese government said last year it would “firmly oppose” the sale of the app, adding it would “seriously undermine the confidence of investors from various countries, including China, to invest in the United States”. China also has export rules that prohibit the sale of certain technologies.
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Biden Will Keep Campaigning On TikTok—Despite Signing Law That Could Ban The App
TOPLINE
President Joe Biden’s reelection campaign will stay on TikTok, even though the president signed a bill Wednesday morning that requires the Chinese-owned app to be sold or banned in the U.S due to safety concerns.
KEY FACTS
The Biden campaign told Forbes TikTok is a way for the campaign “to show up and meet voters where they are” and to ensure their “content is being seen by voters.”
The campaign said it would be using enhanced security measures on TikTok, but could not elaborate “for security reasons.”
Earlier Wednesday, Biden signed the bill—which was packaged with aid for Ukraine, Israel and Taiwan—that requires TikTok’s China-based parent company ByteDance to either sell the platform or face a U.S. ban in the next year.
The bill requires TikTok’s sale or ban because of security concerns that ByteDance could give TikTok user data like browsing history and location to China’s government, though TikTok officials have routinely denied the app has or would give user information to the government.
CRUCIAL QUOTE
“When the stakes are this high in the election, we are going to use every tool we have to reach young voters where they are,” the campaign said in a statement to Forbes.
BIG NUMBER
306,300. That’s about how many followers the Biden-Harris HQ account has on TikTok as of Wednesday afternoon.
KEY BACKROUND
Biden’s team launched the TikTok account, @bidenhq, in February—despite the app already being banned on most devices owned by the federal government over security concerns. At the time, the Biden campaign said the TikTok account, which often features videos of the president and other politicians, was an effort to reach younger voters, NBC News reported. A number of lawmakers at the federal and state levels have been pushing for a TikTok ban for years, citing safety concerns and also the app’s impact on youth mental health.
Former President Donald Trump—who is not on TikTok—first attempted to ban TikTok in 2020 by signing an executive order requiring its sale in 45 days or banning it, though the order was blocked in court. Trump has recently reversed his stance and suggested he is against a ban. A number of states have since banned the app from their government owned devices, as well, and some have tried to ban it completely, though they’ve faced legal challenges from TikTok or TikTok users.
WHAT TO WATCH FOR
The inevitable legal battle over the TikTok ban. TikTok has already vowed to fight the ban in court and said in a statement on its social media that, despite data privacy concerns, it has “invested billions of dollars to keep U.S. data safe and our platform free from outside influence and manipulation.”
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