Why US is threatening a ban, and what may happen next
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 new legislation.
The law, part of an aid package for Ukraine, Israel and Taiwan, sets the clock ticking on a potential ban for an app that is hugely popular in the US. Here is a guide to the law and what might happen next.
How does the legislation pave the way for a sale or ban?
The bill gives TikTok’s Beijingbased 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 on an extension.
If ByteDance fails to carry out a sale, then it will faces a nationwide ban, with app stores and web hosts blocked 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, has said ByteDance is “controlled by the Chinese government” and
uence 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 challenge the law?
TikTok had already declared that it would fight the bill in the courts as soon as it was 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 yesterday that “we aren’t going anywhere”, adding: “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 firm 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 ban 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, the civil liberties director of 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 Steven 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 retailer Walmart to take a large stake. ByteDance’s US investors include 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 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 (£80.4bn) with the algorithm but between $30bn and $40bn without.
What does the Chinese government think?
Beijing 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 US. China also has export rules that ban the sale of certain technologies.
Will other countries follow suit with a divest-or-ban move?
TikTok is already under pressure elsewhere in the west because of concerns over data. It has been banned from government-issued phones in the UK, US, Canada and New Zealand – and European Commission staff have also been banned from using it on workissued devices. There have been calls for a UK ban, including by the former Tory leader Iain Duncan Smith, who said last month: “We should have done it ourselves.”
TikTok and dozens of other Chinese apps were banned in India in 2020 after the government said they were “prejudicial” to sovereignty and security.