US lawmakers are threatening to ban TikTok, but also say they are giving its Chinese parent company a chance to keep it going.
The premise of a bipartisan bill set to be voted on in the U.S. House of Representatives is that TikTok fans in the U.S. can continue scrolling through their favorite social media app as long as Beijing-based ByteDance relinquishes ownership of it.
“It doesn’t have to be this painful for ByteDance,” U.S. Rep. Raja Krishnamoorthi, an Illinois Democrat and co-sponsor of the bill, recently wrote on . It’s their choice.”
But experts say it won’t be as simple as lawmakers make it seem.
While some people have expressed interest in buying TikTok’s U.S. business — including “Shark Tank” star Kevin O’Leary — there are a number of challenges, including a six-month deadline to make it happen.
“Someone should actually be willing to spend the large amount of money that this product and system is worth,” said Graham Webster, a researcher at Stanford University who studies Chinese technology policy and U.S.-China relations. “But even if someone has sufficient pockets and is willing to negotiate a purchase, this kind of matchmaking in acquisitions does not happen quickly.”
Big tech companies could afford it, but would likely face intense scrutiny from antitrust regulators in both the US and China. On the other hand, if the bill actually becomes law and survives the court’s First Amendment challenges, it could make TikTok cheaper to buy.
“One of the most significant effects of the legislation would be a reduction in the retail price,” said Matt Perault, director of the University of North Carolina’s Center on Technology Policy, which receives funding from TikTok and other tech companies. “As you approach that 180-day clock, the pressure on the company to sell or risk being banned completely would be high, meaning the acquirers could likely get it at a lower price.”
The bill calls for a ban on TikTok in the US, but makes an exception if there is a “qualified divestiture.”
That could only happen if the U.S. president determines “through an interagency process” that TikTok “is no longer controlled by a foreign adversary,” according to the bill. Not only that, but the new US-based TikTok should completely cut ties with ByteDance. This does not include “collaboration regarding the operation of a content recommendation algorithm or any data sharing agreement.”
It reflects long-standing concerns that Chinese authorities could force ByteDance to hand over data on the 170 million Americans who use TikTok. The concern stems from a series of Chinese national security laws that force organizations to help gather intelligence.
It is an unusual bill because it targets one company. Normally, a government group led by the Secretary of the Treasury, the Committee on Foreign Investment in the United States (CFIUS), would assess whether such a sale would pose a threat to national security.
Yes. The Trump administration concluded a deal in 2020 in which the American companies Oracle and Walmart would have taken a major stake in TikTok for national security reasons.
The deal would also have made Oracle responsible for hosting all of TikTok’s U.S. user data and securing computer systems to ensure national security requirements are met. Microsoft also made a failed bid that CEO Satya Nadella later described as the “strangest thing I’ve ever worked on.”
Rather than congressional action, the 2020 regulation was a response to then-President Donald Trump’s series of executive actions targeting TikTok.
But the sale never went through for various reasons. Trump’s executive orders were held up in court as the 2020 presidential election loomed. China had also imposed stricter export controls on its technology suppliers.
Incoming President Joe Biden in 2021 changed course and abandoned the legal process. Now Biden says he supports a bill that would ban TikTok if ByteDance doesn’t want to divest, and Trump doesn’t.