The Senate will have a tough time passing the bill, which would compel TikTok’s Chinese parent company to sell the well-known social media app.
Legislation aimed at forcing the Chinese technology company ByteDance to sell its enormously popular social media app TikTok was adopted by House legislators on Wednesday.
The vote marked the most recent chapter in a protracted cold war between China and the United States over ownership of important technologies, such as artificial intelligence and computer chips. The White House and lawmakers are worried that TikTok’s Chinese ownership might jeopardize national security because Beijing might use the app to spread misinformation or obtain access to American user data.
The Senate will not be easy on this bill. The Democratic leader, Senator Chuck Schumer of New York, has not yet stated that he will put it to a vote.
What is known about the bill is as follows.
Why did House members vote in favor of the bill?
Many are concerned that ByteDance may be forced to comply with Chinese legislation if the Chinese government demanded the personal information of Americans from the company.
Legislators such as Senator Mark Warner, a Democrat from Virginia, and Representative Mike Gallagher, a Republican from Wisconsin who co-led the bill, have expressed concern that China may exploit TikTok’s potent algorithm to distribute political propaganda to its followers. The worries have been raised in the past year by Avril Haines, the director of national intelligence, and Christopher A. Wray, the director of the Federal Bureau of Investigation.
Bipartisan support has been shown for the bill that Mr. Gallagher and Illinois Democrat Raja Krishnamoorthi proposed. With one member present, the House voted 352 to 65 to approve the bill.
According to TikTok, the worries are unfounded. It states that international institutional investors, such as BlackRock and Susquehanna International Group, own over 60% of the business. It also states that three of the board’s five members are Americans. The corporation claims to have invested over $1 billion in a strategy that maintains private customer information in the United States on servers run by cloud computing giant Oracle.
How might ByteDance be compelled to sell TikTok under the bill?
In essence, the bill mandates that TikTok be sold to a bidder who satisfies the US government within six months. The purchase would have to ensure that ByteDance lost all authority over TikTok and its user content recommendation algorithms.
It would be illegal for app shops and web hosting firms to distribute or update TikTok in the US if ByteDance is unable or unwilling to sell the program. Every business that partners with TikTok or makes its app available for download risks punishment from the Justice Department.
Would ByteDance find it simple to sell TikTok?
Most likely not.
Few businesses or people could afford TikTok given its exorbitant price tag and 170 million users in the US alone. It’s also unclear if ByteDance would sell the app’s US operations only or its whole worldwide footprint if compelled to sell.
Giants in the digital industry including Microsoft, Google, and Meta, the company that owns Facebook and Instagram, are among those that could be able to afford to purchase TikTok. However, the Biden administration has made multiple attempts to prevent those businesses from growing by utilizing antitrust law.
China might prevent a sale of TikTok, even if ByteDance was able to locate a buyer. When US officials attempted to compel TikTok to be sold in 2020, Beijing imposed export restrictions on technology that bore resemblance to the app’s content recommendation system. Beijing stated that it would be against a sale last year.
According to James Lewis, senior vice president of the Center for Strategic and International Studies, “you’re not going to be able to force ByteDance to divest.”
What additional possibilities does ByteDance have for TikTok?
In addition to selling, ByteDance may consider other options, including as splitting up TikTok through an IPO.
The specifics of the divestment would likely depend on whether ByteDance decided to sell or spin off TikTok’s full worldwide operations or simply the parts of the app that are available in the US. Selling the US app just might lead to serious problems, such as how the algorithm that recommends content to users works or whether it can show content from other nations.
What role does a ban play politically?
Bipartisan support for a ban has been demonstrated by concerns expressed by both Republicans and Democrats on China’s influence.
However, previous President Donald J. Trump unexpectedly voiced his opposition to the TikTok law in the last few days. That was a change from his stance when he attempted to outlaw the app in 2020.
“Trump’s resistance is a significant new obstacle to this bill becoming law,” TD Cowen policy analyst Paul Gallant stated. “A lot hinges on whether he takes this TikTok bill as seriously as he did the border security bill.”
The bill has also been challenged by free speech organizations, which claim that a prohibition will stifle free speech.
What effects may a ban have on TikTok users, and how would it operate?
The bill would impose punitive fines on app stores, such as those run by Apple and Google, if they distributed or updated TikTok, assuming it passes the Senate and is signed into law by the president.
Although the software is already installed on millions of phones in the US, consumers’ access to it will probably suffer as a result of the update limitation.
A clause that forbids web hosting firms from aiding in the app’s distribution would be added to this.
Tech policy is covered by David McCabe. In 2019, he moved from Axios to The Times. Additional information on David McCabe
Sapna Maheshwari covers technology, media startups, and TikTok. She has over ten years of experience covering business. Send her an email at sapna@nytimes.com. Further details regarding Sapna Maheshwari
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