U.S. lawmakers are threatening to ban TikTok, but they also say they are giving the Chinese parent company an opportunity to continue operating TikTok.
The premise of a bipartisan bill headed for a vote in the U.S. House of Representatives is that TikTok fans in the U.S. can keep scrolling through their favorite social media app as long as Beijing-based ByteDance relinquishes ownership of the app. Thing.
“It doesn’t have to be this painful for ByteDance,” Rep. Raja Krishnamoorthi, an Illinois Democrat and co-sponsor of the bill, recently posted on X. it’s their choice. ”
But experts say it won’t be as easy as lawmakers make it out to be.
Who will buy TikTok?
Some people have expressed interest in acquiring TikTok’s U.S. operations, including “Shark Tank” star Kevin O’Leary, but there are many challenges ahead, including a six-month deadline. be.
“Someone really needs to be prepared to spend a lot of money to match the value of this product and system,” said Graham Webster, a Stanford University researcher who studies Chinese technology policy and U.S.-China relations. ” he said. “But even if someone had deep pockets and was ready to negotiate a deal, deals on these types of deals don’t materialize quickly.”
Big tech companies can afford it, but they are likely to face increased scrutiny from antitrust regulators in both the United States and China.
Then again, if this bill actually becomes law and survives a First Amendment court challenge, it could make TikTok cheaper to buy.
“One of the main effects of this bill would be to lower selling prices,” said Matt Perrault, director of the University of North Carolina’s Technology Policy Center, which receives funding from TikTok and other tech companies. “As that 180 day approaches, there will be more pressure on companies to sell or risk being banned outright, which means an acquirer will likely be able to buy at a lower price.”
How does it work?
The bill seeks to ban TikTok in the United States, but makes exceptions in the event of a “qualified sale.”
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 will have to completely cut ties with ByteDance.
This will no longer include “cooperation or data sharing agreements related to the operation of content recommendation algorithms.”
This reflects longstanding concerns that Chinese authorities could force ByteDance to hand over data about the 170 million Americans who use TikTok.
The concerns stem from a series of Chinese national security laws that require organizations to assist in intelligence gathering.
This bill is unusual in that it targets a single company.
Typically, a government group led by the Treasury secretary called the Committee on Foreign Investment in the United States (CFIUS) reviews whether such sales pose a national security threat.
Has nothing like this ever happened before?
yes. In 2020, the Trump administration brokered a deal for US companies Oracle and Walmart to acquire large stakes in TikTok on national security grounds.
The deal also makes Oracle responsible for hosting all of TikTok’s U.S. user data and securing its computer systems to ensure it meets national security requirements.
Microsoft also made a failed bid for TikTok, which CEO Satya Nadella later called “the weirdest thing I’ve ever worked on.”
The 2020 agreement was not an act of Congress, but rather a response to a series of executive actions targeted at TikTok by then-President Donald Trump.
However, the sale did not materialize for various reasons. President Trump’s executive order was held up in court as the 2020 presidential election approached. China also imposed stricter export controls on technology providers.
President-elect Joe Biden, who will become president in 2021, reversed course and halted the proceedings. Currently, Mr. Biden has said he is in favor of a bill that would ban TikTok unless ByteDance is sold, but Mr. Trump is not in favor of it.
