US lawmakers say TikTok will only escape a ban if it finds a new owner
US lawmakers are thinking about banning TikTok but they say they are giving its Chinese parent company a chance to keep it running.
A new law from the US House of Representatives says that TikTok fans in the US can keep using their favourite social media app if ByteDance, based in Beijing, stops owning it.
"It doesn't have to be this painful for ByteDance," said US Rep. Raja Krishnamoorthi, an Illinois Democrat and one of the people who helped make the bill.
He recently wrote on X, "They could make it a lot easier on themselves by simply divesting @tiktok_us. It's their choice." But experts say it's not going to be as easy as the lawmakers say.
WHO WOULD BUY TIKTOK?
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Some people, like Kevin O'Leary from "Shark Tank", have said they might want to buy TikTok's business in the US. But there are problems, including only having 6 months to do it.
"Somebody would have to actually be ready to shell out the large amount of money that this product and system is worth," said Graham Webster, a researcher at Stanford University who looks at Chinese technology policy and is an expert in China/US relations. "But even if somebody has enough money and wants to start talking about buying, these kinds of big deals take time."
Big tech companies could afford to buy TikTok, but they would likely face intense scrutiny from antitrust regulators in both the US and China. However, if the bill banning TikTok in the US becomes law and survives First Amendment court challenges, it could make TikTok cheaper to buy.
"One of the main effects of the legislation would be to decrease the sale price," said Matt Perault, director of the University of North Carolina's Center on Technology Policy, which gets funding from TikTok and other tech companies.
He added: "As you approach that 180-day clock, the pressure on the company to sell or risk being banned entirely would be high, which would mean probably the acquirers could get it at a lower price."
HOW WOULD IT WORK?
The bill, which now moves to the US Senate, calls for prohibiting TikTok in the US but makes an exception if there's a "qualified divestiture." That could only happen if the US president determines "through an interagency process" that TikTok is "no longer being controlled by a foreign adversary," according to the bill.
Not only that, but the new US-based TikTok would have to completely cut ties with ByteDance. That includes no more "cooperation with respect to the operation of a content recommendation algorithm or an agreement with respect to data sharing."
Many people are worried that Chinese authorities might force ByteDance to give them data from the 170 million Americans who use TikTok. This concern comes from a rule in China that says organisations must comply with national security laws that compel organisations to assist with intelligence gathering.
It's an unusual bill in the way 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, or CFIUS, will review whether such a sale would pose any national security threats.
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HAS THIS HAPPENED BEFORE?
Yes, it has! In 2020, the Trump administration set up a deal that would have had US companies Oracle and Walmart take a large stake in TikTok for safety reasons. This deal would have also made Oracle in charge of holding all TikTok's US user data and making sure their computer systems were safe.
Microsoft also tried to buy TikTok, but they didn't get it. Microsoft's CEO Satya Nadella later said it was the "strangest thing I've ever worked on." Instead of action from Congress, this arrangement in 2020 was in response to a series of actions by then-President Donald Trump targeting TikTok.
But the sale never happened for a number of reasons. Trump's orders from the executive got stuck in court as the 2020 presidential election approached. China also had put stricter rules on its technology providers. In 2021, the new President Joe Biden made a U-turn and stopped the legal proceedings. Now, Biden says he supports a bill that would ban TikTok if ByteDance won't sell it, but Trump doesn't agree.
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