Biden signed a bill that could ban TikTok. What happens next?

Biden signed a bill that could ban TikTok. What happens next? | The Hill

Tik Tok creators hold signs
Greg Nash

Tik Tok creators hold signs during a press conference outside the U.S. Capitol in Washington, D.C., on Tuesday, March 12, 2024 as the House debates legislation to possibly ban the popular social media app if it doesn’t cut ties from its Chinese owners.

President Biden signed a bill that could lead to a ban on TikTok, but the video sharing app won’t be cut off from its millions of American users just yet.

The bill moved unusually fast, getting signed into law by the president less than two months after it was first unveiled in the House. Biden’s signing kicks into place a timeline for TikTok’s China-based parent company to sell the app or face a ban from U.S. app stores and networks.

ByteDance will have up to a year to find a buyer, but the process is likely to be marred by Chinese rules dictating the export of technology and a court challenge from TikTok.

“This unconstitutional law is a TikTok ban, and we will challenge it in court,” a TikTok spokesperson said in a statement.

“We believe the facts and the law are clearly on our side, and we will ultimately,” the spokesperson added.

Here’s what to expect next as the law takes effect.

TikTok has up to a year to sell

The Foreign Adversary Controlled Applications Act, which was added to the foreign aid package Congress passed this week, would force ByteDance to divest TikTok or be banned in the U.S.

Supporters of the measure say TikTok poses national security concerns because of its ownership by a Chinese company, which they say exposes the sensitive data of American users to the Chinese government. TikTok has pushed back against those accusations.

Lawmakers who supported the bill said several classified Congressional briefings exposed them to the risks posed by TikTok and its connection to the Chinese government through ByteDance.

A the TikTok spokesperson said Wednesday the company has “invested billions of dollars to keep U.S. data safe and our platform free from outside influence and manipulation.”

Critics of the law said that national and data security threats span across the industry and did not support a bill that named and targeted one company as a way to mitigate the issues.

The version that was included in the aid package extended the timeline for the sale from six months, as set in the version passed by the House in March, to 270 days. That would push the deadline to January, after the heated 2024 election.

The president also has the authority to issue a 90-day extension for ByteDance to sell TikTok, which would push the deadline to April of next year.

That extension was a crucial aspect that gave the bill more support among senators that were non-committal about the bill initially, including Senate Commerce Committee Chair Maria Cantwell (D-Wash.).

But even with the extension, some critics of the bill have said it is not a long enough timeline for a sale of this size and argue the bill is ultimately a ban given the challenges around a sale.

“Given the average length to sell a company is over a year, the new, longer timeline for a forced sale still doesn’t guarantee enough time to find a buyer for such a large company, making a ban just as likely as with the last bill,” Jenna Leventoff, ACLU’s senior policy counsel for the First Amendment, said in a statement.

Who would buy TikTok, and would it be the same?

Supporters of the bill insist the bill is not an outright ban despite how the company describes it since it gives ByteDance the ability to let the app live on with a different owner.

“We hope TikTok will continue,” said Sen. Mark Warner (D-Va.) in a speech on the Senate floor Tuesday before the final vote, but without being controlled by country defined as an adversary by U.S. law.

WedBush analysts said in a memo Tuesday the “likely buyers” for TikTok would be Microsoft or Oracle, which was involved with the TikTok’s “Project Texas,” an attempt by TikTok to ease concerns by putting U.S. data in U.S.-based Oracle servers, and “strategically would make a logical fit.”

“A number of private equity and consortiums would also clearly put together bids for this asset with Former Treasury Secretary Steven Mnuchin among many that have shown early interest for this key asset,” WedBush analysts said in the memo.

But China’s export control rules are a crucial hurdle that could muddy the process of another company purchasing the app and how it continues to operate after a potential sale.

The rules updated in 2020 include restrictions on the sale of specific technologies, like algorithms, without government approval. China will likely try to block the sale of TikTok’s algorithm itself, said Stephen Weymouth, an associate professor Georgetown University’s McDonough School of Business.

“The value of TikTok is the algorithm, and it’s not obvious who would be interested in buying TikTok if the algorithm doesn’t come with it. You’re buying a brand rather than an actual useful app,” Weymouth said.

If a sale without the algorithm went through, that would also mean TikTok in name could be different from the app that users, creators and small businesses have been pushing Congress and the president to keep in place.

Court challenge could block law, drag out timeline

A lawsuit could also tie up a potential ban and possibly drag out the 270-day deadline imposed by the legislation/

TikTok, along with some advocacy groups and progressive lawmakers, say the law impedes on free speech rights. That seems to be TikTok’s central argument as it prepares a court challenge.

“This ban would devastate 7 million businesses and silence 170 million Americans. As we continue to challenge this unconstitutional ban, we will continue investing and innovating to ensure TikTok remains a space where Americans of all walks of life can safely come to share their experiences, find joy, and be inspired,” the TikTok spokesperson said in a statement.

TikTok has been successful before at blocking attempts to ban the app, both under the Trump administration and in an attempt by Montana.

Weymouth said the focus on national security concerns though may lead to a different outcome in court.

Reps. Mike Gallagher (R-Wisc.) and Raja Krishnamoorthi (D-Ill.), the top lawmakers on the House Select Committee on the Chinese Communist Party, said when they first introduced the bill in March that it also aimed to get around issues other attempts have faced in courts.

For example, instead of only naming TikTok and ByteDance, the bill also grants authority for the president to designate other apps as foreign adversary controlled applications. It also offered the window of time for the sale instead of being drafted as an out-right ban, like other attempts.

The federal law may also fare a better chance than a state law, like Montana’s, because “federal legislation is more likely to be seen by the courts both as responding to an addressing national security concerns,” Justin Hurwitz, a senior fellow and academic director of the Center for Technology, Innovation and Competition, said in an email.

“The government has a pretty good claim that the law is written to address a compelling government interest, which is a key question for First Amendment analysis. The harder question is whether this law is an effective and narrowly tailored way to address these concerns,” Hurwitz added.

Updated at 12:43 p.m. EDT.


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