A new legislative bill in the U.S. House of Representatives could force TikTok’s parent company to sell the app due to fears that China’s involvement in data collection could pose a national security threat.
Voting Against ByteDance
The United States House of Representatives is now set to vote on a bill that would force ByteDance, a Chinese-owned internet company, to sell TikTok.
The Larger Rivalry
This legislative decision is part of a more significant rivalry between the United States and China, stemming from American concerns that TikTok’s Chinese ownership could ultimately lead to a national security threat.
Security Concerns
American representatives fear that TikTok could pose a national security threat because of the app’s ability to access data outside the app on a user’s phone and its ability to spread disinformation campaigns spearheaded by Beijing.
Bipartisan Support
Currently, this bill has bipartisan support from Republican and Democratic representatives due to these concerns that Bytedance will provide American personal data to the Chinese government.
High-Ranking Officials Support
Even high-ranking politicians like FBI Director Christopher A. Wray and Director of National Intelligence Avril Haines have supported this bill, citing these concerns over personal data.
TikTok’s Counterarguments
In response to these allegations, ByteDance argues that these concerns are completely unfounded because TikTok’s ownership structure makes it an international company with investors and board members worldwide.
U.S. Data Storage
ByteDance also claims to have taken safeguards to protect U.S. user data through domestic storage and operational measures using an American cloud computing firm called Oracle.
The proposed bill currently being debated would require TikTok to be sold to buyers approved by the U.S. government within the next six months.
Relinquishing Control
The goal of this sale would be to ensure that ByteDance relinquishes its control over TikTok and the recommendation algorithms.
Stopping the Sale
If the bill passes and ByteDance does not sell the app within the given time frame, legal restrictions will be placed on it to prevent its sale in app stores and web hosting services within the United States.
Forcing the Sale
The legal grounds for the House of Representatives to force Bytedance to sell TikTok is questionable at best, especially when considering their vast user base and high monetary valuation.
Chinese Regulations
In addition to this legal gray area in America, recent Chinese regulatory actions suggest that Beijing would not approve such a sale, forcing Bytedance to choose between American and Chinese regulations.
Buying TikTok
If the bill does pass and ByteDance chooses to sell there is also the matter of who the app would be sold to.
The Role of Antitrust Laws
If TikTok were to be sold, the most likely buyer would be other major tech companies, but the Biden administration’s antitrust efforts could potentially block such a purchase and leave few options for the app to be sold to.
Trump’s Support
Even though the proposed bill has bipartisan support, one noteworthy opponent is actually former president Donald J. Trump, despite his previous stance in favor of such a bill.
An Unfair Advantage
Previously, Trump called TikTok a “national security threat,” but since this new bill has been proposed, he has said that such a ban could give competing social media networks like Instagram an unfair advantage.
The Trump Effect
When discussing Trump’s support, Paul Gallant, a policy analyst for TD Cowen, said, “Trump’s opposition is a meaningful new headwind to this bill becoming law. A lot will depend on whether he goes to the mat on this TikTok bill the way he did with the border security bill.”
Free Speech Advocates
In addition to Trump’s opposition, many free speech advocates have also opposed the bill, claiming that it could inadvertently affect expressive freedoms.
Civil Penalties
If the bill is passed into law, it would then place civil penalties on platforms such as Apple and Google’s app store for distributing over even updating TikTok.
Limiting Distribution
This legislative approach is the Government’s best chance at limiting app distribution since it has few options when directly imposing legal repercussions upon Bytedance.
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The content of this article is for informational purposes only and does not constitute or replace professional financial advice.
