U.S. House passes bill forcing TikTok owner to divest or face nationwide ban

The U.S. House of Representatives approved a bill requiring ByteDance, the owner of TikTok, to sell the platform or else face a total ban in America.

Under the new legislation, ByteDance has a six-month ultimatum to divest its controlling stake in TikTok, or else it will lose its 150 million users in the States.

Why we care. A U.S. ban on TikTok would significantly impact advertisers, especially those targeting Gen Z. This demographic favors TikTok over platforms like Google, making it a crucial channel for advertisers seeking to reach this audience.

Security concerns. The vote was held to address concerns related to national security surrounding TikTok’s ownership. The app is owned by ByteDance, which is based in Beijing and therefore falls under China’s controversial cybersecurity laws. These laws, among other things, contain provisions that could potentially require TikTok to hand over U.S. user data to the Chinese Communist Party upon request.

Next steps. If the bill passes in the Senate, President Joe Biden has promised to sign it, which could lead to tensions with China. ByteDance would need China’s permission to sell TikTok, but China has said they’ll oppose any forced sale. China warns that this move might have negative consequences for the U.S.

Will TikTok be banned? The fate of the legislation in the upper chamber of Congress remains uncertain, as former President Donald Trump, who previously sought to ban TikTok, now opposes the proposed ban following a meeting with Republican donor Jeff Yass, a major ByteDance stakeholder. Trump’s stance has garnered support from some House members, while certain Democrats are also against the ban, concerned that it may estrange the app’s youthful userbase, at a time when the party is striving to maintain its influence among younger voters.

What the Senate is saying. Despite the mixed opinions within Congress, the leaders of the Senate Intelligence Committee, Mark Warner, a Democrat, and Marco Rubio, a Republican, have welcomed the House vote. They said in a statement:

• “We are united in our concern about the national security threat posed by TikTok — a platform with enormous power to influence and divide Americans whose parent company ByteDance remains legally required to do the bidding of the Chinese Communist Party.”
• “We were encouraged by today’s strong bipartisan vote in the House of Representatives, and look forward to working together to get this bill passed through the Senate and signed into law.”

What China is saying. Foreign ministry spokesperson Wang Wenbin said the move would “come back to bite the US.” He added:

• “Although the United States has never found evidence that TikTok threatens U.S. national security, it has not stopped suppressing TikTok.”
• “This kind of bullying behaviour that cannot win in fair competition disrupts companies’ normal business activity, damages the confidence of international investors in the investment environment and damages the normal international economic and trade order.”

What TikTok is saying. TikTok accused U.S. senators of staging a “predetermined” vote to ban the platform in the U.S. The platform said in a statement:

• “This legislation [was] a predetermined outcome: a total ban of TikTok in the United States. The government is attempting to strip 170 million Americans of their Constitutional right to free expression.”=”
• “This will damage millions of businesses, deny artists an audience, and destroy the livelihoods of countless creators across the country.”