TikTok’s fate in the US has never been more in doubt after Congress approved a bill this gives its parent company two options: sell it to an approved buyer or see it banned.
President Joe Biden signed the law on Wednesday.
But it could be years before TikTok’s ban takes effect, since its Chinese parent company, ByteDance, will likely challenge the law in court.
And even if it survives a legal challenge, no one really knows what would happen next.
How soon could a possible ban take effect?
It would probably be several years away.
According to the text of the law, ByteDance would have nine months to divest and find a US buyer for TikTok once the bill is signed into law.
Additionally, the president may extend the deadline for an additional 90 days.
This means that without sales, the earliest possible closure of TikTok in the United States would be more than a year away.
But it’s more complicated than that.
If ByteDance sues to block implementation of the law — which it has promised to do — the bill will be reviewed by the Washington Circuit Court of Appeals, according to Isaac Boltansky, the company’s chief policy officer of financial services BTIG.
Boltansky said ByteDance would file suit no later than this fall. And while the matter is under judicial review, the “clock” on any ban is effectively suspended, he said.
Once the Washington court issues its decision, the losing side will likely seek review by the U.S. Supreme Court.
That would delay the ban for another year, meaning nothing would take effect until 2026, Boltansky said.
TikTok will argue that the ban is unconstitutional and that it has also taken steps to protect US users’ data. The app has already launched an aggressive lobbying campaign, featuring a number of small business owners and influencers who say it’s their lifeblood.
“We need to make enough noise so they don’t take away our voice,” TikTok user @dadlifejason, who has 13.8 million followers, says in a TikTok ad shared on social media.
What if you found a buyer?
The bill states that TikTok can continue to operate in the United States if ByteDance sells the app to a company licensed by the United States.
While big U.S. tech companies would love to get their hands on the platform, Boltansky said regulators in the Biden administration — not to mention the Republican Party’s critics of big tech companies — have no interest in expanding the power, reach or influence of these companies.
Other outside groups could emerge. At least one group led by Steve Mnuchin, who was Treasury secretary in the Trump administration, has already attempted to make a bid, telling CNBC in March that it was putting together a group of investors. The Wall Street Journal also reported that former Activision Blizzard CEO Bobby Kotick was looking for potential buyer partners. While ByteDance, which owns other companies, is worth hundreds of billions of dollars, TikTok would bring in less than that, experts say, especially if sold without its powerful recommendation algorithm.
But Boltansky thinks ByteDance is unlikely to agree to any type of sale. The Chinese government has said so, saying it views the algorithm as a national security asset. And without it, TikTok becomes much less attractive to potential buyers.
So, will TikTok disappear in the United States?
It’s possible, but the final impact could be limited. The fact is that most TikTok users are already present on other platforms, so the impact on their livelihoods as they operate businesses on TikTok might be limited.
According to a survey by financial services group Wedbush, about 60% of TikTok users surveyed said they would simply migrate to Instagram (or Facebook) if there was a sale, while 19% said they would move to YouTube.
Analysts at financial services firm Bernstein came to similar estimates. In a note to clients, they predicted that Meta, which owns Instagram and Facebook, would take on up to 60% of TikTok’s U.S. ad revenue, while YouTube would earn 25%. Snapchat would also benefit, they said.
Why did lawmakers feel it necessary to take this drastic step?
Boltansky said many policy experts remain surprised the bill made it across the finish line. But a wave of concern about Chinese influence and the impact of social media on young people converged to pass this law.
“This is remarkable,” Boltansky said. “Everyone is so conditioned to DC doing nothing or the bare minimum to keep the lights on.”
As tensions with Beijing rise, lawmakers in Congress, as well as top law enforcement officials, have warned that TikTok is controlled by the Chinese Communist Party (CCP) and poses a national security threat for UNITED STATES.
“This clearly speaks to national security concerns,” FBI Director Christopher Wray said on Capitol Hill last year.
U.S. officials fear that the Chinese government is using TikTok to access and spy on its U.S. users’ data, spreading misinformation and conspiracy theories.
It felt like the TikTok ban moved slowly, then quickly. What happened?
The House passed its standalone TikTok bill in a large bipartisan vote in March. But the Senate appeared in no rush to pass the measure as Commerce Chair Maria Cantwell, D-Wash., drafted her own legislation.
That all changed when President Mike Johnson, R-La., working with the White House, introduced his $95 billion supplemental foreign aid plan last week, which included billions of dollars for Ukraine, Israel and Taiwan.
Included in this sweeping aid package: the House’s TikTok bill, with some minor changes. Johnson pushed the package into his chamber, then sent the House into recess, forcing the Senate to take it or leave it.
Rather than further delay crucial, long-stalled military and humanitarian aid, the Democratic-controlled Senate is moving to quickly pass the package — including the TikTok bill and other Johnson priorities.
News Source : www.nbcnews.com
Gn world
