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TikTok Ban; Why US Want ByteDance to Divest from TikTok

TikTok Ban - ByteDance

The battle over TikTok is the latest front in US-China competition and Washington’s attempts to thwart potential foreign influence campaigns. In the case of TikTok, US legislators fear that ByteDance could be secretly controlled by the Chinese Communist Party.

The company has denied the allegations that it shares sensitive user data with the Chinese government. “ByteDance is not owned or controlled by the Chinese government. It is a private company,” TikTok CEO Shou Chew said in a testimony before the Congress in March.

But Chinese regulators have a history of cracking down on domestic tech firms. Beijing is also well-known for censoring politically sensitive content and restricting users from accessing Western social media and sites with its “Great Firewall”.

Marco Rubio, the Republican vice chairman of the Senate Select Committee on Intelligence, expressed many of these fears this week when he said at an annual hearing on “worldwide threat assessments” that “every company in China is controlled by the Chinese Communist Party” – including ByteDance.

“They happen to control a company that owns one of the world’s best artificial intelligence algorithms. It’s the one that’s used in this country by TikTok, and it uses the data of Americans to basically read your mind and predict what videos you want to see,” he said.

Many US legislators and the White House believe that the sale of TikTok to a “qualified buyer” – likely a Western company –  would cut off Chinese influence.

The bill, however, does not stop there but opens up the same provisions for other “foreign adversary controlled” apps or “the operation of a content recommendation algorithm or an agreement with respect to data sharing”.

This could include other popular Chinese apps for apparel companies Temu and Shein, following in the footsteps of other apps like Grindr. In 2020, the Chinese owner of the popular gay dating app was forced to sell for $600m over national security concerns that app data could be used to blackmail Americans.

What does TikTok say?

TikTok has denied the charges levelled against it, although it hasn’t been very effective in convincing US legislators.

CEO Chew’s testimony before Congress last year was widely perceived to be “disastrous”, as he failed to assuage concerns about Chinese influence over the app.

The Chinese government owns 1 percent stake in ByteDance and controls one of three board members in the Beijing-based company.

Critics, though, say the hearing was unsuccessful in part due to grandstanding by legislators. One notable incident saw Chew, a Singaporean and military reservist, grilled on whether he supports the Chinese Communist Party in scenes reminiscent of the US “Red Scare” of the 1950s.

Will the bill become law?

US President Joe Biden has said he would support a TikTok divestment bill, although there is a rival version from Senate Democrats that is currently stuck in committee.

The Senate’s RESTRICT Act empowers the Department of Commerce to act directly to ban apps controlled by “foreign adversaries”, whereas the House “Protecting Americans from Foreign Adversary Controlled Applications Act” starts at the White House.

While the House version has pulled ahead for the moment, it still has to be approved by the Senate and then signed by President Biden before it can become law.

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This would be a challenging task in ordinary times, but 2024 is also an election year in the US when the presidency, the entire House of Representatives, and 34 of 100 Senate seats are up for grabs. It’s possible that progress may be delayed until after the November vote. ByteDance can also challenge any ban in US courts.

Senate Majority Leader Chuck Schumer, a Democrat, released a short statement after the passage of the bill in the House, saying that the Senate “will review the legislation when it comes over from the House”.

But support and opposition to the bill do not fall along straight party lines.

While a TikTok ban is supported by ranking Republican senators like Rubio, Senator Rand Paul, another Republican, has promised to block the bill, which he considers unconstitutional.

Senator Kevin Cramer, a Republican from the conservative state of North Dakota, also told US reporters not to hold their breath as the bill moves through the Senate.

“It’s hard for me to imagine that it’ll be real fast. We don’t do things fast. We’re designed not to do things fast, so I would think months,” he was quoted as saying by the US news broadcaster CBS News.

Former US President Donald Trump, the Republican candidate for president, has also changed his position on TikTok. His administration tried to ban the app in 2020, but switching sides four years later could earn him votes with younger voters in November.

The US federal government and several states have separately taken the initiative to restrict the use of TikTok. Montana last year became the first US state to ban the app outright, although a legal challenge is under way.

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Written by The County Info

Amos is an experienced SEO expert. He has an interest in finance, IT, business ideas, and investments. He has also contributed to many global web portals.