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Joe Biden signed a bill requiring TikTok’s Chinese owner to sell the social media app’s US operations or face a ban, after the Senate passed the legislation.
The law, part of a foreign aid package for Ukraine, Israel and Taiwan, sets the clock ticking for a possible ban on a platform that is hugely popular in the United States.
Here’s a guide to TikTok legislation and what may happen next.
How does legislation pave the way for a sale or ban?
The bill gives ByteDance, TikTok’s Beijing-based parent company, 270 days to sell the app’s U.S. operations. If ByteDance appears close to closing a deal as the deadline approaches, the president can authorize a 90-day extension.
The deadline comes around the time of the next president’s inauguration, on January 20, meaning that Donald Trump, if he wins the election, could decide whether to extend the sales process.
If ByteDance fails to make a sale, it will face a nationwide ban, blocking app stores and web servers from distributing TikTok.
Why is the United States threatening to ban TikTok?
US lawmakers and authorities are concerned that the Chinese state could access the data of TikTok’s 170 million American users under national security laws.
Christopher Wray, director of the FBI, the United States national security and intelligence agency, has said that ByteDance is “controlled by the Chinese government” and has warned that authorities in Beijing can influence people by manipulating the algorithm that selects what people watch on TikTok. in addition to allowing the government to collect user data for “traditional espionage operations.”
TikTok denies that the Chinese government has attempted to access American users’ data and says it would reject any such request. In an appearance before Congress last year, TikTok CEO Shou Zi Chew said: “Let me say this unequivocally: ByteDance is not an agent of China or any other country.”
Will TikTok appeal against the law?
TikTok has already stated that it will fight the bill in court as soon as it is signed, calling it a violation of the First Amendment of the US Constitution, which protects freedom of speech.
“The moment the bill is signed, we will go to court to file a legal challenge,” TikTok’s head of public policy for the Americas, Michael Beckerman, wrote in a memo to staff over the weekend.
He added: “We will continue to fight, as this legislation is a clear violation of the first amendment rights of the 170 million Americans on TikTok.”
Chew said in a video released shortly after Biden signed the bill on Wednesday that “we are not going anywhere,” adding that “the facts and the Constitution are on our side and we hope to prevail again.”
The first amendment stance already worked in TikTok’s favor after a Montana judge, who had banned the app, blocked the move because it violated users’ free speech rights.
The last time the United States tried to ban TikTok, in 2020, following an executive order issued by Trump, the company obtained a preliminary injunction against the measure after a Washington judge said a ban “could likely exceed” the limits of the law.
TikTok could seek an injunction again, before challenging the constitutionality of the bill in a full case.
Carl Tobias, a professor at the University of Richmond law school, believes the legal process will likely last two years “during which time the law would not prohibit enforcement.”
The US government is likely to argue in court that there are national security reasons for a ban.
David Greene, civil liberties director at the Electric Frontier Foundation, a digital rights group, said: “The government will have to demonstrate in court that the national security concern is real and not hypothetical or conjectural… and that an outright ban “TikTok as such what currently exists is the appropriate means to address that national security concern.”
Who might be interested in buying TikTok’s US operations?
Former US Treasury Secretary Steve Mnuchin said in March that he was forming a consortium to buy TikTok’s US assets, calling it a “big deal.”
If previous suitors are any indication of interest, Microsoft in 2020 explored a deal to buy TikTok, at the urging of Trump, who had also encouraged US technology company Oracle and retail corporation Walmart to take a big stake. ByteDance has several American investors, including investment firms General Atlantic, Susquehanna and Sequoia Capital.
However, analysts at Wedbush Securities, an American financial services firm, say they do not expect the Chinese government to sanction a sale that includes TikTok’s algorithm, the extremely effective technology that selects what people see on the app.
“TikTok’s value would change dramatically without the algorithms and makes the eventual sale/divestiture of TikTok a very complex undertaking with many potential strategic/financial bidders eagerly waiting for this process to begin,” Wedbush said in a note to investors, which valued its UK operations at $100bn (£80.3bn) with the algorithm, but between $30bn and $40bn without it.
What does the Chinese government think?
The Chinese government said last year that it would “firmly oppose” the sale of the app, adding that it would “seriously undermine the confidence of investors from various countries, including China, to invest in the United States.” China also has export rules that prohibit the sale of certain technologies.
Will other countries follow suit with a divestment or ban measure?
TikTok is already under pressure elsewhere in the West over shared concerns about data. It has been banned on government phones in the UK, US, Canada and New Zealand, and European Commission staff have also been banned from using it on work-issued devices.
There have been calls for a ban in the UK, including former Conservative Party leader Iain Duncan Smith, who said last month that “we should have done it ourselves”.
TikTok and dozens of other Chinese apps were banned in India in 2020 after the government said they were “harmful to the sovereignty and integrity of India, defense of India, state security and public order.”
