WASHINGTON: The US Senate on Tuesday passed legislation giving TikTok’s Chinese owner, ByteDance, about nine months to divest the US assets of the short-video app, or face a nationwide ban.
President Joe Biden was to sign the bill into law on Wednesday. Beijing has previously furiously denounced the plans to ban TikTok, urging Washington to “truly respect the principles of market economy and fair competition”.
“China will take all necessary measures to resolutely safeguard its legitimate rights and interests,” Commerce Ministry Spokesperson He Yadong said.
TikTok and Beijing-based ByteDance Ltd. have vowed to do all they can to stop the measure. They’ve argued it infringes the free-speech rights of the app’s 170 million monthly US users and plan to file suits to void the law or at least delay its enforcement.
“We’ll continue to fight,” Michael Beckerman, TikTok’s head of public policy for the Americas, said in a memo to US staff this past week. “This is the beginning, not the end of this long process.”
Biden’s signature will cap years of scrutiny in Washington.
With the legal battle set to unfold, TikTok’s US users face a wave of uncertainty about a place to express themselves via video, make money as influencers or sell wares on TikTok Shop. If implemented, a TiKTok ban would risk disrupting “a critical channel for engaging with younger audiences and building brand visibility,” said Damian Rollison, director of market insights at SOCi.
“TikTok’s unique format has allowed businesses to showcase products and services creatively, leveraging trends and user-generated content to connect with potential customers,” Rollison said.
TiKTok has invoked economic arguments against the law, saying content creators and merchants who make a living from posting videos and selling goods would be hurt financially. While many US lawmakers who backed the newly passed federal bill think it would survive court review, some rights groups say the First Amendment will be a more difficult hurdle to clear.
Here is what will likely happen next for TikTok;
TIKTOK CLOCK STARTS: Once Biden signs the bill, a 270-day clock starts during which ByteDance must sell TikTok. If it looks like ByteDance is close to divestment near the end of the nine-month period, the president can authorise an additional 90 days for any deal to be finalized. If the bill is signed into law this week, as expected, the 270-day period will end around the inauguration of the next president of the United States, on January 20, 2025, leaving the decision on an extra three months either to Biden, a Democrat, who is seeking reelection, or Republican front runner Donald Trump.
TIKTOK SUES: Once the bill is signed into law, TikTok is expected to sue to stop it. TikTok’s lawyers are also expected to ask the court for a preliminary injunction.
TikTok would want an injunction barring enforcement of the law to allow its full case challenging the constitutionality of the law to move ahead. It is unlikely that the court proceeding would be complete by year-end.
Last year TikTok took similar legal actions to stop a ban on the app in the state of Montana, where a preliminary injunction was granted. If that scenario is any guide for TikTok’s efforts against the United States, the company itself and TikTok users will file separate cases to thwart the US bill.
The bill sets the US Court of Appeals for the D.C. Circuit as the exclusive forum for any legal challenges.
HOW LONG WILL THIS ALL TAKE?: If TikTok successfully obtains a preliminary injunction from the court, the forced sale process is halted, potentially giving TikTok more time to operate freely in the US.
In August 2020, Trump, who was president at the time, sought to ban both TikTok and Chinese-owned WeChat, but was blocked by the courts. In June 2021, Biden withdrew a series of Trump-era executive orders that sought to ban new downloads of WeChat and TikTok.
WILL TIKTOK CHANGE AT ALL?: The TikTok app should not change for its 170 million US users between now and the end of the divestment period in the first four months of 2025.
WHAT DOES THE CHINESE GOVERNMENT SAY? China has a list of technologies that would need Chinese government approval before they are exported. Experts said TikTok’s recommendation algorithm would fall under the list.
