President Joe Biden signed an initiative on Wednesday that could force TikTok’s Chinese parent company to divest the video-sharing platform, further exacerbating already tense relations between Washington and Beijing.
The bill passed by the U.S. Senate on Tuesday is part of a $95 billion security package consisting primarily of funds for Ukraine, Israel and Taiwan.
There are also plans to ban TikTok from app stores unless the platform is sold by its Beijing-based owner ByteDance, sparking a debate over free speech and data security.
Lawmakers’ overwhelming support for the measure signals widespread agreement in Washington that TikTok poses a threat to U.S. national security as long as it is owned by ByteDance.
TikTok has promised to take legal action to block the legislation.
Here’s what the law means for TikTok and its 170 million users in the US.
How would a ban work?
A ban will take effect in 270 days unless ByteDance sells TikTok to a non-Chinese company. In the USA, web access would be blocked.
The law would work by imposing civil penalties on app stores such as Apple’s App Store and Google Play if they distribute or update TikTok. Internet service providers would be forced to block access to TikTok on the Internet.
Although app stores and Internet providers would be prohibited from hosting TikTok, there would be no legal consequences for individual users.
A nationwide ban on an app or website is largely new territory for the U.S. — although there have been some precedents in recent years at both the state and federal levels.
The state of Montana passed a law last year banning TikTok, which also forces its removal from app stores accessible within the state. However, the bill was blocked by a federal judge in November before it was set to take effect on January 1st. Montana is appealing the decision.
The American government and many individual states have separately banned TikTok on state-owned devices to ensure the security of US data from China. Canada and political institutions in the EU have issued similar guidelines.
What would a ban mean for users?
The TikTok app has already been downloaded on millions of phones in the US – the largest market worldwide – and would not disappear from those phones even if the ban takes effect. However, existing users would not be able to update or re-download the app if they wanted to delete it or install it on a new phone.
Blocking access to updates would make the app obsolete over time, but users wouldn’t stop using it overnight. TikTok could also remain accessible to users who circumvent the law and use virtual private networks that encrypt internet traffic and hide IP addresses.
A U.S. ban would have a huge impact on TikTok’s booming e-commerce market for big brands and small businesses. It has become the biggest player in the rise of so-called social commerce, in which algorithms offer products highly tailored to individual consumers’ interests, and in “shoppertainment,” in which advertising is seamlessly integrated into entertainment content.
TikTok says it is used by more than 7 million small businesses in the US. It has higher engagement rates than other social media platforms, meaning it offers brands a greater chance of viral success as well as access to more than 1 billion active monthly users worldwide. A ban could be a good thing for direct competitors to TikTok’s social commerce dominance, such as Instagram Shopping and Amazon Inspire, which launched in 2022.
It could also benefit other social media platforms as users turn to alternative apps in search of similar experiences. TikTok has become a major source of news in the US, with a third of adults under 30 saying they get their news from the platform, according to Pew Research.
Is TikTok really a national security risk?
The Chinese government exercises significant control over companies operating within its jurisdiction, including forcing them to hand over any data relevant to national security. This raises the possibility that TikTok may be used by China to gather foreign intelligence information, although there is no evidence that TikTok’s commercial user data was used in this way.
As part of a plan to avoid a divestiture, TikTok has spent more than $1.5 billion over the past three years working on “Project Texas,” a corporate restructuring plan to acquire U.S. user data and content through a partnership with American Cloud -Protecting software from Chinese influence group Oracle. The standalone unit that voluntarily seals off American data is operational but has failed to convince U.S. lawmakers that the app is safe.
TikTok collects large amounts of personal information from its US users to publish targeted content and ads. Cyber security experts have cited TikTok’s ability to track users’ locations, contact lists, personal information and IP addresses, as well as a clause in its privacy policy that allows it to collect biometric data including “facial and voice prints.” identifies potential risks to privacy and beyond national security. However, several privacy researchers have concluded that TikTok does not collect more data than other popular social networks.
TikTok CEO Shou Zi Chew said that the Chinese government has never asked TikTok for its data and that it would reject such a request. However, he acknowledged that ByteDance employees based in China may have access to some U.S. data through the app.
There are also concerns that by being able to access TikTok’s algorithms, Beijing could influence what users see on the platform, including the spread of disinformation and propaganda, which would be a particularly important issue in the US election year.
What can TikTok do to stop a ban?
Shortly after Biden signed the law on Wednesday, TikTok released a statement saying it would take legal action against what it called an “unconstitutional law.” Such an action must be filed within 165 days of the bill’s enactment.
The company sued the U.S. government in 2020 when then-President Donald Trump issued an executive order to block the app’s operation in the country, giving ByteDance 90 days to divest itself of its American assets and any data TikTok held in it had collected in the USA. A judge blocked it hours before it took effect, and Biden repealed Trump’s order when he took office.
The most obvious way for TikTok to avoid a ban is through a sale that separates the app and its U.S. user data from its Chinese parent company. However, this is unlikely. In 2020, China updated its export control rules, effectively giving Beijing a say in any deal that sells Chinese technology to an American buyer. Last year, China’s Ministry of Commerce said it would “strongly oppose” a forced sale of TikTok.
Chew has proposed several alternative measures to a sale to address U.S. national security concerns, including the Project Texas plan and a possible American listing of TikTok.