ByteDance is on the edge of a crucial decision – divest TikTok or risk facing a ban in the U.S., according to a bipartisan House bill introduced on Tuesday.
The Legislation
Co-sponsored by Reps. Mike Gallagher (R-Wis.) and Raja Krishnamoorthi (D-Ill.), the bill titled “The Protecting Americans from Foreign Adversary Controlled Applications Act” targets TikTok specifically as a “foreign adversary controlled application.” In addition, a related measure called “The Protecting Americans’ Data from Foreign Adversaries Act of 2024” was proposed by the same House members.
Committee Action
House Energy and Commerce Committee Chair Cathy McMorris Rodgers (R.-Was) announced that the committee plans to discuss the proposals on Thursday, emphasizing the national security threat posed by foreign adversaries like China through applications such as TikTok.
Timeline and Consequences
If the bill is passed, ByteDance would have five months to divest TikTok, failing which it would be illegal to distribute TikTok through any U.S. app store or hosting platform.
TikTok’s Response
TikTok’s spokesperson Alex Haurek criticized the bill, labeling it as an “outright ban” disguised under other intentions. The company argues that such legislation would violate the First Amendment rights of millions of Americans and hinder small businesses that rely on the platform.
Previous Resistance and Market Response
ByteDance has previously resisted attempts to ban or force divestiture, with CEO Shou Zi Chew claiming independence from external influence. Meanwhile, rival Snap’s shares surged 2.5% amid speculations of a TikTok ban, offsetting a broader sell-off of tech stocks.
Leave a Reply