Update: President Biden has signed bill in to law. ByteDance has 9 months to sell or be banned.
The United States Senate has today passed significant legislation that could reshape the internet landscape in that country – particularly influencing the operations of the popular video-sharing app TikTok. The bill mandates that ByteDance, the Chinese parent company of TikTok, sell its stake in the app within a year or face a potential ban in the U.S. The potential forced sale stands to benefit the U.S. with potential buyers lining up.
The U.S. gov’t has presented its case under the guise that this addresses National Security concerns. Lawmakers from both parties of the US Senate have argued that they worry that the app could potentially allow the Chinese government to access personal data of millions of U.S. citizens and influence public discourse. However, these arguments are viewed by some around the world as an attempt by the U.S. to exert control over what has become the internet’s largest and most influential platform. Critics argue that beneath the guise of national security, there lies an intent to dominate a significant digital space. It seems like the Huawei ban all over again.
President Joe Biden has previously stated his support for the bill, indicating that he would sign it into law should it pass through Congress. Which means we’re now headed to a phase where it will be law and ByteDance will either bow out, or cave in. Recently, discussions on banning TikTok in Kenya, seemingly came to an end with the government opting for stronger moderation rules around content.
ByteDance has shown no inclination to sell TikTok to a U.S. company. Given the app’s massive global influence and financial success, it is understandable why the company would be hesitant to let go of such a valuable asset. This reluctance sets the stage for a potential scenario where the U.S. might have to enforce a ban on TikTok if the divestiture does not occur within the stipulated timeframe. Our guess is it won’t.
This legislative action highlights the profound impact that politics can have on business operations globally.
Should ByteDance decide to comply with the legislative requirements, potential buyers for TikTok could include major tech entities like Microsoft or Oracle, as well as various private equity groups. Their ownership of such a platform is viewed as a move that will totally change how the app works – globally. On the other hand, if TikTok were to be banned, other social media platforms such as Meta’s Instagram and Facebook, as well as Google with Youtube, stand to gain substantially.
Among the vocal opponents of the TikTok ban is Elon Musk, who expressed his disapproval on the platform X (formerly Twitter), arguing that such a move would be an impediment to free speech.
