U.S. Senate approves legislation to ban TikTok or sell

The U.S. Senate has approved a legislation that would ban TikTok in the United States if its owner, the tech firm ByteDance, fails to divest the popular short video app over the next nine months to a year.

TikTok customers on smartphone
@Freepik

The development comes in the wake of the U.S. lawmakers feel that China could access Americans’ data or monitor them with the app. The bill was passed by the U.S. House of Representatives on Saturday and U.S. President Joe Biden has said he will sign it into law on Wednesday.

“For years we’ve allowed the Chinese Communist party to control one of the most popular apps in America that was dangerously shortsighted,” said Senator Marco Rubio, the top Republican on the Intelligence Committee. “A new law is going to require its Chinese owner to sell the app. This is a good move for America.”

Banning of TikTok, which is used by 170 million people in the United States, will impact the business of several video developers.

A ban on TikTok in the US could have significant business impacts, both for the company itself and for businesses that rely on TikTok as a marketing platform.

Here are some potential effects:

Loss of Revenue for TikTok: TikTok generates a significant portion of its revenue from users in the US. A ban would mean losing access to this lucrative market, resulting in a direct hit to its revenue streams.

Impact on User Base: With a ban, TikTok would lose millions of users in the US, which could result in a decrease in engagement and user-generated content. This could further affect the app’s attractiveness to advertisers.

Opportunity for Competitors: A ban on TikTok could create opportunities for competing platforms to gain market share. Platforms like Instagram, Snapchat, and YouTube might see increased usage as users look for alternatives.

Effect on Influencers and Businesses: Many influencers and businesses have built their brand and marketing strategies around TikTok. A ban would disrupt their reach and engagement with their audience, forcing them to adapt their strategies or migrate to other platforms.

Last week, Apple said Beijing ordered it to remove Meta Platforms’ WhatsApp and Threads from its App Store in China over Chinese national security concerns.

TikTok is set to challenge the bill on First Amendment grounds and TikTok users are also expected to again take legal action. A U.S. judge in Montana in November blocked a state ban on TikTok, citing free speech grounds.

The American Civil Liberties Union said banning or requiring divestiture of TikTok would “set an alarming global precedent for excessive government control over social media platforms. …If the United States now bans a foreign-owned platform, that will invite copycat measures by other countries.”

TikTok, which says it has not shared and would not share U.S. user data with the Chinese government, did not immediately comment but has told employees it would quickly go to court to try to block the legislation.

The Senate voted 79 to 18 in favor of the bill. The TikTok divestment directive won fast-track approval after being introduced just weeks ago, Reuters news report said.

In 2020, then-President Donald Trump was blocked by the courts in his bid to block TikTok and Chinese-owned WeChat, a unit of Tencent, in the United States.

However, the new legislation is likely to give the Biden administration a stronger legal footing to ban TikTok if ByteDance fails to divest the app, experts say.

If ByteDance failed to divest TikTok, app stores operated by Apple, Alphabet’s Google and others could not legally offer TikTok or provide web hosting services to ByteDance-controlled applications or TikTok’s website.

The bill would also give the White House new tools to ban or force the sale of other foreign-owned apps it deems to be security threats.

Once the bill is signed into law, ByteDance will have 270 days to divest TikTok’s U.S. operations with a possible three-month extension if there are signs a deal is progressing.