Congressional crackdown on TikTok raises logistical and legal questions
There’s been plenty of social media fallout and pushback after the House of Representatives voted on Wednesday to crack down on the video-sharing app TikTok. That’s over allegations that TikTok’s China-based parent company, ByteDance, could use the app’s data and market access to threaten U.S. national security and users’ privacy.
The House bill — passed with overwhelming bipartisan support — would force ByteDance to divest, to sell off TikTok, or see TikTok banned from U.S. app stores and web-hosting platforms. But could such a divestiture happen? And would TikTok still be TikTok?
It’s not a new idea for the federal government to try and block foreign ownership of companies with sensitive technology, per Mark Ostrau at Silicon Valley law firm Fenwick and West.
“So the government can force divestitures. Many years ago they did it with Grindr,” he said.
Grindr is a gay dating app that its Chinese owner had to sell off because of all the personal data it held on American users. But for ByteDance to sell or spin off the U.S. part of TikTok — a huge, profitable, globally-integrated social media app — is way more complicated.
“Whether there’s a buyer and a path forward for a sale is hard to say,” Ostrau said. “Even if there is an acquirer, is there a way to have TikTok as people know it, with the same technology and the same processes?”
China and TikTok can be expected to fight divestiture tooth and nail, according to Martin Chorzempa at the Peterson Institute for International Economics.
“China doesn’t want one of its first successful internet companies abroad to sell, in effect, its secrets to some buyer,” he said.
The Senate still has to act. If it passes, expect the lawsuits to begin.