Towards a buyout or a ban? The American Congress adopted a law on Tuesday April 23 that forces the Chinese company ByteDance to sell its flagship social network, TikTok, otherwise the video application will be banned on American territory. Voted at the same time as a legislative package devoted to aid to Ukraine, Israel and Taiwan, the text is the most concrete threat weighing on the Chinese platform in the United States since the decree of ban passed by former President Donald Trump in 2020, and scrapped a year later.
The United States has been trying to get rid of TikTok for four years. The Chinese application, owned by the company ByteDance, is considered by many American politicians as a threat to users in the country. FBI Director Christopher Wray, for example, judged on Tuesday, in an interview with NBC, that the application constituted “a problem for national security”. At issue: the supposed ability that the Chinese government would have, through it, to spy on American citizens or to influence their opinions.
The American authorities have so far provided little concrete evidence to support their accusations. In December 2020, however, ByteDance admitted that some of its employees had been able to track journalists using data from the application.
All that remains for the text adopted on Tuesday is to be signed by President Joe Biden, who has pledged to do so quickly. ByteDance will then have 270 days (around nine months) to sell TikTok to a non-Chinese player, with a possible additional period of 90 days in the event of “significant progress”, specifies the Washington Post.
The deadline therefore now arrives after the American presidential election on November 5 (in its previous version, the text provided for a shorter deadline of 180 days). After this period, if no buyer has been found, then the application will be prohibited on American territory.
For the moment, there does not appear to be an obvious candidate for the acquisition of the video application, whose value should exceed 100 billion dollars (almost 93.6 billion euros), according to the Wall Street Journal. Several well-known names in the business world have expressed their interest, including Steve Mnuchin, Donald Trump’s former Treasury Secretary, who announced that he was setting up a consortium of investors for this purpose. Activision CEO Bobby Kotick has also approached wealthy investors for a similar purpose, according to reports from the Wall Street Journal. But no firm offer has yet been made public.
The price of a possible sale also depends on the Chinese government: Chinese law very strictly regulates the export of technology, and in particular algorithms. Beijing may decide that the sale of TikTok will not include the social network’s recommendation algorithms, which would greatly diminish its interest and value.
ByteDance has already announced that it will challenge the law in American courts. “We will continue to fight,” wrote Michael Beckerman, director of public policy for TikTok in the United States, in an internal memorandum consulted by the American press. “This is the start of a long process, it’s not the end. »
A first appeal focusing on how the law potentially violates the freedom of expression of American users of the application seems more than likely. According to most experts, it would have a reasonable chance of success. In November, a law banning TikTok in the state of Montana was blocked by a federal court, which found that the text was likely contrary to the First Amendment of the American Constitution, which protects freedom of expression.
Technically, ByteDance could also choose to simply close access to its application to American users; it would then lose its largest market, with 170 million users.
The text of the law concerns all applications published by ByteDance, including the very popular video editing application CapCut and another less popular social network, Lemon8. But its very broad formulations concern, in theory, most applications controlled by an entity operating from “a country adversary of the United States”.
According to Axios, the designers of the text assured that online sales applications like Temu or Shein would not be affected, but the law adopted broad and imprecise wording. For example, it excludes from its scope “applications whose primary purpose is the publication of comments on products”. A notion subject to interpretation.
TikTok has claimed for years that it has no connection with the Chinese Communist Party and ensures that it has taken all measures to ensure the security and protect the privacy of its American users. Its managers regularly remind that the application is different from the one available in China, Douyin, that it respects American laws and applies specific moderation rules. Above all, the company certifies that all of its American users’ data is stored in the United States and inaccessible to Chinese authorities: the company has built gigantic dedicated data centers across the Atlantic, a significant part of what it calls the “Texas Project.”
In a message to his users published in mid-March, Shou Chew, the CEO of TikTok, also estimated that one of the unstated goals of the text was to strengthen “a handful of other social networks” – an allusion in particular to Meta (Instagram, Facebook and Threads).
The Chinese Foreign Ministry has repeatedly denounced the “double standards” of the anti-TikTok bill. In a long statement published in March, the Chinese government denounced a “lack of freedom of expression” in the United States and accused Washington of being one of the main disseminators of propaganda and disinformation in the world. China bans all major American social networks on its territory, including Instagram, Facebook and X (Twitter).
