Joe Biden has signed into law a bill that requires TikTok’s Chinese owner to sell the social media app’s US operations or face a ban, after the Senate passed the legislation.
The law, part of a foreign aid package for Ukraine, Israel and Taiwan, sets the clock ticking on a potential ban for a platform that is hugely popular in the US.
Here is a guide to the TikTok legislation and what may happen next.
How does the legislation pave the way for a sale or ban?
The bill gives TikTok’s Beijing-based parent, ByteDance, 270 days to sell the app’s US operations. If ByteDance appears close to completing a deal as the deadline looms, the president can authorise a 90-day extension.
The deadline arrives at about the time the next president is inaugurated, on 20 January, which means Donald Trump, if he wins the election, could decide whether the sale process is extended.
If ByteDance fails to carry out a sale, then it will face a nationwide ban, by the blocking of app stores and web hosts from distributing TikTok.
Why is the US threatening to ban TikTok?
US lawmakers and authorities are concerned that data from TikTok’s 170 million US users could be accessed by the Chinese state under national security laws.
Christopher Wray, the director of the FBI, the US domestic intelligence and security agency, has said that ByteDance is “controlled by the Chinese government” and has warned that Beijing authorities can influence people by manipulating the algorithm that curates what people view on TikTok, as well as allowing the government to collect user data for “traditional espionage operations”.
TikTok denies that the Chinese government has attempted to access US user data and says it would reject any such request. In an appearance before Congress last year, TikTok’s chief executive, Shou Zi Chew, said: “Let me state this unequivocally: ByteDance is not an agent of China or any other country.”
Will TikTok appeal against the law?
TikTok has already declared that it will fight the bill in the courts as soon as it is signed, labelling it a breach of the US constitution’s first amendment, which protects free speech.
“At the stage that the bill is signed, we will move to the courts for a legal challenge,” wrote TikTok’s head of public policy for the Americas, Michael Beckerman, in a memo to staff at the weekend.
He added: “We’ll continue to fight, as this legislation is a clear violation of the first amendment rights of the 170 million Americans on TikTok.”
Chew said in a video posted soon after Biden signed the bill on Wednesday that “we aren’t going anywhere”, adding that “the facts and the constitution are on our side and we expect to prevail again”.
The first amendment stance has already worked in TikTok’s favour after a judge in Montana, which had banned the app, blocked the move because it violated users’ free speech rights.
The last time the US tried to ban TikTok, in 2020 after an executive order issued by Trump, the company secured a preliminary injunction against the move after a judge in Washington said a prohibition may “likely exceed” the bounds of the law.
TikTok could pursue an injunction again, before challenging the constitutionality of the bill in a full case.
Carl Tobias, a professor at the University of Richmond law school, believes the legal process will probably take two years “during which time the law would not ban the app”.
The US government is likely to argue in court that there are national security grounds for a ban.
David Greene, civil liberties director at the Electric Frontier Foundation, a digital rights group, said: “The government will have to demonstrate to the court that the national security concern is real and not hypothetical or conjectural … and that a total ban on TikTok as it currently exists is the appropriately tailored means of addressing that national security concern.”
Who might be interested in buying TikTok’s US operations?
The former US treasury secretary, Steve Mnuchin, said in March he was putting together a consortium to buy TikTok’s US assets, calling it a “great business”.
If past suitors are any indication of interest, in 2020 Microsoft explored a deal to buy TikTok, at the behest of Trump, who had also encouraged the US tech firm Oracle and the retail corporation Walmart to take a large stake. ByteDance has a number of US investors, including the investment firms General Atlantic, Susquehanna and Sequoia Capital.
However, analysts at Wedbush Securities, a US financial services firm, say they do not expect the Chinese government to sanction a sale that includes TikTok’s algorithm, the extremely effective technology that curates what people see on the app.
“The value of TikTok would dramatically change without the algorithms and makes the ultimate sale/divestiture of TikTok a very complex endeavour with many potential strategic/financial bidders waiting anxiously for this process to kick off,” Wedbush said in a note to investors, which valued its UK operations at $100bn (£80.3bn) with the algorithm but between $30bn and $40bn without.
What does the Chinese government think?
The Chinese government said last year it would “firmly oppose” the sale of the app, adding it would “seriously undermine the confidence of investors from various countries, including China, to invest in the United States”. China also has export rules that prohibit the sale of certain technologies.
Will other countries follow suit with a divest-or-ban move?
TikTok is already under pressure elsewhere in the west because of shared concerns over data. It has been banned from government-issued phones in the UK, the US, Canada and New Zealand – and staff at the European Commission have also been banned from using it on work-issued devices.
Calls for a UK ban have been voiced, including by the former Conservative party leader Iain Duncan Smith, who said last month “we should have done it ourselves”.
TikTok and dozens of other Chinese apps were banned in India in 2020 after the government said they were “prejudicial to sovereignty and integrity of India, defence of India, security of state and public order”.
