Legislation Approved by US House Potentially Banning TikTok Across the Country.
The US House of Representatives has approved a groundbreaking bill poised to potentially bar TikTok from operating in the United States.
Under the legislation, ByteDance, the Chinese parent company of the popular social media platform, would be required to divest its controlling interest within six months, failing which the app could face prohibition in the US.
Despite securing broad support across party lines, the bill must navigate the Senate and receive presidential approval to be enacted into law.
Concerns over China’s sway on TikTok have long troubled lawmakers.
ByteDance, the Chinese firm behind TikTok, was established in 2012.
The company, headquartered in Beijing but registered in the Cayman Islands, maintains offices throughout Europe and the United States.
Should the bill successfully navigate the Senate, President Joe Biden has pledged his swift endorsement, potentially sparking diplomatic tensions with China.
ByteDance would need clearance from Chinese authorities for a compelled divestiture, a move Beijing has adamantly opposed. Foreign Ministry spokesperson Wang Wenbin warned of potential repercussions, suggesting the action could backfire on the US.
Wisconsin Republican Mike Gallagher, a co-author of the bill, emphasized the imperative of preventing a scenario where a major American social media platform is controlled or owned by an entity tied to the Chinese Communist Party.
Chinese firms are bound by a national security statute mandating data sharing with the government upon request.
Several Democrats are also voicing opposition to a potential ban, concerned that it could estrange TikTok’s youthful user base at a time when the party is striving to maintain support among younger voters.
Presently, TikTok has experienced a substantial surge in its reach and advertising earnings. According to research firm Emarketer, TikTok is projected to generate approximately $8.66 billion in advertising revenue from the US this year, a significant increase from less than $1 billion in 2020.
Even if ByteDance manages to obtain authorization to divest its stake in TikTok, it remains uncertain whether any of its competitors possess the financial resources to pursue acquisition bids for the platform. Previously, the company has valued the app at approximately $268 billion, a figure that could potentially deter certain investors.
