House Passes Bill to Force Divestment of TikTok by China's ByteDance

The U.S. House of Representatives passed a bill with a 352-65 vote, requiring China tech giant ByteDance to divest TikTok or face a ban in the U.S. The legislation, called the Protecting Americans from Foreign Adversary Controlled Applications Act, was introduced on March 5th and aims to address national security concerns.

Senate Uncertainty

The bill is now on its way to the Senate, where its future is uncertain due to divided opinions among senators. President Joe Biden has indicated his willingness to sign the bill if it passes, and the White House is providing technical support in its crafting.

Impact on TikTok

If enacted, the bill requires ByteDance to divest TikTok within approximately six months for the app to remain available in the U.S. App-store owners like Apple and Google, along with internet-hosting companies, would be prohibited from supporting TikTok and other ByteDance-linked apps.

Controversy and Opposition

TikTok has expressed its opposition to the bill, stating that it would violate the First Amendment rights of millions of Americans and negatively impact small businesses. Lawmakers have cited national security risks due to TikTok's alleged ties to the Chinese Communist Party, which TikTok's CEO has denied. Tech policy and civil liberties organizations have also opposed the bill over concerns about First Amendment rights.

Historical Context

This isn't the first time TikTok has faced potential bans in the U.S. Former President Donald Trump expressed concerns about the app and even tried to remove it from app stores in 2020. The Trump administration also called on ByteDance to divest the app. However, discussions with Microsoft for a potential acquisition fell through, and the Biden administration later revoked the order.

Financial Implications

If the bill passes, there are predictions that TikTok's U.S.-only business could potentially have a valuation exceeding $60 billion. However, it remains uncertain whether ByteDance would comply or cease operations in the U.S. in response to the legislation.