Featured Article

TikTok ban signed into law by President Biden: How we got here, and what comes next

The TikTok ban has cleared Congress and received White House approval, putting new pressure on Bytedance to divest.

Comment

TikTok logo encircled by a "prohibited" symbol
Image Credits: TechCrunch

TikTok faces an uncertain fate in the U.S. once again. A bill including a deadline for TikTok parent company Bytedance to divest within nine months or face a ban on app stores to distribute the app in the U.S., was signed by President Joe Biden on Wednesday as part of broader legislation including military aid for Israel and Ukraine. The White House’s approval comes swiftly after strong bipartisan approval in the House and a 79-18 Senate vote Tuesday in favor of moving the bill forward.

TikTok is based in Los Angeles and Singapore but is owned by Chinese tech giant ByteDance. That relationship has raised eyebrows among U.S. officials, who warn that the app could be leveraged to further the interests of an adversary. The bill’s critics argue that the U.S. is unfairly targeting a well-loved social network when the government could be dealing with household issues that directly benefit Americans.

What happened in the Senate?

Senate Majority Leader Chuck Schumer, who has the power to set the chamber’s priorities and round up Democrats for a unified vote, initially said that the Senate “will review the legislation when it comes over from the House.”

The Senate at first seemed far from presenting a united front against TikTok. Some Republican China hawks like Sens. Josh Hawley and Marsha Blackburn were pushing their chamber of Congress to take up the bill. On the Democratic side, Senate Intelligence Committee Chairman Mark Warner issued a joint statement with his Republican committee counterpart, Marco Rubio, in support of a forced sale or ban for TikTok.

“We are united in our concern about the national security threat posed by TikTok — a platform with enormous power to influence and divide Americans whose parent company ByteDance remains legally required to do the bidding of the Chinese Communist Party,” Warner and Rubio said in an emailed statement. Their Senate committee, which is frequently briefed on national security matters, is particularly relevant given the nature of the concerns expressed by TikTok’s critics in Congress.

Late Tuesday, the Senate approved the $95 billion aid package — including aid for Taiwan and humanitarian aid for Gaza — that also contained the much-debated TikTok ban.

What happened in the House?

In March, the House Energy and Commerce Committee introduced a new bill designed to pressure ByteDance into selling TikTok. The bill marked a fresh push by the U.S. government to separate the company from its Chinese ownership or force it out of the country.

The bill, known as the Protecting Americans from Foreign Adversary Controlled Applications Act, would make it illegal for software with ties to U.S. adversaries to be distributed by U.S. app stores or supported by U.S. web hosts. Within the bill’s definitions, ownership by an entity based in an adversary country, like ByteDance in China, counts.

In language of the bill, which goes on to name TikTok explicitly, “it shall be unlawful for an entity to distribute, maintain, or update (or enable the distribution, maintenance, or updating of) a foreign adversary controlled application.” If the bill became law, Apple’s App Store and Google Play could not legally distribute the app in the U.S.

The bill, which many of its detractors reasonably describe as a “ban,” would force ByteDance to sell TikTok within 270 days — roughly nine months — in order for the app to continue operating here. There can also be a 90-day extension given to the company if “significant progress” is being made to sell. It also empowers the president to have oversight of this process to ensure that it results in the company in question “no longer being controlled by a foreign adversary.”

After getting wind of the bill’s swift and sudden progress in Congress, TikTok pushed back with a mass in-app message to U.S. users, complete with a button for calling their representatives.

“Speak up now — before your government strips 170 million Americans of their Constitutional right to free expression,” the message read. “Let Congress know what TikTok means to you and tell them to vote NO.”

In spite of TikTok’s decision to rile up its users — or perhaps because of it — the bill to force ByteDance to sell TikTok passed through the House Energy and Commerce Committee with a 50-0 vote. The fast-tracked bill passed a full vote in the House on March 13.

Prior to the vote, subcommittee members had a classified briefing with the FBI, the Justice Department and Office of the Director of National Intelligence at the behest of the Biden administration, Punchbowl News reported.

President Biden also explicitly said that he would sign the bill if it reaches his desk. “If they pass it, I’ll sign it,” Biden told a group of reporters. And Biden followed through with that statement in signing the bill Wednesday.

Why does the U.S. say TikTok is a threat?

To be clear, there is currently no public evidence that China has ever tapped into TikTok’s stores of data on Americans or otherwise compromised the app.

Still, that fact hasn’t stopped the U.S. government from highlighting the possibility that China could if it wanted to. The Chinese government hasn’t been shy about going hands-on with companies in the country or keeping critics from its business community in line.

FBI director Chris Wray once cautioned that users might not see “outward signs” if China were ever to meddle with TikTok. “Something that’s very sacred in our country — the difference between the private sector and the public sector — that’s a line that is nonexistent in the way the CCP operates,” Wray said in a Senate hearing last year.

TikTok has vehemently denied these accusations. “Let me state this unequivocally: ByteDance is not an agent of China or any other country,” TikTok CEO Shou Zi Chew said last year during a separate hearing with the House Energy and Commerce Committee.

To TikTok’s credit, if China wanted to get its hands on information about U.S. users, Beijing could easily turn to data brokers who openly sell troves of user data around the globe with little oversight.

Because the U.S. has not produced any public evidence to back up its serious claims, there’s a major disconnect between how politicians feel about TikTok and how most Americans do. For many TikTok users, the U.S. crackdown is just one more way that politicians are out of touch with young people and don’t understand how they use the internet. For them — and other skeptics of the U.S. government’s claims — the situation looks like pure political posturing between two countries with bad blood, sometimes with a dash of racism.

The US government ramps up its pressure campaign against TikTok

Where did this idea come from?

The campaign to force ByteDance to sell TikTok to a U.S. company originated with an executive order during the Trump administration. Trump’s threats against the company culminated in a plan to force TikTok to sell its U.S. operations to Oracle in late 2020. In the process, TikTok rejected an acquisition offer from Microsoft but ultimately didn’t sell to Oracle, either, in spite of Trump’s efforts to steer the acquisition to benefit close ally and Republican mega donor Larry Ellison.

The executive action ultimately fizzled in 2021 after Biden took office. But last year, the Biden administration picked up the baton, escalating a pressure campaign against the app along with Congress. Now that campaign looks to be back on track.

Oddly, former President Donald Trump, who himself initiated the idea of a forced TikTok sale four years ago, is no longer in support of a TikTok crackdown. Trump explained his abrupt about-face on TikTok by highlighting the benefit a ban or forced sale could have on Meta, which suspended the former president’s account over his role in inciting violence on January 6.

“Without TikTok, you can make Facebook bigger, and I consider Facebook to be an enemy of the people,” Trump told CNBC. Trump’s tune on TikTok may have changed following a recent meeting with billionaire Republican donor Jeffrey Yass, who owns a 15% stake in TikTok’s Chinese parent company ByteDance.

What’s TikTok’s response to the potential ban?

There is some strong bipartisan congressional support for regulating TikTok, but things are still pretty complex. The most obvious complication: TikTok is enormously popular and we’re in an election year. TikTok has 170 million users in the U.S. and they aren’t likely to quietly watch as Congress effectively bans their favorite source of entertainment and information.

TikTok’s creators and their followers likely won’t go quietly. TikTok accounts with millions of followers have a built-in platform for organizing against the threat to the app that connects them to their communities and facilitates brand deals and advertising income.

TikTok itself would also surely mount a strong legal challenge against the forced sale, much as it did when the Trump administration previously tried to accomplish the same thing through executive action. TikTok also sued when Montana attempted to enact its own ban at the state level, which ultimately resulted in a federal judge issuing an injunction and blocking the effort as unconstitutional.

“This legislation has a predetermined outcome: a total ban of TikTok in the United States,” TikTok spokesperson Alex Haurek told TechCrunch in an emailed statement. “The government is attempting to strip 170 million Americans of their Constitutional right to free expression,” Haurek said, foreshadowing the massive public outcry that could result.

The cultural reach of TikTok is so great that Biden is campaigning on TikTok, even as the White House calls the app a national security threat.

Even though the White House has now signed off on the legislation, the U.S. scheme to force ByteDance to sell TikTok could still fail — an outcome that may or may not result in a ban. China has previously stated that it would oppose a forced sale of TikTok, which is well within the Chinese government’s rights following an update to the country’s export rules in late 2020.

Beyond Congress and the courts, TikTok holds a direct line to a massive chunk of the American electorate and a fleet of creators who command many millions of loyal followers. Those levers of power shouldn’t be underestimated in the fight to come.

Still, it’s difficult for TikTok to more effectively organize these millions. Though the X platform, when it operated as Twitter, was highly efficient as a mechanism to share breaking news, TikTok’s algorithms make it less effective as a means of understanding what is happening minute by minute. Though TikTok users say it has become a source of news — among adults, those ages 18 to 29 are most likely to say they receive their news regularly on TikTok — that information tends to be highly targeted and asynchronous. While many users may know something is brewing in Washington, it’s likely they are less aware of the steps required to fight it, making it harder for TikTok to mobilize them.

This post was originally posted March 13, and has been updated as the legislation moves forward.

More TechCrunch

Welcome back to TechCrunch’s Week in Review. This week had two major events from OpenAI and Google. OpenAI’s spring update event saw the reveal of its new model, GPT-4o, which…

OpenAI and Google lay out their competing AI visions

Expedia says Rathi Murthy and Sreenivas Rachamadugu, respectively its CTO and senior vice president of core services product & engineering, are no longer employed at the travel booking company. In…

Expedia says two execs dismissed after ‘violation of company policy’

When Jeffrey Wang posted to X asking if anyone wanted to go in on an order of fancy-but-affordable office nap pods, he didn’t expect the post to go viral.

With AI startups booming, nap pods and Silicon Valley hustle culture are back

OpenAI’s Superalignment team, responsible for developing ways to govern and steer “superintelligent” AI systems, was promised 20% of the company’s compute resources, according to a person from that team. But…

OpenAI created a team to control ‘superintelligent’ AI — then let it wither, source says

A new crop of early-stage startups — along with some recent VC investments — illustrates a niche emerging in the autonomous vehicle technology sector. Unlike the companies bringing robotaxis to…

VCs and the military are fueling self-driving startups that don’t need roads

When the founders of Sagetap, Sahil Khanna and Kevin Hughes, started working at early-stage enterprise software startups, they were surprised to find that the companies they worked at were trying…

Deal Dive: Sagetap looks to bring enterprise software sales into the 21st century

Keeping up with an industry as fast-moving as AI is a tall order. So until an AI can do it for you, here’s a handy roundup of recent stories in the world…

This Week in AI: OpenAI moves away from safety

After Apple loosened its App Store guidelines to permit game emulators, the retro game emulator Delta — an app 10 years in the making — hit the top of the…

Adobe comes after indie game emulator Delta for copying its logo

Meta is once again taking on its competitors by developing a feature that borrows concepts from others — in this case, BeReal and Snapchat. The company is developing a feature…

Meta’s latest experiment borrows from BeReal’s and Snapchat’s core ideas

Welcome to Startups Weekly! We’ve been drowning in AI news this week, with Google’s I/O setting the pace. And Elon Musk rages against the machine.

Startups Weekly: It’s the dawning of the age of AI — plus,  Musk is raging against the machine

IndieBio’s Bay Area incubator is about to debut its 15th cohort of biotech startups. We took special note of a few, which were making some major, bordering on ludicrous, claims…

IndieBio’s SF incubator lineup is making some wild biotech promises

YouTube TV has announced that its multiview feature for watching four streams at once is now available on Android phones and tablets. The Android launch comes two months after YouTube…

YouTube TV’s ‘multiview’ feature is now available on Android phones and tablets

Featured Article

Two Santa Cruz students uncover security bug that could let millions do their laundry for free

CSC ServiceWorks provides laundry machines to thousands of residential homes and universities, but the company ignored requests to fix a security bug.

2 days ago
Two Santa Cruz students uncover security bug that could let millions do their laundry for free

TechCrunch Disrupt 2024 is just around the corner, and the buzz is palpable. But what if we told you there’s a chance for you to not just attend, but also…

Harness the TechCrunch Effect: Host a Side Event at Disrupt 2024

Decks are all about telling a compelling story and Goodcarbon does a good job on that front. But there’s important information missing too.

Pitch Deck Teardown: Goodcarbon’s $5.5M seed deck

Slack is making it difficult for its customers if they want the company to stop using its data for model training.

Slack under attack over sneaky AI training policy

A Texas-based company that provides health insurance and benefit plans disclosed a data breach affecting almost 2.5 million people, some of whom had their Social Security number stolen. WebTPA said…

Healthcare company WebTPA discloses breach affecting 2.5 million people

Featured Article

Microsoft dodges UK antitrust scrutiny over its Mistral AI stake

Microsoft won’t be facing antitrust scrutiny in the U.K. over its recent investment into French AI startup Mistral AI.

2 days ago
Microsoft dodges UK antitrust scrutiny over its Mistral AI stake

Ember has partnered with HSBC in the U.K. so that the bank’s business customers can access Ember’s services from their online accounts.

Embedded finance is still trendy as accounting automation startup Ember partners with HSBC UK

Kudos uses AI to figure out consumer spending habits so it can then provide more personalized financial advice, like maximizing rewards and utilizing credit effectively.

Kudos lands $10M for an AI smart wallet that picks the best credit card for purchases

The EU’s warning comes after Microsoft failed to respond to a legally binding request for information that focused on its generative AI tools.

EU warns Microsoft it could be fined billions over missing GenAI risk info

The prospects for troubled banking-as-a-service startup Synapse have gone from bad to worse this week after a United States Trustee filed an emergency motion on Wednesday.  The trustee is asking…

A US Trustee wants troubled fintech Synapse to be liquidated via Chapter 7 bankruptcy, cites ‘gross mismanagement’

U.K.-based Seraphim Space is spinning up its 13th accelerator program, with nine participating companies working on a range of tech from propulsion to in-space manufacturing and space situational awareness. The…

Seraphim’s latest space accelerator welcomes nine companies

OpenAI has reached a deal with Reddit to use the social news site’s data for training AI models. In a blog post on OpenAI’s press relations site, the company said…

OpenAI inks deal to train AI on Reddit data

X users will now be able to discover posts from new Communities that are trending directly from an Explore tab within the section.

X pushes more users to Communities

For Mark Zuckerberg’s 40th birthday, his wife got him a photoshoot. Zuckerberg gives the camera a sly smile as he sits amid a carefully crafted re-creation of his childhood bedroom.…

Mark Zuckerberg’s makeover: Midlife crisis or carefully crafted rebrand?

Strava announced a slew of features, including AI to weed out leaderboard cheats, a new ‘family’ subscription plan, dark mode and more.

Strava taps AI to weed out leaderboard cheats, unveils ‘family’ plan, dark mode and more

We all fall down sometimes. Astronauts are no exception. You need to be in peak physical condition for space travel, but bulky space suits and lower gravity levels can be…

Astronauts fall over. Robotic limbs can help them back up.

Microsoft will launch its custom Cobalt 100 chips to customers as a public preview at its Build conference next week, TechCrunch has learned. In an analyst briefing ahead of Build,…

Microsoft’s custom Cobalt chips will come to Azure next week

What a wild week for transportation news! It was a smorgasbord of news that seemed to touch every sector and theme in transportation.

Tesla keeps cutting jobs and the feds probe Waymo