[CC may contain inaccuracies] TikTok has a lot of reasons to fight, but also it's made it clear that it is not
going to be backing down quietly. Absolutely.
And this bill is looking like it's inevitable that it becomes law.
The Senate is meant to take up this bill as soon as tomorrow.
But certainly this week, President Joe Biden said he would sign it into law as
soon as it passes both chambers. So the fast track to reality is TikTok facing this divest or ban legislation is here
now. Bytedance, TikTok's Chinese parent
company, the company that the U.S.
government has taken issue with has also expected that it's going to fight this
tooth and nail through the U.S. legal system.
If this bill goes into law with the current language, Bytedance would have
nine months with a potential three month extension to divest the app.
But that seems to be an action that would be the case of last resort for
Bytedance who does intend to draw this out and wage a legal battle that could
last more than a year, according to people familiar with the matter.
Alex, what's the plan here? Is it to weather the storm and hope for
a better administration somewhere down the track?
And also, in terms of what's worse. Is it a ban or is it divestment?
Well, if you do the math here on that timeline that they would have let's say
it passes this week, then that would put us right around January, which is
inauguration time here in the US as it is a presidential election year.
So certainly we've seen TikTok in the past try to kind of lean into the idea
of patience and looking for a more amenable administration.
Donald Trump has changed his tune on Tick Tock, the man who was the first
president to try to ban the app by executive order is now saying that it
should, in fact, stay here in the U.S. So at the moment, if this bill does get
signed into law, which Bloomberg Intelligence puts it a 90% chance of
happening, then that might be their best recourse is wait for an administration
if Donald Trump gets voted in, who is either going to drag out enforcement or
might be a little bit more amenable while they do try to fight this on both
First Amendment arguments and otherwise in the American judicial system?
Ali says the risk of this has a domino effect as well.
I mean, are there. Could the US also be looking to ban
other Chinese tech platforms? I think a move, for instance, is sort of
seen as an Amazon competitor that's had a lot of success in the US comes to
mind. Yeah, and any kind of connection to
China has been one that has gotten intense scrutiny.
The way this legislation is written is about about basically social media
companies who are owned or majority owned by a foreign entity.
So that scrutiny around that Chinese ownership has come into play because
U.S. lawmakers are worried that because of
the regulations in China and how they can request data from companies in that
domicile, that there could be some kind of risk to Americans.
So there are certainly a number of companies, Tim, who is a great one that
comes to mind that might be concerned not only from what the precedent could
be set from this current legislation, but also certainly how other countries
might react to have America, who is the home to the biggest social media
companies that aren't tech talk now be saying, hey, look, this needs to be a
company that's not owned by one of our foreign adversaries and potentially a
company that owned by instead American investors.
Alex Batons also are fighting a battle on two fronts across the Atlantic.
There's trouble in the EU as well. What's going on there by staring down
the barrel of a fine, right? They are.
And it's not the first time. This is actually the second kind of
major moment. Tick Tock.
Lt was an app that was launched in both France and Spain within the EU bloc.
It rewards users through a point system and the EU regulator opened a new probe
on Monday into whether Bytedance violated its content law.
Because they're worried that this point system might have an addictive effect on
users, they have 24 hours to deliver a risk assessment.
So we should see potentially some news on this in the coming days.
But it's not the first time the EU has gotten involved.
The EU has previously announced an investigation under the Digital Services
Act around the app's addictive design around screen time limits, privacy
settings, age verification. So all that to say TikTok is waging
battles not just on the American front, but certainly in other domiciles where
there are either privacy legislation already in place or similar concerns
about its ownership and its connection to the Chinese government.