The United States is giving ByteDance, the Chinese owner of TikTok, a stark choice — divest the popular video app within 270 days or face an outright ban in the US. The measure, which President Joe Biden signed into law on Tuesday, escalates the pressure on TikTok over fears that user data could be exploited and the platform used for Chinese propaganda and disinformation.
The push to force a sale or prohibit TikTok gained momentum rapidly, driven by concerns that stretch beyond typical data privacy issues with social media companies. A report found the app broadly suppresses content related to topics censored in China like the Uyghur genocide, Hong Kong protests, and Tibetan independence. Conversely, hashtags promoting divisive narratives against India — with whom China has border tensions — proliferated.
The Wall Street Journal‘s analysis of Gaza war content also revealed an anti-Israel slant consistent with China’s backing of Hamas. A lawsuit by a former ByteDance executive claimed a unit within the company monitored TikTok to “advance core Communist values.”
“You’re placing control of what information America’s youth gets in the hands of our foremost adversary,” warned Rep. Mike Gallagher. TikTok’s denials of Chinese meddling and pledges of independence from ByteDance rang hollow for lawmakers and officials.
“This is a tool that is ultimately within the control of the Chinese government,” FBI Director Christopher Wray told Congress, referring to TikTok’s ownership by a Chinese company beholden to the Communist Party’s directives.
While TikTok denies being influenced by Beijing, the lack of transparency around its algorithms and content moderation fueled distrust. The company’s defense boiled down to, as the New York Times’ David Leonhardt succinctly put, “trust us” — an unconvincing proposition given the stakes, critics argued. Fears that TikTok could manipulate what hundreds of millions of young Americans view cemented the view that Chinese ownership posed an unprecedented threat.
The coming battle is unlikely to be resolved quickly. TikTok plans to challenge the law in court on free speech grounds, potentially setting up a protracted legal fight. However, the precedent of restricting foreign control over media platforms undermines TikTok’s case.
If TikTok is forced to accept a sale — they have already said that they will not — finding an acceptable buyer will be hugely complex and expensive, with estimates the US operations alone could fetch tens of billions. Tech giants are likely precluded due to antitrust issues. Forming an investor group with sufficient funds that also passes US government vetting may prove difficult.
Furthermore, untangling TikTok’s operations, staffing, and core technology like its recommendation algorithm from ByteDance will be an enormous technical and legal challenge. China could also block the transfer of key intellectual property — likely TikTok’s most valuable asset — under its own export control laws. Beijing has criticized the forced sale and may retaliate against US firms.
Finding a viable divestment path that appeases US authorities while preserving TikTok’s value may be an insurmountable task. A nationwide ban, once highly improbable, now looms as a real possibility.
Information for this story was found via The New York Times, the Wall Street Journal, BBC News, the Telegraph, NCRI, and the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
