If TikTok gets banned, it won't be accessible in US App stores, hindering its ability to attract new subscribers and preventing current users from receiving updates.
TIKTOK SHUFFLE
The recent passing of the Bill by the US House of Representatives to ban TikTok has come after months of increasing concern by the US government over the potential influence of the Chinese government on the operations of ByteDance, the Chinese company that owns TikTok.
The US government is not the only one that has expressed concern about the potential for political interference from the Chinese government in TikTok. Many governments, including Australia, have introduced restrictions prohibiting TikTok from being used by or on the phone of government officials and bureaucrats.
This is, however, the first time a government has sought to ban a social media platform. The actions of the House of Representatives raise numerous questions, such as:
· Is the concern over national security a “straw argument”? In other words, a problem is created that the government resolves, so can it say it is “doing something”?
· Is the government willing to risk the political and economic blowback from such a ban?
· Is the concern about the influence of the Chinese government in American society valid?
This article considers some of these issues. Firstly, what does the ban potentially mean?
What does the ban mean?
The Bill, as passed by the House of Representatives, gives ByteDance a choice between:
a) Selling TikTok and divesting itself of the platform, or
b) Facing a ban within the US
If ByteDance takes the first option and tries to sell TikTok to a US company, it can continue to operate in the US, provided the President believes it is no longer “controlled” by a foreign power. However, as part of selling TikTok, ByteDance must also relinquish control of TikTok’s algorithm.
TikTok will no longer be available through US App stores if it is banned. This would prevent TikTok from attracting new subscribers in the US and prevent current users from receiving updates. The net effect is that TikTok would gradually become unusable in the US.
Is TikTok likely to be banned?
While the US government can ban TikTok, is it likely to occur?
There are several barriers to a ban being imposed, at least within the next year.
1. Time frames and elections
The Bill, as proposed by the House of Representatives, gives ByteDance six months to sell off TikTok.
This timeframe is unrealistic for any large business to enter into negotiations and sell an asset as large as TikTok. The due diligence and legal requirements would, in themselves, take longer than six months.
The US is also in a Presidential election year. There are approximately 170 million TikTok users in the US. It is unlikely that in an election year when there is considerable voter dissatisfaction with both candidates, either party would risk creating a lightning rod for voter dissatisfaction and anger by banning TikTok.
2. Senate and Legal Stumbling blocks
The Bill would first have to be passed by the Senate before the ban could take effect. Even if it were passed by the Senate, civil liberty groups would likely challenge the ban in the US Federal Court as an infringement of TikTok’s First Amendment right to free speech. A challenge to the prohibition of freedom of speech grounds would have to be tested, and the legal processes involved would delay the ban's implementation.
3. Realities of business obligations
As mentioned, divesting ownership of TikTok, negotiating a sale, conducting due diligence and meeting all the legal obligations would take longer than six months. The unrealistic time frame raises questions about the government’s intention to follow through on the proposed ban.
Interestingly, it isn’t just American business and legal obligations that must be met. The Chinese government has also indicated that it would “strongly oppose” any sale of TikTok and that any sale would have to comply with Chinese law on tech exports. The law on tech exports requires licenses for certain technology to be exported based on national security concerns. While it is currently ambiguous how the law on tech exports would impact any proposed sale of TikTok, some believe it could include the algorithm that powers TikTok. This means the Chinese government could prevent ByteDance from selling the algorithm, which was one of the conditions of the Bill from the House of Representatives.
The fact that the Chinese government has come out and already indicated they will strongly oppose the forced sale of TikTok provides a strong indication that any attempt by the USA to ban or force a sale of TikTok will be met with repercussions from the Chinese government. The nature of these repercussions remains unclear. However, the Australian government and the economy felt the impact of repercussions, including trade sanctions, when the Morrison government mishandled diplomatic relations with the Chinese government.
While it is possible that the ban passed by the House of Representatives could be implemented, it is unlikely that it will be implemented at least in the next twelve to eighteen months during the presidential campaign.
Given that the ban is unlikely to be imposed within the specified timeframe, why raise the issue now?
If ByteDance tries to sell TikTok to a US company, it can continue to operate in the US, provided the President believes it is no longer “controlled” by a foreign power.
The motivating power of fear
Fear and concern have motivated the ban, with politicians giving it bipartisan support. The fear is that the Chinese government will force ByteDance to hand over the data it holds on the approximately 170 million Americans using TikTok. Linked to this fear is the concern that the Chinese government will try to influence American elections by having access to the data.
The fear is not unfounded. China does have a set of national security laws that compels organisations to assist with intelligence gathering, and this could include ByteDance. However, the US government has produced no evidence to suggest that ByteDance has been forced to hand over its data to the Chinese government. ByteDance has also vehemently denied any government interference.
It’s all about the data
While the fear of the US government may be reasonable, it is important to remember two things about data.
Firstly, like all governments, including the Australian government, the US government continually collects data on its citizens.
Secondly, social media platforms like Facebook, X, and Snapchat collect vast amounts of data. While we use social media to be entertained and for other social purposes, the companies behind the platforms are not interested in our entertainment. Their concern is profit. Profit is driven by collecting user data and targeting them with advertising to change their behaviour and influence them subtly. For these companies, our entertainment is secondary to their capacity to profit from people scrolling.
While it may be reasonable to have concerns about foreign governments collecting data on the citizens of another country, what is more concerning is the data being collected on people by their governments and companies. Ironically, US politicians haven’t taken concrete steps to curb the power and data collected by Facebook or other social media companies. Instead, they have chosen to focus their attention on a Chinese-owned company.
ByteDance caught in a strategic conflict for supremacy
While the US government may state they introduced the Bill to prevent China from accessing the information of US citizens, a more likely reason for the Bill is that it is part of the ongoing strategic conflict between the US and China to gain supremacy in the tech industry.
The Chinese government is determined to become self-reliant in areas of AI and chip-making and to wrest supremacy in these areas from the US. In 2024, the Chinese Central Government increased spending on scientific and technological research by 10%, equating to $51.5 billion US.
Part of this strategic conflict is that both the US and China see AI as the key to economic and military power in the 21st century. Given China’s stated military goals, having supremacy in the AI and tech industry is advantageous to their possible success in achieving their military goals.
Congress recently passed the CHIPS Act, and the US executive Branch has been implementing trade control to try to deny China technology that it believes is critical for developing AI.
Hence, the ban on TikTok is likely not just about the possibility of the Chinese government coercing ByteDance to hand over the data of 170 million Americans. It will also likely be another skirmish in the ongoing battle for supremacy between the US and Chinese government. This would help explain why the Bill has made it a condition that ByteDance hand over TikTok’s algorithm if it is sold.
While it is unlikely the ban will be implemented within the next couple of years, what is likely to happen is a further deterioration in relationships between the US and Chinese governments and the growth of mistrust, which will fuel further fears.
ByteDance does provide an example of the political shoe-shuffle that big businesses have to manage when they get caught up in the political race for supremacy.
