Short video app: US law on Tiktok sales is gaining momentum

Short video app: US law on Tiktok sales is gaining momentum

Twice is better: Democrats and Republicans are once again voting for a law that could lead to the ban of Tiktok in the USA. Now it has a better chance of quickly passing the Senate.

Things are getting serious for Tiktok: A US law intended to force a change of ownership of the popular short video app could come into force in a few days. Tiktok then threatens to be banned from American app stores if the app continues to belong to the current owner Bytedance a year later.

The US House of Representatives voted again on Saturday for the law that had already been passed in March. This time, however, it is bundled with other measures, especially the billions in aid for Ukraine, Israel and Taiwan. This should ensure that the entire legislative package quickly passes through the Senate as the second chamber of Congress and that President Joe Biden then signs it. A vote in the Senate is expected from Tuesday. However, it is unclear whether, as in previous cases, US courts could torpedo the plans.

Bytedance is viewed across all parties in the USA as a Chinese company that must bow to the will of the Chinese Communist Party. That’s why there are warnings that Chinese authorities could gain large-scale access to data from American users – and also use the platform for political influence. Tiktok has been denying this for years, but is not being heard in US politics.

After the first version, Bytedance would have six months to separate from Tiktok. This was sometimes criticized as being too short. The new draft provides for a nine-month deadline for a sale. Biden can extend this by another three months. The extension would at least move the showdown to after the presidential election in early November.

Democrats in a quandary

The law puts Biden’s Democrats in a quandary: On the one hand, the president wants to take a tough position towards China, and on the other hand, the app is popular among young users, whose votes he needs for re-election in November. Biden’s campaign team only opened a Tiktok account this year.

“It is unfortunate that the U.S. House of Representatives is using the guise of important foreign and humanitarian assistance to once again push through a ban bill that would trample on the free speech rights of 170 million Americans, bankrupt 7 million businesses and shut down a platform, which contributes $24 billion annually to the US economy,” a Tiktok spokeswoman criticized the decision over the weekend.

Tiktok emphasizes that it does not see itself as a subsidiary of a Chinese company. Bytedance is 60 percent owned by Western investors. The company headquarters are on the Cayman Islands in the Caribbean. Critics counter that the Chinese founders, with a share of 20 percent, maintained control thanks to higher voting rights and that Bytedance has a large headquarters in Beijing.

Tiktok wanted to change the US government’s mind with a plan to store American users’ data in the US and control access to it and the app’s software code. But “Project Texas” didn’t help. There is a similar initiative in Europe with data storage in Ireland. The service is the only globally successful online platform that does not come from the USA.

170 million users in the US

According to its own information, Tiktok has 170 million users in the USA. During his term as US President, Donald Trump tried to force a sale of Tiktok’s US business to American investors with threats of a ban.

But the plan failed primarily because US courts suspected the plans for a Tiktok ban to violate the freedom of speech enshrined in the US Constitution. A current law in the state of Montana that was supposed to ban Tiktok from the app stores there is also on hold.

Trump has now backed away from calls for a ban. Tiktok is an important counterweight to Facebook, which he sees as an “enemy of the people,” the ex-president said in an interview.

Tiktok boss Shou Chew wants to defend himself against the US law. The company will do everything possible and use legal means to defend the platform, he said. Tiktok insists that the goal of the law is to ban the app in the US.

Who could buy Tiktok?

It is unclear who could buy Tiktok. The big tech companies are unlikely to be an option for competitive reasons. Former US Treasury Secretary Steven Mnuchin announced in March that he was organizing a group of investors to buy Tiktok. His plan is to reprogram the app in the US using US technology.

Source: Stern

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