American legislators suggest TikTok's fate hinges on securing a new proprietor, yet accomplishing this task is no simple feat.
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An employee looks at his mobile phone as he walks past the logo of the video-focused social networking service TikTok, at the TikTok UK offices, in London, on February 9, 2022.
Finding a New Owner
In the midst of legislative discussions, US lawmakers are presenting a potential solution to the ongoing TikTok saga: find a new owner. While this proposition appears straightforward on the surface, its execution poses significant challenges.
At the heart of the matter lies a bipartisan bill awaiting approval in the US House of Representatives. This bill outlines a scenario where TikTok can remain operational in the US under one condition: ByteDance, its Chinese parent company, must relinquish control.
Representative Raja Krishnamoorthi, a key figure in this legislative push, emphasized that ByteDance holds the key to TikTok's fate. He pointed out that divesting Tiktok could ease the transition, implying that the ball is in ByteDance's court.
However, experts caution against oversimplifying the process. While lawmakers propose a seemingly straightforward solution, the reality may entail intricate negotiations and legal hurdles.
Acquiring TikTok US Operations
Amidst the interest shown by individuals like "Shark Tank" personality Kevin O'Leary in acquiring TikTok's U.S. operations, hurdles abound, including a stringent 6-month timeframe for completion.
Stanford University researcher Graham Webster, an expert in Chinese technology policy and U.S.-China relations, highlights the challenges, emphasizing the significant financial investment required and the lengthy negotiation process inherent in such acquisitions.
While major tech corporations possess the financial resources to pursue this venture, the Associated Press reported that they would encounter extensive scrutiny from antitrust authorities in both the U.S. and China.
However, the potential enactment of the bill, coupled with its survival through First Amendment legal battles, could potentially lower TikTok's acquisition cost.
Matt Perault, director of the University of North Carolina's Center on Technology Policy, noted that the legislation would likely result in a reduction in the sale price.
As the 180-day deadline approaches, the urgency for TikTok to sell or face complete prohibition would escalate, potentially leading to lower acquisition costs for interested buyers.
The proposed bill outlines provisions to ban TikTok in the U.S. but with an exception for a "qualified divestiture." This exception would only be feasible if the U.S. president, through an interagency process, determines that TikTok is no longer under the control of a foreign adversary.
Additionally, the restructured U.S.-based TikTok entity would need to sever all ties with ByteDance, including any cooperation related to content recommendation algorithms or data-sharing agreements.
Also Read: US Legislators Push for Laws to Curb AI Bias
The bill addresses longstanding concerns regarding the potential exploitation of data belonging to the 170 million American TikTok users by Chinese authorities. These concerns are rooted in Chinese national security laws mandating cooperation with intelligence-gathering efforts.
This legislation is unique in its singular focus on a specific company. Typically, the Committee on Foreign Investment in the United States (CFIUS), led by the Treasury Secretary, would evaluate whether such a sale poses any national security risks.
Related Article: US Lawmakers Rally Behind Bill to Block TikTok Amid National Security Fears
