In One Sentence

• On March 13, the House of Representatives overwhelmingly passed a bill (352-65) that would lead to a nationwide ban on TikTok if its Chinese owner ByteDance does not divest the U.S. assets of the app within six months.
• The bill now moves to the Senate where a counterpart text does not exist and where the bill’s future remains uncertain.
• House Select Committee on the Chinese Communist Party Chair Mike Gallagher (R-WI), one of the bill’s authors, said ByteDance’s full divestiture of TikTok is the “only path” for its continued operations in the U.S.
• After the bill passed the House, the White House reiterated its own support for the bill, telegraphing its desire to see TikTok split from its China-based parent company.
• Former Treasury Secretary Steven Mnuchin has announced plans to build an investor group to acquire TikTok should it become available on the market.

Mark the Essentials

• Senate Democratic leader Chuck Schumer (D-NY) has not yet committed to bringing the bill up for a vote, while some senators fear that a slower committee-based process could allow TikTok’s lobbying to neutralize the push for the ban in the upper chamber.
• TikTok, a Singapore-based company with over 170 million American users, is the full subsidiary of the Chinese technology firm ByteDance, which has frequently come under scrutiny since the Trump administration for its connections to the Chinese Communist Party.
• Rep. Mike Gallagher contended that the bill is not a ban on TikTok while noting that the forced sale of TikTok “absolutely could” happen before the United States’ presidential election this November.
• Speaking on behalf of the Biden administration, White House national security communications advisor John Kirby said “we don’t want to see a ban on TikTok” and suggested that the purpose of divestiture was to address the concerns about “data security and what ByteDance and what the Chinese Communist Party can do with the information they can glean off of Americas’ use of the application.” President Biden had earlier said that he would sign the bill in its current form if it arrives on his desk.
• In response, China’s Ministry of Commerce asked the U.S. to “respect the principles of a market economy and fair competition [and] stop unjustly suppressing foreign companies” while describing the U.S.’ actions as “the logic of a bandit.”
• The Chinese government is reported to have signaled to ByteDance that it will not allow a forced sale of TikTok and would rather have the app be banned in the United States.

Keeping an Eye On…

• We’ve seen this movie before. On August 14, 2020, President Trump issued an Executive Order instructing ByteDance to divest all interests and rights in the U.S. operations of its video-sharing app TikTok within 90 days and, upon divestment, destroy all user data wheresoever located. ByteDance shot back in court that the order violated TikTok’s First Amendment expressive rights, its Fifth Amendment due process protections as well as the Fifth Amendment’s ‘Takings Clause’, and amounted to an overbroad and unjustified claim of authority. The court sided with ByteDance. By restricting the transmission of personal communications and informational materials, items covered under the International Emergency Economic Powers Act’s (IEEPA) Berman Amendment, President Trump had exceeded his authority under the IEEPA and violated the First Amendment rights of TikTok and its users. Relatedly, on August 28, 2020, China’s Commerce Ministry updated its list of “forbidden and restricted technology exports” to include “personalized information recommendation services based on data analysis”—in effect, meaning that ByteDance would need government approval (which would not be forthcoming) to effectuate a divestiture. For added measure, China enacted a new Export Control Law two months later on October 19, 2020, which permitted recourse to “reciprocal measures” if another country abuses export controls to endanger national security or national interests. In sum, the White House’s divestiture order was nullified and the app in any case was not allowed to go on sale. The upshot of this failure though was the spawning of a creative localized data stewardship arrangement that ensured that practically all of TikTok’s U.S. data was walled off and would reside within the U.S. tech company Oracle’s cloud, and that Oracle would serve as TikTok’s local data controller and—in addition to a CFIUS-vetted oversight board—its auditor for verifying its recommendation algorithm. Three-and-a-half years on, the players have changed this time around but the storyline remains the same. Instead of the White House, it is Congress taking the lead via the Protecting Americans from Adversary Controlled Applications Act, which passed the House by a 352-65 margin and is now under consideration in the Senate. And rather than depend on the President’s IEEPA authority in the service of national security (which the courts ruled he did not enjoy on informational materials), a legislative workaround is sought to be effected that would authorize the Justice Department to enforce a ban on the app, failing its divestiture. Relatedly, the RESTRICT Act of March 2023 had also sought to sidestep IEEPA’s informational materials exception and modernize the president’s international economic authorities for the digital era by granting the Commerce Department the authority to block ICT apps from ‘untrusted’ vendors in the name of national security. Neither bill, however, engages the essential legal crux of the matter—that being, that courts across the land and all the way up to the Supreme Court have ruled that mere invocation of a national security threat based on supposition or guesswork is insufficient to justify the squelching of First Amendment rights. The threat must be real, and a proposed ban an unavoidable option to address this threat. TikTok must be shown to have aligned its algorithm with Beijing’s disinformation efforts at the latter’s behest or coercion and be likely to do so again, if such a ban is to be sustained. Neither the White House in 2020 nor the congressional bills today can mount this evidentiary threshold. Ultimately, TikTok will win the day in court (if the Senate follows through and sends the House bill to the President’s desk) but the true failure here is not one of legislation or law; rather, it is one of America’s lack of self-confidence. At the height of the Cold War in the mid-1960s, the Supreme Court ruled in Lamont v. Postmaster General that U.S. citizens enjoyed a right to receive foreign information, even if it was “communist political propaganda.” In the mid-1980s, it was the policy of the Reagan administration that despite Soviet bloc intelligence gathering efforts, the products of federally-funded fundamental science and engineering research should remain unrestricted—subject, of course, to relevant national security classification. Today, that self-confidence seems to have evaporated in the face of the China Challenge. TikTok is supposedly that propaganda organ that will, on cue, utilize subliminal techniques to convert America’s youth into card-carrying red communists. Yeah. About the only commonality that links the two is that neither bothers too hard about the mere inconvenience of voting!

Expanded Reading

• House passes a bill that could lead to a TikTok ban if Chinese owner refuses to sell, AP News, March 13, 2024
• House Passes Bill to Force TikTok Sale From Chinese Owner or Ban the App, The New York Times, March 13, 2024
• US House passes bill to force ByteDance to divest TikTok or face ban, Reuters, March 14, 2024
• Former Treasury Secretary Mnuchin is putting together an investor group to buy TikTok, CNBC, March 14, 2024
• TikTok’s lobbying firms may be next target of blacklist by lawmakers, Politico, March 15, 2024
• How TikTok and its parent company spent over $13 million on struggling lobbying campaign, CNBC, March 31, 2023
• China Signals Opposition to Forced Sale of TikTok in the U.S., The Wall Street Journal, March 15, 2024
• Forced sale of TikTok “absolutely could” happen before Election Day, Rep. Mike Gallagher says, CBS News, March 17, 2024
• After TikTok bill sails through House, senators pump the brakes, The Washington Post, March 15, 2024