Senate Commerce Committee Chairwoman Maria Cantwell (D-Wash.) signified her support on Wednesday for a bill to force TikTok to divest from its Chinese ownership or lose the ability to operate within the United States.
A bill, dubbed the “Protecting Americans from Foreign Adversary Controlled Applications Act” passed in the U.S. House of Representatives by a 352–65 vote on March 13. The bill passed at the time with the support of 197 Republicans and 155 Democrats, while 50 Democrats and 15 Republicans voted against it.
The legislation prohibits entities deemed sufficiently owned or controlled by individuals within an adversary country—namely China, Russia, Iran, or North Korea—from operating within the United States.
The bill specifically identifies “foreign adversary controlled” applications as those that are domiciled, headquartered in, or organized under the domestic laws of China, Russia, Iran, or North Korea; or a company in which a person, entity, or combination of persons or entities in the aforementioned countries have a combined ownership stake of 20 percent or more in said company; or is otherwise “subject to the direction or control of a foreign person or entity.”
The bill specifies the popular video-sharing platform, TikTok, is one such entity that would be considered a “foreign adversary controlled application” due to its share of ownership controlled by the Chinese-headquartered ByteDance Inc. Should the bill pass, TikTok’s Chinese owners would have a window of time to sufficiently divest their ownership in the video-sharing platform, after which fines will apply to any entities that distribute, maintain, or update the application for U.S. users.
The bill proposes a fine against companies who host a “foreign adversary controlled application” of $5,000 per day, per user determined to have accessed the application as a result of a hosting website or app store.
The fines imposed against entities that continue to share and service updates for designated “foreign adversary controlled applications” would likely dissuade those entities from continuing to support such applications, limiting the avenues for those applications to continue their U.S. operations.
Divestment Timeline Extension Wins Senator’s Support
Some opponents of the new bill to regulate TikTok’s ownership had expressed concerns over the divestment timeline presented in the original legislation.
“It’s unreasonable to believe that in 180 days a buyer will be found and a deal will be formed, which will result in the company being banned,” Rep. Maxwell Frost (D-Fla.) said last month ahead of the original House vote.
Ms. Cantwell said she has been encouraged by a recent move by House Speaker Mike Johnson (R-La.) and other House leaders to expand the divestiture window for designated “foreign adversary-controlled applications” to avoid the punitive measures designed to stymie their U.S. operations.
“I’m very happy that Speaker Johnson and House leaders incorporated my recommendation to extend the Byte Dance divestment period from six months to a year. As I’ve said, extending the divestment period is necessary to ensure there is enough time for a new buyer to get a deal done. I support this updated legislation.”
The legislation has sat with the Senate for more than a month after its House passage. Senate Majority Leader Chuck Schumer (D-N.Y.) has not offered a timeline for when the Senate might take up the bill.
Ms. Cantwell’s endorsement of the House bill could add momentum for its passage.
If the legislation does pass in the Senate, President Joe Biden has indicated he would sign it into law.
TikTok’s Defenders Have Other Concerns
While Ms. Cantwell indicated her concerns about the divestment timeline for TikTok were eased by the latest House updates, other criticisms of the legislation remain.
The bill has attracted opposition from a mix of progressive Democrats and conservative Republicans.
Rep. Alexandria Ocasio-Cortez (D-N.Y.) said in a March 25 video statement that she’s not swayed by arguments that TikTok poses a U.S. national security risks because of its data collection practices. She said other social media companies that would not be affected by the House bill also collect user data.
“In fact, the United States is one of the only developed nations in the world that has no significant data or privacy protection laws on the books. The EU, for example, has something known as the GDPR, which really forces an enormous amount of protection on individual users and the amount of data that companies can collect about you without your knowledge,” she said. “So to me, the solution here is not to ban an individual company, but to actually protect Americans from this kind of egregious data harvesting that companies can do without your significant ability to say ‘no.'”
Ms. Ocasio-Cortez also said Congress has not received a classified briefing to substantiate the national security concerns raised around TikTok’s operations.
Rep. Marjorie Taylor-Greene (R-Ga.) likened the regulations being proposed against TikTok to opening “Pandora’s Box.”
“What’s to stop Congress or the United States government in the future from forcing the sale of another social media company claiming that it’s protecting Americans data from foreign adversaries?” the Georgia Republican said.
Ms. Taylor-Greene posed a scenario where a social media platform like X could face similar regulatory pressure as TikTok.
President Joe Biden had said, in a November 2022 exchange, that Elon Musk’s purchase of Twitter is “worthy of being looked at” after a reporter asked whether Mr. Musk’s acquisition partnership with foreign business owners raises any U.S. national security concerns.
