The US House of Representatives has passed a bill that can force the Chinese company ByteDance, the owner of the short video app TikTok, to either sell TikTok to a US-based company or get banned in the country. As per reports, the bill, if made into a law, gives ByteDance about 6 months to divest their assets in TikTok in the USA or get banned.
The US House of Representatives overwhelmingly passed a bill that would give TikTok's Chinese owner ByteDance about six months to divest the US assets of the short-video app, or face a ban https://t.co/IfcbDinfFT pic.twitter.com/hjUatxS9Z7
— Reuters (@Reuters) March 13, 2024
The bill was passed with an overwhelming majority, supported by both Democrats and Republicans. The bill still needs to be cleared by the Senate and get approved by the President to become a law in the USA.
The bill passed 352-65 in a bipartisan vote in the House of Representatives. Senate majority leader Chuck Schumer has stated that the Senate will review the bill.
Chinese company ByteDance, founded in 2012, owns the wildly popular short video App. The company is registered in the Cayman Islands and has offices around the US and Europe.
It may trigger a diplomatic row between China and USA
Joe Biden has signaled that he intends to approve the bill when it lands on his desk. This may trigger a diplomatic row between China and the USA because ByteDance cannot divest its stakes in TikTok without the Chinese government’s approval, as per Chinese law, and China has stated that it won’t allow the divestiture.
Chinese companies are required by Chinese security laws to share their data with the Communist government.
“The USA cannot take the risk of having a dominant news platform in America controlled or owned by a company that is beholden to the Chinese Communist Party”, stated Wisconsin Republican Mike Gallagher who has co-authored the bill.
Former President Donald Trump, who had himself tried to ban TikTok in his term, has indicated that he may not support the bill in the Senate, with some Republicans hinting that the bill will pave the way for other corporations to forcibly sell their staeks in the name of data protection.
TikTok tried to assure that they have walled up US data from Chinese officials, but failed
TikTok’s US chief Shou Zi Chew had stated that the company was committed to keeping its data secure and the platform “free from outside manipulation”. However, an investigation by Wall Street Journal had shown that the systems TikTok claimed to have in place were largely porous and Chinese employees of ByteDance in China could still access data of US users.
TikTok has over 150 million users in the USA. The App is valued at around 268 billion USD, so it is also unclear if any US company will be willing to buy the stakes.
India banned TikTok back in 2021
Back in January 2021, The government of India permanently banned 59 Chinese apps, including ByteDance’s TikTok, WeChat, Baidu, Alibaba’s UC Browser, Club Factory, BIGO Live, and others, citing national security concerns.
By the end of 2020, a total of 267 apps originating from China were banned in batches. PUBG, a popular mobile game, was also banned as a Chinese company owned shares in the game though it is owned and developed by PUBG Corporation, a South Korean gaming company.
The original action was initiated by the Ministry of Electronics and Information Technology (MeiTY), Government of India, under Section 69A of the IT Act, stating that these apps are engaging in activities prejudicial to the sovereignty and integrity of India, defence of India, the security of state and public order.
