Biden signed a bill that could ban TikTok. What happens next?

President Biden signed a bill on Wednesday that could lead to a ban on TikTok, but the video-sharing app still won’t be isolated from its millions of American users.

The bill moved unusually quickly, being signed into law by the president less than two months after it was first introduced in the Chamber. Biden’s signature sets a timeline for TikTok’s China-based parent company, ByteDance, to sell the app or face a ban from U.S. app stores and networks.

ByteDance will have up to a year to find a buyer, but the process will likely be hampered by Chinese rules dictating technology exports and a legal challenge from TikTok.

“This unconstitutional law is a ban on TikTok and we will challenge it in court,” a TikTok spokesperson said in a statement.

“We believe that the facts and the law are clearly on our side and that we will ultimately prevail,” the spokesperson added.

Here’s what to expect next when the law goes into effect.

TikTok has up to a year to sell

The Foreign Adversary Controlled Applications Act, which was added to the foreign aid package passed by Congress this week, would force ByteDance to divest TikTok or be banned in the U.S.

Supporters of the measure say TikTok poses national security concerns because it is owned by a Chinese company, which they say exposes American users’ sensitive data to the Chinese government. TikTok rejected these accusations.

Lawmakers who supported the bill said several confidential congressional briefings informed them about the risks posed by TikTok and its connection to the Chinese government through ByteDance.

A TikTok spokesperson said Wednesday that the company has “invested billions of dollars to keep U.S. data safe and our platform free from outside influence and manipulation.”

Critics of the law said the threats to national and data security are industry-wide and did not support a bill that would name and target one company as a way to mitigate the problems.

The version included in the aid package extended the sales period from six months – as defined in the version approved by the Chamber in March – to 270 days. This would push the deadline back to January, after the heated 2024 elections.

The president also has the authority to grant a 90-day extension for ByteDance to sell TikTok, which would push the deadline back to April next year.

This extension was a crucial aspect that gave the bill more support among senators who were initially uncommitted to the bill, including Senate Commerce Committee Chair Maria Cantwell (D-Wash.).

But even with the extension, some critics of the bill have said it is not a long enough timeframe for a sale of this size and argue that the bill is ultimately a ban rather than an ultimatum, given the challenges surrounding of a sale.

“Given that the average duration of a company sale is over a year, the new longer time frame for a forced sale still does not guarantee enough time to find a buyer for such a large company, making the ban as likely as the last one. bill,” Jenna Leventoff, senior policy counsel at the American Civil Liberties Union for the First Amendment, said in a statement.

Who would buy TikTok and would it be the same thing?

Supporters of the project insist that the project is not an outright ban, despite how the company describes it, as it gives ByteDance the ability to let the app run under a different owner.

“We hope TikTok continues,” Sen. Mark Warner (D-Va.) said in a speech on the Senate floor Tuesday before the final vote, but only if it is not controlled by a country defined as an adversary to the US law. USA.

Analysts at WedBush Securities said in a memo on Tuesday that TikTok’s “likely buyers” would be Microsoft or Oracle, which was involved in TikTok’s “Project Texas,” an attempt by TikTok to alleviate concerns placing US data on US-based Oracle servers. and “strategically would make a logical adjustment.”

“Several private equity and consortiums would also clearly present proposals for this asset, with former Treasury Secretary Steven Mnuchin among many who have shown early interest in this fundamental asset,” the analysts said in the memo.

But China’s export control rules are a crucial obstacle that could cloud the process of another company purchasing the app and how it continues to operate after a potential sale.

The rules, updated in 2020, include restrictions on the sale of specific technologies, such as algorithms, without government approval. China will likely try to block the sale of TikTok’s algorithm, said Stephen Weymouth, an associate professor at Georgetown University’s McDonough School of Business.

“The value of TikTok is the algorithm, and it’s not obvious who would be interested in buying TikTok if the algorithm doesn’t come with it. You’re buying a brand instead of a really useful app,” Weymouth said.

If a sale without the algorithm goes through, it would also mean that the remaining TikTok could be different from the app that users, creators and small businesses are accustomed to and have been pushing Congress and the president to keep.

Judicial challenge could block law and extend timeline

Legal action could also lead to a possible ban and possibly extend the 270-day deadline imposed by legislation.

TikTok, along with some advocacy groups and progressive lawmakers, say the law impedes free speech rights. This appears to be TikTok’s central argument as it prepares a legal challenge.

“This ban would devastate 7 million businesses and silence 170 million Americans. As we continue to challenge this unconstitutional ban, we will continue to invest and innovate to ensure that TikTok continues to be a space where Americans from all walks of life can come safely to share their experiences, find joy, and be inspired. ,” a TikTok spokesperson said in a statement. declaration.

TikTok has had success before in blocking attempts to ban the app, both under the Trump administration and in an attempt by Montana.

Weymouth said the latest ban’s focus on national security issues, however, could lead to a different outcome in court.

Reps. Mike Gallagher (R-Wis.) and Raja Krishnamoorthi (D-Ill.), the top lawmakers on the House Select Committee on the Chinese Communist Party, said when they first introduced the bill in March that they intended to bypass it. issues that other attempts have faced in court.

For example, instead of just naming TikTok and ByteDance, the bill also grants the president authority to designate other apps as apps controlled by foreign adversaries. It also offered a window of time for the sale, rather than being worded as a total ban, as had been the case in other attempts.

Federal law may also have a better chance than a state law like Montana’s because “federal legislation is more likely to be viewed by the courts as a response and an address to national security concerns,” Justin Hurwitz, senior research fellow and academic director of the Center for Technology, Innovation and Competition at the University of Pennsylvania, said in an email.

“The government has good reason to assert that the law was written to address a compelling government interest, which is a key question for First Amendment analysis. The more difficult question is whether this law is an effective and specifically tailored way to address these concerns,” Hurwitz added.

Updated at 12:43 pm EDT