TikTok legislation added to the House foreign aid package

By Mary Clare Jalonick and Haleluya Hadero | Associated Press

WASHINGTON — Legislation that could ban TikTok in the U.S. if its China-based owner doesn’t sell its stake won a major boost late Wednesday when House Republican leaders included it in a package of bills that would send aid to Ukraine and Israel. The bill could be law as soon as next week if Congress moves quickly.

The TikTok legislation, which passed the House in March and has widespread support in both chambers, was included in the House package as leaders have worked to win votes for the foreign aid bills and after negotiations with the Senate over how long the Chinese technology firm ByteDance Ltd. would have to sell its stake in the app to continue operating in the United States. President Joe Biden has said he would sign the TikTok legislation if it reaches his desk.

The new version of the legislation won a key endorsement from Senate Commerce Committee Chairwoman Maria Cantwell, who said in a statement that she had successfully pushed to extend the period from six months to a year to give the company enough time to find a buyer. While the original bill had a six-month deadline for TikTok to be sold, the revised legislation would give nine months and a possible three-month extension if a sale was in progress.

“Extending the divestment period is necessary to ensure there is enough time for a new buyer to get a deal done,” said Cantwell, who had previously expressed doubts about the bill. “I support this updated legislation.”

If Congress passes the TikTok bill, it would be an extraordinary and unusual moment in which both parties unite against one company – something lawmakers are usually reluctant to do. But the popular social media app has prompted widespread outrage on Capitol Hill, where there is bipartisan concern about Chinese threats to the United States and where few members use the platform themselves.

Opponents say they believe the ban would be unconstitutional, and there would be likely court challenges if it passes. There has been aggressive pushback from the company, content creators who make money on the app and some of the platform’s 170 million U.S. users, many of whom are young. In some cases, lawmakers have received profanity-laced calls from users who were prompted by the app to call their representatives in Congress.

To date, the U.S. government has not provided evidence that shows TikTok shared U.S. user data with the Chinese government, or that Chinese authorities have tinkered with the company’s popular algorithm, which influences what Americans see.

Since mid-March, TikTok has spent $5 million on TV ads opposing the legislation, according to AdImpact, an advertising tracking firm. The ads have included a range of content creators, including a nun, extolling the positive impacts of the platform on their lives and arguing a ban would trample on the First Amendment.

TikTok has also spent money on Facebook and Instagram ads that, among other things, talk about investments in data safety. In addition, the company has mounted a lobbying campaign in Washington that included flying in content creators who rely on the platform for income.

Alex Haurek, a spokesman for the company, said in a statement Thursday that “It is unfortunate that the House of Representatives is using the cover of important foreign and humanitarian assistance to once again jam through a ban bill that would trample the free speech rights of 170 million Americans, devastate 7 million businesses, and shutter a platform that contributes $24 billion to the U.S. economy, annually.”

Nadya Okamoto, a content creator who has roughly four million followers on TikTok, said she’s been having conversations with other creators who are experiencing “so much anger and anxiety” about the bill and how it’s going to impact their lives. The 26-year-old, whose company “August” sells menstrual products and is known for her advocacy around destigmatizing menstrual periods, makes most of her income from TikTok.

“This is going to have real repercussions,” she said.

Dan Ives, a tech analyst at the financial advisory firm Wedbush Securities, said such a sale would be very complex to carry out, even with an extended timeline.

The platform would come with a hefty price tag that only the biggest tech companies could afford, something that’s likely to raise antitrust concerns. Then, there’s the issue of TikTok’s algorithm, the app’s secret sauce that recommends videos to users. The bill bars ByteDance from controlling TikTok’s algorithm, and a potential sale is likely to face opposition from China, which has been clamping down on exports of recommendation algorithms by Chinese tech companies.

“Buying TikTok without the algorithm would be like buying a Ferrari without the engine,” said Ives.

Some investors, including former Treasury Secretary Steven Mnuchin and “Shark Tank” star Kevin O’Leary, have already voiced interest in buying TikTok’s U.S. business. If a sale isn’t approved and the platform does get banned, Ives said it would be a “dream scenario” for Snapchat, Meta and YouTube, which have faced stiff competition from TikTok the past few years.

If the bill does pass, it would be the most significant step Congress has taken in decades to regulate the tech industry. For years Congress has failed to act on legislation that would protect users’ privacy, protect children online, make companies more liable for their content and put loose guardrails around artificial intelligence, among other things.

Still, it is a narrow shot at one company when many lawmakers would like to see broader change.

Democratic Sen. Mark Warner of Virginia, the chairman of the Senate Intelligence Committee, has been pushing for years for tech regulation. If the TikTok bill passes, he said, “it will be the first guardrail we put on anything on social media.”

Warner said there are a lot of other things that Congress needs to do, “but you’ve got to start someplace.”

While most lawmakers support the TikTok bill, some have said it would set a dangerous precedent.