Following a long break from critical Congressional scrutiny, lawmakers are opening another rift to force TikTok to sever ties with its Chinese parent company, ByteDance.
If passed, the bill would impose civil penalties on app stores and website hosting services that distribute TikTok and other covered services unless the app is separated from Chinese ownership. The penalty for an app store violating the law would be calculated by multiplying the number of U.S. users who "accessed, retained, or updated" the foreign rival app by $5,000. The bill would be enforced by the U.S. Attorney General.
It also sets up a process for the President to designate other social media companies from adversary countries like China, Russia, Iran, and North Korea subject to the bill—meaning apps owned by specific companies distributed in the U.S. will need to sever ties to continue operating there.
However, concerns over the scope of the restriction law and the authority it would grant to the enforcing agency ultimately halted movement on the matter.
The new legislation was created in an attempt to avoid potential legal concerns. For example, despite targeting ByteDance, it is tailored to avoid appearing as a punishment on a single company. This is partly because the bill allows ByteDance a 165-day window to avoid prohibitions on its apps if it sells them during that time; it also creates a process through which it can be applied to other apps.
While TikTok is owned by a Chinese company, it has claimed to store U.S. user data on servers outside the country and is working on plans to further distance the data in the U.S. from the reach of ByteDance employees in China. Many lawmakers have expressed concern that China's national security law could compel ByteDance to provide information on U.S. users if they have access to it.
Despite bipartisan concerns, there remains a central question of whether any action to ban or restrict TikTok could reignite momentum in the upcoming election year—especially one where TikTok is a useful tool for candidates looking to secure their seats.