Biden Signs Law That Could Lead to TikTok Ban

President Biden has signed a bill into law that could lead to an overall ban of TikTok in the US.

The House of Representatives approved a first draft of the bill in March of this year but the bill stalled at the Senate.

The House then amended the bill and attached it to an overall funding bill for aid to Ukraine and Israel in the hopes of accelerating a vote in the Senate. The House accepted the bill with bi-partisan support, where it moved swiftly through the Senate before reaching Biden.

The law gives TikTok’s parent company ByteDance 270 days to sell TikTok or it will face a ban in the US. If a sale is in progress by the January 19 deadline, the amended bill – now law – will give ByteDance an additional 90 days to complete the sale.

If not sold, the law would then require US app stores to cease offering TikTok. New users would no longer be able to download the app and existing users would no longer be able to download updates, which could include new features or security patches. Users would not face punishment for continuing to use the app but without the ability to update, TikTok would quickly become unusable.

TikTok CEO Shou Chew told users, “Rest assured: we aren’t going anywhere” and vowed to “keep fighting for your rights in the courts.” He went on to say, “The facts and the Constitution are on our side and we expect to prevail.”

Sources report that ByteDance would prefer to face a shut down in the US rather than sell TikTok. TikTok’s 170 million US users represent approximately 5% of ByteDance’s daily active users and accounts for approximately 25% of TikTok’s revenues worldwide.

The real value is TikTok’s algorithm, which ByteDance also uses for its other apps such as Douyin, the Chinese equivalent of TikTok. If ByteDance were to sell TikTok, it would be likely be without the algorithm, which then puts into question whether there’s any value for the buyer.

TikTok and ByteDance have both advised that they will fight the legislation. This bill passing into law is not necessarily the end for TikTok in the US but will likely be the beginning of a long legal battle.