The US Senate has approved a bill that gives ByteDance, the Chinese company behind the social media app TikTok, 270 days to sell its stake in the app. If the company fails to dance to the Senate’s tune, TikTok could end up getting banned in America! The bill was passed with 79 Senators voting in its favour, and 18 against it. It has now been sent to US President Joe Biden for his ascent, and given how Biden has previously indicated that he is inclined to sign it, he could sign the bill on Wednesday itself.
But TikTok users are spread across the world, and include American expats and Americans travelling to other countries. Delinking TikTok from all these global users will be complicated, not only due to technological loopholes like the proliferation of VPNs that effectively render any geography-oriented ban meaningless, but other concerns such as the location of the company’s digital infrastructure and related legal and jurisdiction issues. For example, what is still unclear is the impact of the potential ban on ByteDance’s datacenters that are concentrated in Southeast Asia, mainly in Singapore and Johor.
But for now, let us take a look at the story so far, because TikTok didn’t just land in America’s crosshairs, it has ruffled feathers of governments across the world.
Who else has banned TikTok?
If ByteDance fails to sell TikTok in the stipulated amount of time, the US could soon join countries like India, Iran, Nepal and Afghanistan that have completely banned the app. Others like Taiwan, Denmark, Austria, France and other European countries that have also partially banned the app, disallowing it on official devices of public servants and government officials. Additionally, the three top EU bodies – European Parliament, European Commission, and the EU Council – have all banned TikTok on staff devices. The app has been banned fully or partially in different countries for a variety of reasons ranging from national security concerns to political sabre-rattling to cracking down on pornography to protecting children and minors from inappropriate content to cyber security concerns and even spreading blasphemy.
Why is ByteDance facing the music?
There are at least 150 million TikTok users in the US, while global numbers are in the billions. Trouble began for ByteDance, when concerns were raised that the data of American TikTok users such as their browsing history, location and biometric identifiers could be made available to the Chinese government by the company. There were concerns that China could then use this to spread propaganda and influence American politics.
However, ByteDance has insisted that the company is not controlled by the Chinese and that it doesn’t share any data with them. The app has never existed in Mainland China, where people use a similar app Douyin instead of TikTok.
But the incorporation of the parent company and its subsidiaries that own the app can sometimes appear confusing. Sample this, the company that owns TikTok is called TikTok LLC. It was incorporated in Delaware and is based in Culver City, California. TikTok LLC is in turn owned by TikTok Ltd. that was registered in Cayman Islands and is based in Shanghai. Meanwhile, its parent company ByteDance was incorporated in the Cayman Islands, but is based in Beijing, China. It is thus subject to Chinese laws.
It is also noteworthy that China has implemented exports controls governing algorithms. The algorithm that powers TikTok’s recommendation engine falls under the purview of these laws. Thus, in theory, China could block the sale of TikTok, or permit it only if it excludes the highly lucrative algorithm.
In an official statement released last month in response to a push to pass the bill, the company said, “This bill is an outright ban of TikTok, no matter how much the authors try to disguise it. This legislation will trample the First Amendment rights of 170 million Americans and deprive 5 million small businesses of a platform they rely on to grow and create jobs.” In fact, TikTok had also urged its users to call their Congressmen and tell them what TikTok meant to users, and urge them to vote against the bill. The company has vowed to pursue legal recourse to prevent the loss of its most valuable cash cow.
A messy divorce
But even if TikTok is sold, there are many business and operational aspects that cannot be ignored. For instance, ByteDance’s global data centers are concentrated in Singapore and Johor (Malaysia). Also, what exactly would the ban entail? Will the app become inaccessible to Americans? Can they bypass access issues with simple workarounds like using a VPN? Will they be able to use their accounts if they are in another country?
W.Media will delve into all these questions and more in our upcoming special feature on the ramifications of the possible TikTok ban in the US. Watch this space for more…