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Policy Backgrounders

CED’s Policy Backgrounders provide timely insights on prominent business and economic policy issues facing the nation.

TikTok Challenges US Law

May 10, 2024

Trusted Insights for What’s Ahead™

The national security supplemental the President signed in late April included a provision added in the final version of the bill to require divestiture of TikTok’s US operations. TikTok’s China-based parent company ByteDance has 270 days to sell TikTok to an approved US buyer if it hopes to remain in the US market.

  • This week, TikTok and ByteDance filed a lawsuit challenging the law’s constitutionality; ByteDance indicated it would rather shut down TikTok in the US than sell it. Chinese officials have also expressed disapproval of US restrictions, suggesting it will block the export of TikTok’s underlying technology (which a sale to a US entity would require under Chinese law).
  • TikTok’s China ties have long concerned US policymakers, who fear that Chinese authorities could demand ByteDance turn over US users’ data and wield the platform to spread propaganda. While concerns and reporting of risks mount, US officials will have to judge what evidence they are willing to disclose to justify the law against TikTok’s legal challenge.
  • While governments globally are reviewing TikTok’s security risks, a nationwide ban would add the US to a small group of countries prohibiting TikTok entirely; other jurisdictions such as Australia, Canada, France, the UK, Taiwan and the European Commission have banned or restricted the use of TikTok on government devices, and Indonesia banned its e-commerce function under a broader restriction on e-commerce on social media. It remains unclear if more countries would follow the US’ lead.

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