The New Proposed TikTok Ban: What to Know
Three members of Congress propose to ban TikTok in the United States—and businesses, investors, policymakers, and the public should pay attention.
After former President Trump attempted to ban TikTok and WeChat via executive orders in August 2020, the courts overturned the actions. President Biden revoked both executive orders in June 2021. Now, three members of Congress — two Republicans and one Democrat — have introduced a bill to ban TikTok use in the United States writ large. It is effectively a reattempt of the Trump-era ban.
Banning TikTok would be a significant action, with broader implications for evolving US positions on the risks associated with foreign technology companies, products, and services. Here are the bill’s key takeaways for businesses, investors, policymakers, and the public. Brought to you by Global Cyber Strategies.
(If you want a deep-dive on the legislation, focused on its digital law and policy and national security implications, read my analysis for Lawfare.)
The One-Liner
While the bill’s immediate impact would be instituting a ban on TikTok and ByteDance in the United States, its security framework leaves the door open for expanded action — and introduces another set of ideas on US policy towards foreign technology companies, products, and services.
The Bill’s Contents
The One-Liner: The bill establishes a list of security criteria and definitions around foreign social media companies that pose a risk to national security — and then calls on the president to ban TikTok and ByteDance under those criteria.
The Paragraph: The bill calls on the president to invoke the International Emergency Economic Powers Act (IEEPA), the same authority Trump invoked in 2020, to prohibit transactions with covered foreign social media companies. It then does two things. First, the bill lists a set of security criteria and definitions that qualify a foreign social media company as a relevant national security risk, such as operating at a certain scale and being susceptible to a foreign government’s influence vis-a-vis content manipulation or data access. Second, it then explicitly states that TikTok and ByteDance are considered qualified companies under the security criteria. This means that if the bill was passed, transactions with TikTok and ByteDance would be banned. Notably, the bill leaves open the possibility to expand the prohibitions in the future, because other foreign social media companies could potentially satisfy the security criteria. It also states that in invoking IEEPA in this case, the president would not be subject to two limitations in the law — one requiring the declaration of a national emergency and the other preventing the president from prohibiting transactions that relate to informational materials.
Key Takeaways
The One-Liner: Businesses and investors should prepare for greater, continued impacts from US technology security policy, while policymakers should clearly delineate risks as the public faces the prospect of a reattempted TikTok ban.
The Paragraph — for Businesses: If this bill passed and the president invoked IEEPA to ban TikTok, without successful legal challenge, it would prohibit US companies from engaging in transactions with TikTok and ByteDance. This would force a range of advertisers, analytics companies, and other businesses with relationships with TikTok or ByteDance in some form to terminate them. Regardless of its immediate prospect for passage, the bill’s introduction should also compel US companies to assess whether or not they interact with TikTok or ByteDance as part of their data or software supply chains. Businesses should also understand the security criteria and definitions in the bill — because they serve as a point of reference for other bills and policies, and if the bill passed, this TikTok and ByteDance ban could theoretically be expanded in the future to other foreign social media companies.
The Paragraph — for Investors: Different elements of the US government are pursuing a range of actions to address security concerns about foreign technology companies, products, and services. This bill to completely ban TikTok, for example, was introduced as the interagency Committee on Foreign Investment in the United States (CFIUS) — which screens foreign investments for national security risks — is reportedly negotiating with TikTok on a risk mitigation agreement. More and more foreign investments in US companies are potentially falling under the scope of CFIUS reviews, and ByteDance’s 2017 acquisition of US company Musical.ly (which it then integrated into TikTok) is just one prominent example of how data, privacy, cybersecurity, and geopolitics play a significant role in these review considerations. A bipartisan bill proposing to ban TikTok should make clear to investors that US government policy in this area will only continue to impact the investment landscape with greater speed and scope.
The Paragraph — for Policymakers: The proposed responses to security concerns about TikTok vary widely, ranging from partial bans that would target usage by specific demographics (e.g., the users of US government-issued devices) to complete bans whose backers perceive no reasonable way to mitigate the risks. As these proposals evolve, on TikTok and beyond, policymakers must remember the importance of clearly delineating between distinct security risks, clearly linking specific risks to proposed responses, and clearly and publicly articulating their cost-benefit analysis. US security reviews of foreign technology issues, from investments to data entanglements, are going wide, which makes credibility with companies, the public, and even other governments all the more critical.
The Paragraph — for the Public: Former President Trump’s TikTok ban is not over. While the executive order he signed to prohibit transactions with TikTok was overruled in the courts and then revoked by President Biden, other policymakers — including members of Congress — remain intent on banning TikTok use in the US writ large. The same outcome could very well result. And looking forward, government concerns about Chinese government data access, content manipulation, and technology influence broadly are not going away. So long as those concerns persist, so too will attention to foreign technology companies, products, and services like TikTok, even if many Americans do not perceive there to be a significant risk.
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