What Happened:
Concerns over TikTok’s parent company’s “ByteDance” connection to the Chinese government led to the House of Representatives voting to ban TikTok from American social media. This caused a large backlash, including the app itself creating a notification where it sent the user the option to call their representative in an effort to prevent the ban. It created odd alliances as both Democrats and Republicans chose alliances on whether to ban or keep the app.
The bill itself gives Bytedance the choice to divest from the app or face a ban in the United States. This created a number of concerns about freedom of speech and access to information, which will be discussed in the Senate as they have promised to go over the legal perspective of the ban.
However, there is an opportunity that Steven Mnuchin, former U.S. Treasury Secretary, has come up with. “I think the legislation should pass, and it should be sold,” he said in an interview on Thursday. “It’s great business, and I am going to be putting together a group to buy TikTok.”
The Details:
Data collection over the internet has been a concern of the U.S. government for some time. Tiktok’s CEO has made trips to the U.S. to defend the app and attempt to prevent the app from being banned. The FBI has labeled it a threat to national security and the private information of American’s, while lobbyists claim that the app has broad support among women and minority owned businesses.
In a letter to Tiktok’s CEO, Chairman of the Select Committee on the Chinese Communist Party (CCP) Representative Mike Gallagher (Wi-R) demanded that “Tiktok stop spreading false claims in its campaign to manipulate and mobilize American citizens on behalf” of the CCP. Currently, the Biden administration has shown a willingness to sign off on the legislation if it passes.
The uncertainty for the investor group comes from not knowing whether the Chinese government would permit a sale to a U.S. buyer. The CEO of TikTok, Shou Zi Chew, has indicated that a sale is not an option, but if forced by legislation, that could potentially change. ByteDance was put at $220 billion at its last funding round for 2023.
What’s Next:
Ultimately, the Senate will be the deciding factor in what happens with TikTok. The algorithm is incredibly sophisticated and tailored to users, but it was also developed in China, meaning that a sale would likely not include the algorithm.
Multiple groups have come together to try and prevent the ban, including an effort from TikTok, which gave users the option to call their representative through the app. Senators and Representatives are concerned that it could influence Americans’ favor of the CCCP as well as provide the Chinese with private information that is unprotected on the TikTok platform.
While the bill will likely move slowly in the Senate, the fate of TikTok is unknown. There is the potential for it to fail since many senators will likely face backlash from younger voters, but many have shared concerns over the legality of banning it.
More information on the ban is here.
