What is Going On?
On March 5, 2024, a bipartisan effort by the Chairman and Ranking Member of a House Select Committee introduced1 a bill known as The Protecting Americans from Foreign Adversary Controlled Applications Act2. The purpose of the bill is to prevent app store availability or web hosting services in the United States for any ByteDance-controlled apps, such as TikTok, unless the app or web host cut ties with ByteDance. If enacted, this bill requires ByteDance to divest from TikTok and other apps/web services within six months or face a ban on app stores such as Apple and Google. If the app stores do not comply3, a civil penalty would be imposed.
On March 7, 2024, the first step of the bill passed unanimously4 in the U.S. House Energy and Commerce committee, allowing the bill to be voted on the House floor by all U.S. Representatives. Shortly after the bill was passed by the committee, President Biden signaled that he would sign5 the legislation if it were to arrive on his desk. The reality of the bill ending up on President Biden’s desk got a boost on March 13, 2024, when the bill was voted on the House floor, passing6 with bipartisan support, 352-65, with one member voting present. The current state of the bill sits in the Senate awaiting a vote. Should the bill pass the Senate, it will be delivered to President Biden and will be expected to be signed, starting the clock on the 165 days before the law is enacted. If the bill is signed into law, expect a legal response by ByteDance to block the ban.
Why Now?
This is not the first time a ban has been talked about. In February 2023, President Biden’s office issued an Executive Order7 banning the use of TikTok on all federal government devices. 39 states have already banned8 the use of TikTok on state-issued devices due to privacy and security concerns. Montana made headlines in 2023, when the state voted to outright ban TikTok, but the law was blocked by a federal judge after TikTok sued the state. These bans are not just isolated to the United States9. The European Union, Canada, India, Taiwan, Pakistan, and Afghanistan have all issued bans, ranging from just government devices to full country bans.
So, what is the reason for the latest legislation? U.S. officials10 are worried that ByteDance, a Chinese owned company, could easily hand over the personal information and data of more than 170 million Americans to the Chinese government. The House committee responsible for bringing the bill forward has already passed a bipartisan House Resolution11 that “recognizes the national security risks by foreign adversary controlled social media applications” due to data collected by TikTok.
What is the Immediate Impact?
If the bill passes the Senate and is signed by President Biden, no impact will be seen for at least 165 days. On top of that, ByteDance will challenge the legality12 of the bill and the courts could delay the official start date of the law. The six month timetable gives content creators and advertisers time to shift platforms and divert dollars and resources as needed. One important area of distinction the Butler/Till Social Team wants to make clear, this is not a ban on TikTok, but a ban on ByteDance.
All the issues surrounding a “TikTok Ban” can be negated if ByteDance chooses to divest from TikTok and sell to an interested party. Several high-profile names have come forward expressing interest in purchasing TikTok, such as Shark Tank’s Kevin O’Leary13 or former Treasury Secretary Steven Mnuchin14.
Impact to Creators and Butler/Till Clients
If the bill passes, and ByteDance refuses to divest from TikTok, many creators and Butler/Till clients will need to shift from TikTok to other platforms. Most creators already operate on Instagram, YouTube Shorts, Snapchat, Reddit, and X. Butler/Till clients currently activate cross-platform, where many of the assets used on TikTok are also used on Instagram, Snapchat, and YouTube. Content creators and Butler/Till clients alike will need to navigate losing a platform that has success with mass reach. However, if ByteDance does sell their stake in TikTok, then content creators and Butler/Till clients will be able to operate business as usual.
The Butler/Till Social team is closely monitoring the situation as it makes its way through the Senate. For now, it is important to remember that TikTok is still live and a way to effectively reach audiences at an affordable price. We will provide more guidance as more details become available.
Sources:
