After being passed by both houses of Congress, this morning President Joe Biden signed into law a bill that would ban Chinese-owned TikTok unless it is sold within a year. The new law applies to any social media app owned by a foreign adversary that has more than 1 million yearly users in the U.S. With 170 million American users, Chinese-owned TikTok definitely fits that bill.
It is the most serious threat yet to TikTok’s future in the U.S., but don’t expect to see any changes to the app just yet. Here’s what we know:
Is TikTok shutting down?
No. The law states that ByteDance, TikTok’s Chinese parent company, must sell its stake in the app within 12 months otherwise it will be banned in the U.S. According to the bill, ByteDance has nine months to divest and find an American buyer for TikTok. After that, the president can push back the deadline by an additional 90 days.
In the meantime, users will likely not experience any changes on the app.
How long until the app would be banned?
While it’s unlikely, a potential ban would probably be several years from now. The earliest it would shut down is one year from now, assuming ByteDance doesn’t find an American buyer.
However, ByteDance previously said if the bill passed, it would block the implementation of the statute, which means any ban would be paused while under judicial review by the D.C. Circuit Court of Appeals. Once the court issues its ruling, whichever side loses is likely to request a review by the U.S. Supreme Court. That would lead to a further pause in the ban by another year, meaning nothing would likely go into effect until 2026. (And that’s only if ByteDance refuses to sell.)
Following Biden’s announcement, TikTok CEO Shou Zi Chow posted a video response, calling it a “disappointing moment” and reiterating the company’s commitment to legally challenge the law.
“This unconstitutional law is a TikTok ban, and we will challenge it in court,” the company wrote in a Wednesday statement on X following Biden’s signing. “This ban would devastate seven million businesses and silence 170 million Americans.”
If ByteDance does sell, who is most likely to buy TikTok?
The bill states that TikTok can continue to operate in the U.S. if ByteDance sells the app to a U.S.-approved company, which means there are a wide array of options. Major U.S. tech companies like Microsoft have been rumored to have interest, but the Biden administration has stated they have no interest in expanding the already massive power and influence of such companies.
This leaves room for outside groups to jump in. Former Treasury Secretary Steve Mnuchin, for example, has sought to make a bid, and has already put together an investor group. The Wall Street Journal also reported that former Activision Blizzard CEO Bobby Kotick was looking for potential partners to pursue it.
It comes down to who will have the right price point. ByteDance is worth hundreds of billions of dollars, but TikTok would fetch less than that, experts say — especially if it is sold without its powerful recommendation algorithm. And that’s assuming ByteDance agrees to sell at all.
How did we get here in the first place?
U.S. lawmakers have been concerned about TikTok for several years. In August 2020, President Trump signed an executive order that tried to ban the app after TikTok users used it to coordinate disruptions to his campaign rallies.
In the years since, Congress worried that TikTok could be pressured by the Chinese government to hand over personal information of its American users, potentially facilitating targeted misinformation campaigns or providing China with intelligence targets.
“How can we ban TikTok among ourselves and not ban it for our children? That is the moral question of today and of our time,” said Foreign Affairs Committee Chairman Michael McCaul. “TikTok is a modern-day Trojan horse of the [Chinese Communist Party] used to surveil and exploit Americans’ personal information… In other words, it’s a spy balloon in your phone.”
The current law was passed so quickly because it was tucked into a larger spending bill providing emergency financial aid to Israel, Ukraine and Taiwan. The Senate passed it on Tuesday evening, and Biden signed it into law on Wednesday morning.
