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Major blow to China's TikTok as US Senate passes bill forcing parent company ByteDance to sell or face ban

The US Senate passed legislation that would require Chinese owner ByteDance to divest TikTok's US operations within about nine months or face a ban.

Edited By: Ajeet Kumar @Ajeet1994 Washington Updated on: April 24, 2024 9:16 IST
TikTok
Image Source : AP TikTok

Washington: In a major blow to the Chinese video app, TikTok, the US Senate passed legislation on Tuesday that would force the company to sell the social media platform under the threat of a ban. Several termed the US lawmakers's move contentious and is expected to face legal challenges and disrupt the lives of content creators who rely on the short-form video app for income.

The TikTok legislation was included as part of a larger $95 billion package that provides foreign aid to Ukraine and Israel and was passed 79-18. It now goes to President Joe Biden, who said in a statement immediately after passage that he will sign it Wednesday.

Bill against TikTok passed after tough negotiations with the Senate

A decision made by House Republicans last week to attach the TikTok bill to the high-priority package helped expedite its passage in Congress and came after negotiations with the Senate, where an earlier version of the bill had stalled. That version had given TikTok’s parent company, ByteDance, six months to divest its stakes in the platform. But it drew scepticism from some key lawmakers concerned it was too short of a window for a complex deal that could be worth tens of billions of dollars.

What TikTok says

TikTok, which says it has not shared and would not share US user data with the Chinese government, has argued the law amounts to a ban that would violate America's free speech rights of its users. The company did not immediately comment but over the weekend, it told its employees that it would quickly go to court to try to block the legislation.

Read: New US bill aims to ban TikTok once again: Know-why

"We'll continue to fight, as this legislation is a clear violation of the First Amendment rights of the 170 million Americans on TikTok... This is the beginning, not the end of this long process," TikTok told employees on Saturday in an email seen by Reuters.

Notably, this is not the first time when the American government has tried to impose a ban on the Chinese company. In 2020, then-President Donald Trump was blocked by the courts in his bid to block TikTok and Chinese-owned WeChat in the United States.

TikTok divestment by early 2025 unlikely: Democrat 

The new legislation, however, is likely to give the Biden administration stronger legal footing to ban TikTok if ByteDance fails to divest the app, experts say. It also gives the White House new tools to ban or force the sale of other foreign-owned apps it deems to be security threats.

Read: TikTok's relationship with ByteDance, China and why US lawmakers want to ban it

The legislation gives ByteDance 270 days to divest TikTok with a possible three-month extension. Senate Commerce Committee Chair Maria Cantwell, a Democrat, said the timeline was reasonable. "This is not a new concept to require Chinese divestment from US companies," Cantwell said. "We are giving people a choice here to improve this platform."

But Democratic Senator Ed Markey said ByteDance was unlikely to be able to execute a divestment by early 2025, adding that a sale would be one of the most complicated and expensive transactions in history, requiring months if not years of due diligence. "We should be very clear about the likely outcome of this law. It's really just a TikTok ban," he said. "Censorship is not who we are as a people. We should not downplay or deny this trade-off."

(With inputs from agencies)

Also Read: China responds to US vote on TikTok ban: 'Resorting to hegemonic moves when one cannot succeed'

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