A federal appeals court ruled Friday that the federal government can tell a foreign-owned website that it must either sell itself to an American owner or be banned.
TikTok is one of the most popular social media sites on the planet, with more than a billion monthly active users worldwide and 170 million in the United States. Both Democrats and Republicans have long complained that the app—owned by ByteDance, a company based in China—is a potential vector for Chinese propaganda.
Much of the controversy stems from the level of control that the People’s Republic of China (PRC) demands over the private companies operating within its borders. The theory goes that Beijing could force ByteDance to turn over TikTok user data, or manipulate user algorithms to promote content favorable to the Chinese Communist Party.
Given China’s well-earned reputation as a repressive state, those could conceivably happen—though the key word there is conceivably. While many lawmakers have insisted that TikTok is an active national security threat, they have presented no evidence for this, at most claiming to have seen classified information that affirms their warnings.
During his first term, President Donald Trump threatened to ban TikTok outright unless it were purchased and operated by an American company. (Trump has reversed course since leaving office, now promising to “save” the app.) And this year President Joe Biden signed the Protecting Americans from Foreign Adversary Controlled Applications Act. Singling out TikTok and ByteDance by name, the law made it functionally illegal for “a foreign adversary controlled application” to operate within the United States, or for any other entity to provide “internet hosting services to enable the distribution, maintenance, or updating” of the app.
The law defined the term “controlled by a foreign adversary” to include not only companies owned wholly by Chinese entities but also one in which a citizen of an adversarial nation “directly or indirectly own[s] at least a 20 percent stake.” In other words, even if the overwhelming majority of a company’s shares were owned by Americans, it could be banned or forced to divest so long as the remaining shares were held by Chinese, Russian, or Iranian citizens.
In order to continue operating within the United States, the only recourse would be to sell TikTok to an American company by January 19, 2025—Joe Biden’s last full day in office.
Hellbound and Down 