House Bill Says Sell TikTok or Platform Will Be Banned

The House voted overwhelmingly to approve a bill on Wednesday that would ban TikTok from operating in the U.S. or force a sale, with lawmakers largely shrugging off a last-minute lobbying push by the Beijing-owned service and setting the stage for a final showdown in the Senate, where lawmakers have been cooler on the legislation.

Source: WSJ | Published on March 13, 2024

TikTok ban or sell to US company

The House voted overwhelmingly to approve a bill on Wednesday that would ban TikTok from operating in the U.S. or force a sale, with lawmakers largely shrugging off a last-minute lobbying push by the Beijing-owned service and setting the stage for a final showdown in the Senate, where lawmakers have been cooler on the legislation.

The measure passed the House 352 to 65, with one member voting present, showing broad bipartisan support for cracking down on TikTok over national-security concerns.

The popular short-video app has faced scrutiny over the way its algorithm works to select content for users, both on sensitive issues like teen depression as well as on contentious global debates like the Israel-Hamas war.  U.S. officials say TikTok’s Chinese ownership potentially gives Beijing a way to both collect data on Americans and influence public opinion, driving years of efforts to crack down on the app and culminating in the new legislation.

Opponents of the bill said the government shouldn’t be in the business of banning businesses and raised free speech concerns. They also said that TikTok has taken steps to address concerns about its ownership, including ensuring all U.S. user data is stored in an Oracle cloud, not overseas, and that fears about the service are overblown.

The legislation calls for TikTok’s parent ByteDance to divest itself or the platform will be banned from app stores and web-hosting services in the U.S.  ByteDance would have a little more than five months from the enactment of the bill to comply.

“This bill is not about censorship, it’s about the inverse of censorship, which is propaganda and foreign propaganda pitting Americans against Americans or deprioritizing certain hashtag subject matter that is problematic” for Beijing, said Rep. Mike Gallagher (R., Wis.) who wrote the bill with the White House and Rep. Raja Krishnamoorthi (D., Ill.).

Lawmakers and administration officials have expressed worries that Bytedance would give U.S. users’ data to China’s government. The company has said that it hasn’t gotten any such requests and wouldn’t comply if it did. Critics of the TikTok bill say the company is being unfairly singled out.

“This bill does not solve our data privacy problems and harms innocent users whose very livelihood and existence is supported by this app. Count me out,” said Rep. Maxwell Frost (D., Fla.), the youngest member of Congress.

The bill now heads to the Senate, where its fate is more uncertain. Asked how the chamber will handle the measure, Senate Majority Leader Chuck Schumer (D., N.Y.) has declined to say if he would bring it up for a vote. Schumer said he would consult with Democratic committee chairmen “to see what their views would be.” President Biden has said he would sign the bill if it got to his desk.

TikTok, accessed by more than 170 million Americans, has fended off past efforts to rein it in. In 2020, then-President Donald Trump tried to ban the app via an executive order. Courts blocked that attempt. In recent days the presumptive GOP presidential nominee has criticized the new legislation, indicating his position had flipped.

“There’s a lot of good and there’s a lot of bad with TikTok,” Trump said on CNBC.

A recent poll by the Associated Press and NORC Center for Public Affairs Research found 31% of U.S. adults saying they would favor a nationwide ban on TikTok use, while 35% say they would oppose that type of action.

To fight a potential ban, TikTok has spent millions on lobbying in Washington in recent years. Since 2019, parent ByteDance has spent roughly $21.3 million on federal lobbying, according to OpenSecrets, a nonpartisan platform tracking money in politics, and an analysis of lobbying disclosure forms by The Wall Street Journal.

The company could also challenge the legislation in court, arguing that it violates the First Amendment. After Montana banned the app last year, a federal judge blocked the state measure, citing free-speech concerns.

Still, TikTok was blindsided by the speed of the House legislation.  In a late effort to slow the measure’s bipartisan momentum, leaders of TikTok’s U.S. operations decided to create a notification that would pop up on the phones of some TikTok users. The notification let users enter their ZIP Codes and call their representatives to complain about the bill, a move that ended up overwhelming some offices’ phone lines. The effort might have backfired: Some lawmakers said the stunt underscored the power of TikTok to shape public opinion. A House committee advanced the bill with a 50-0 vote.

“TikTok went into panic mode,” said Rep. Ashley Hinson (R., Iowa) in floor debate Wednesday. “TikTok’s gross stunt proved our point,” she said. “What if on Election Day TikTok sent out an alert saying our elections were canceled, we must act now?”

TikTok chief executive Shou Zi Chew is expected to be at the Capitol meeting with senators this week, though some said their opinion couldn’t be swayed at this point. The company sees the legislation as an effective ban because separating the U.S. portion of its app through a sale or divestment wouldn’t be practical and would undercut the appeal of the content app.

Virginia Democratic Sen. Mark Warner, the chair of the Intelligence Committee, has wanted to ban TikTok for years and introduced his own legislation to do so. He seemed willing to support the House bill, though said he wanted more time to review it.

“I think there would have been ways when  you could have been more certain it would stand up to a legal challenge but this version may be better than earlier versions,” he said.

Several senators said they hadn’t yet received any new outreach from TikTok. The bill will fall under the jurisdiction of the Commerce Committee. “The committee’s hard to predict at this point,” said Sen. Shelley Moore Capito (R., W.Va.), a member of the panel.

ByteDance has expanded its own public policy team in recent years, as well as tapping the ranks of D.C. lobbyists, including such former members of Congress as former Senate Majority Leader Trent Lott (R., Miss.), former House Democratic Caucus Chairman Joe Crowley (D., N.Y.) and former Reps. Jeff Denham (R., Calif.) and Bart Gordon (D., Tenn.) according to public records.

ByteDance has also enlisted longtime Trump adviser David Urban, while former senior White House official Kellyanne Conway has advocated against banning TikTok on behalf of Club for Growth, a conservative group opposed to closing the video app. Conway has warned Republicans that TikTok has users in every district and a ban could trigger a backlash from voters, according to a person familiar with the discussions. She has also spoken with Trump about the complications of restricting TikTok, according to the person.

“We’ve consistently been up against a very formidable lobbying effort by TikTok,” said Kara Frederick, director of the Heritage Foundation’s Tech Policy Center. Heritage Action, the political sister organization of the conservative think tank, supports the House bill and is urging lawmakers to vote for it.

ByteDance also hired public affairs companies to help sharpen its message both to lawmakers and a broader audience. The company worked with Seven Letter, a bipartisan communications firm, on an extensive series of focus groups and polling both before and after Chew’s congressional testimony last year, according to someone familiar with the project. Seven Letter declined to comment on the project.

Lawmakers concerned about TikTok’s operations in the U.S. dismissed the efforts of the company’s lobbyists.

“You’re wasting your time,” Sen. John Fetterman (D., Pa.) said of his discussions with TikTok lobbyists. “I can smile and nod, but that’s not where my vote will be.”

 

Are you a retail Agent Looking for a Quote?