'It's a dangerous precedent to set': TikTok plans lawsuit as House set to go for a vote to block it if stakes are not divested

WASHINGTON, DC: A proposed US law might ban TikTok unless its Chinese parent company, ByteDance, cuts its ownership stake.

TikTok has planned to fight the ban in court citing First Amendment rights. In March, Joe Biden said he would sign the ban into a law, if passed. 

Why does the US want to ban TikTok?

The legislation concerning TikTok was part of a package endorsed by lawmakers which included $61 billion in foreign aid for Ukraine along with additional funds for Israel and Taiwan.

The House of Representatives cast their votes first on the future of TikTok with a 360 to 58 majority in favor of the updated divest-or-ban bill. The Senate is anticipated to vote on the bill on Tuesday, April 23. 

US lawmakers and regulators have raised concerns that TikTok, along with its parent company ByteDance, could potentially expose sensitive user data such as location details to the Chinese government.

They cite legislation that permits the Chinese government to covertly request data from Chinese firms and nationals for intelligence collection purposes, reports the New York Times. 

TikTok, on the other hand, insists it would not provide foreign user data to the Chinese government.

How is TikTok reacting to the potential ban?

Michael Beckerman, TikTok’s head of public policy for the Americas, wrote in a memo to the company’s staff over the weekend.

He said, “At the stage that the bill is signed, we will move to the courts for a legal challenge."

The bill is a “clear violation” of the US Constitution’s First Amendment and would have “devastating consequences” for the seven million small businesses on the platform, according to Beckerman.

“We’ll continue to fight. This is the beginning, not the end of this long process,” Beckerman wrote in the memo, The Information reported. 

Beckerman also criticized the TikTok divest-or-ban bill as “an unprecedented deal worked out between the Republican Speaker and President Biden.”

Who owns ByteDance?

TikTok has stated that ByteDance "is not an agent of China or any other country."

Furthermore, ByteDance maintains that it is not a Chinese company, highlighting that global investment firms hold a 60% ownership stake.

In March, the US House of Representatives voted to require ByteDance to divest TikTok to non-Chinese entities within six months or face a ban in the US.

Following negotiations with the Senate on the issue, the House included a modified version of the legislation in the foreign aid package.

“If they pass it, I’ll sign it,” Biden said at the time when asked by reporters about the legislation, as per Associated Press.

ByteDance, established in 2012 by a Chinese entrepreneur, initially launched the short video app Douyin in China. The following year, it introduced TikTok, the international version of the app.

The social media application faced a ban in China, yet it amassed a billion users over five years.

Currently, it operates under a limited liability company situated in Los Angeles and Singapore while ByteDance holds the ownership.

Although the founders of ByteDance hold only a 20% share, it constitutes the controlling stake in the company. Institutional investors, including prominent US firms like General Atlantic, Susquehanna, and Sequoia Capital, own approximately 60% of the shares, according to the BBC.

The rest of the 20% is held by employees globally and three out of the five board members are Americans.

How is the internet reacting to the TikTok ban?

Even though many reacted that the US should ban TikTok many said it was not good.

"What does the US really have against tiktok?" asked a user on X. "TikTok suing for the right to keep us entertained? Now that's a plot twist!" wrote one more.

"I’m not a fan of TikTok but even I don’t think this is a good idea to ban it I mean, I may have grapes with it, but people make a living off of TikTok," wrote another. 

Yet one said, "I find it interesting that China has alot of US sites banned in their country, but they're doing this. I hope they lose & tiktok gets banned."

"Banning the app would do nothing, theres more apps and services that can do equal or more harmful data collecting," one user wrote.

"It's a dangerous precedent to set. Hopefully this ban never goes through," wrote one more. 

 

 

 

 

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