A ban is imminent: USA launches new attempt at Tiktok sales

A ban is imminent
USA launches new attempt at Tiktok sales

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It’s the second attempt: Democrats and Republicans are once again voting for a law that could lead to the ban of Tiktok in the USA. This time the chances are better. The goal is to bring the app, which is particularly popular among young people, under American control.

The US House of Representatives has again voted for a law that would bring the popular Chinese short-video app Tiktok under American control. The House of Representatives in Washington adopted the bill with a large bipartisan majority. The law could lead to Tiktok being banned from American app stores if the service remains owned by the Chinese company Bytedance. The draft stipulates a nine-month deadline for a sale. US President Joe Biden can extend this by another three months.

Tiktok is the only internationally successful online platform that does not come from the USA. Bytedance is viewed across all parties in the USA as a Chinese company that must bow to the will of the Chinese Communist Party. The US House of Representatives had already approved a similar draft in March, which envisages a deadline of six months for the sale, which some have criticized as being too short. This is currently stuck in the Senate.

The new TikTok draft is part of a multi-part package in the US House of Representatives that combines several Republican priorities and is also intended to make new aid possible for Ukraine, which is attacked by Russia. It is therefore certain that the draft will now quickly pass the Senate, in which US President Joe Biden’s Democrats have a majority. Biden had made it clear in the past that he would sign a corresponding TikTok law. However, it is unclear whether, as in previous cases, US courts could torpedo the plans.

Biden is in a quandary

The law puts Biden’s Democrats in a quandary: On the one hand, the president wants to take a tough position towards China, and on the other hand, the app is popular among young users, whose votes he needs for re-election in November. Biden’s campaign team only opened a Tiktok account this year. Extending the deadline for a change of ownership at Tiktok would at least move the showdown to after the presidential election in early November.

Tiktok always rejects concerns and emphasizes that it does not see itself as a subsidiary of a Chinese company. Bytedance is 60 percent owned by Western investors. The company headquarters are on the Cayman Islands in the Caribbean. Critics counter that the Chinese founders, with a share of 20 percent, maintained control thanks to higher voting rights and that Bytedance has a large headquarters in Beijing.

According to its own information, Tiktok has 170 million users in the USA. During his term as US President, Donald Trump tried to force a sale of Tiktok’s US business to American investors with threats of a ban. But the plan failed primarily because US courts suspected the plans for a Tiktok ban to violate the freedom of speech enshrined in the US Constitution. A current law in the state of Montana that was supposed to ban Tiktok from the app stores there is also on hold. Trump has now backed away from calls for a ban. Tiktok is an important counterweight to Facebook, which he sees as an “enemy of the people,” Trump said in an interview.

Unclear who should buy Tiktok

Tiktok boss Shou Chew wants to defend himself against the US law. The company will do everything possible and use legal means to defend the platform, he said. Tiktok insists that the goal of the law is to ban the app in the US.

It is unclear who could buy Tiktok. The big tech companies are unlikely to be an option for competitive reasons. Former US Treasury Secretary Steven Mnuchin announced in March that he was organizing a group of investors to buy Tiktok. His plan is to reprogram the app in the US using US technology.

The draft approved by the House of Representatives contains other points, including sanctions on Iran. It also provides for the seizure of Russian assets. The text instructs US President Biden to set up a Ukraine support fund. Biden should therefore work with partners to develop a mechanism that makes it possible to use the frozen Russian assets.

In total it is hundreds of billions of US dollars. The USA in particular has recently repeatedly put pressure on Russia to make greater use of Russian assets. The European G7 states, including Germany, view this critically. The US controls only a tiny fraction of the frozen assets. The majority is in the European Union.

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