SUPERNEWS

Opinion

TikTok Sale Push: Bipartisan Move Amid Security Fears

By Mackenzie Crow

ᐧ

4/23, 22:45 EDT

Key Takeaway

  • U.S. House passes bill (360 to 58) potentially banning TikTok unless sold by ByteDance, amid bipartisan concerns over CCP data access.
  • Potential buyers for TikTok include tech giants and investment groups, with ByteDance's valuation at $220 billion, complicating acquisition efforts.
  • Legislative push reflects bipartisan consensus on national security risks of foreign-owned apps, highlighting challenges in balancing security with global business innovation.

Bipartisan Push Against TikTok's Chinese Ownership

The U.S. House of Representatives has passed a bill with overwhelming support (360 to 58) that could lead to a ban on TikTok unless its Chinese owners, ByteDance, sell the app to a non-Chinese entity. This move is part of a broader effort by the U.S. government, including demands from the Biden administration, to mitigate national security concerns associated with the Chinese Communist Party's (CCP) potential access to data on TikTok's 1.5 billion active global users. The concerns extend beyond data privacy to the content promoted on the platform, which has been criticized for its potential to harm American youth and amplify harmful ideologies.

Rep. Ritchie Torres (D-Bronx) emphasized the bipartisan resolve against the CCP's influence through TikTok, highlighting the urgency to protect young Americans from the platform's negative impacts. Senate Majority Leader Chuck Schumer also voiced support for a U.S. acquisition of TikTok, framing it as a matter of national privacy and security.

Legislative Ties to Foreign Aid and Potential Buyers

The TikTok divestiture mandate is intricately linked to a substantial $95 billion foreign aid package for Ukraine, Israel, and Taiwan, showcasing the complex political landscape surrounding this issue. Wall Street investment bankers and high-profile individuals, including former U.S. Treasury Secretary Steven Mnuchin and former Activision CEO Bobby Kotick, are reportedly forming investor groups to explore the acquisition of TikTok. Potential buyers include tech giants like Microsoft, Meta, Apple, and Oracle, as well as companies like Rumble. ByteDance's recent valuation by an Abu Dhabi AI firm at around $220 billion, down from a peak of $460 billion, underscores the financial stakes involved.

Challenges and Considerations for Potential Acquirers

The Biden administration's push for ByteDance to divest TikTok has reignited debates over the app's future in the U.S. market. Analysts and experts point out the limited pool of potential buyers due to the high valuation of TikTok, estimated at $50 billion or more, and the regulatory and operational challenges of decoupling the app from its Chinese parent company. Antitrust scrutiny, especially for tech giants, and the complexities of managing a social media platform's content, add layers of difficulty to any potential acquisition. The Chinese government's stance and the approval process for any deal further complicate the situation.

Employee Morale and Company Response

The ongoing uncertainty and political scrutiny have impacted employee morale at TikTok, with concerns about the app's future and its operational independence. TikTok's leadership has communicated to employees that divestment would not address the U.S. government's security concerns, emphasizing efforts to secure U.S. user data through domestic servers and third-party monitoring. TikTok's head of public policy for the Americas, Michael Beckerman, reiterated the company's stance that divestment is not a solution to national security concerns, advocating for a broader industry dialogue on data security and privacy.

Street Views

  • Brian Wieser, Independent Consultant (Neutral on TikTok):

    "TikTok has a lot of baggage, and that baggage means that it’s hard to make this a reality."

  • Glenn S. Gerstell, Senior Adviser at the Center for Strategic & International Studies (Neutral on TikTok's potential sale):

    "It’s much more fraught on all levels on the economics of it... TikTok now has two years of user growth, it’s far more entrenched in terms of its position in American social media, and clearly the tensions with China have greatly increased."

  • William J. Baer, Former Head of the Justice Department’s Antitrust Division (Neutral regarding tech platform dominance concerns related to TikTok's acquisition):

    "I think the whole concern with tech platform dominance would be a factor in what buyer or buyers would be acceptable... A tech platform would legitimately have to think about the antitrust risk of buying something that, while not directly a competitor, would be seen as expanding the dominance of that platform in the tech space."