ByteDance, the Chinese conglomerate behind TikTok, is bracing for the potential fallout from a new bipartisan bill aimed at banning TikTok in the U.S. This legislation not only targets TikTok but could also envelop the entirety of ByteDance's app ecosystem, which includes several rapidly growing applications within the U.S.
Key Details:
- The proposed TikTok divestment law, poised for Senate approval, uses broad language that could restrict any ByteDance-owned app in the U.S., necessitating the sale of such apps to U.S. entities to continue operations.
- The law identifies apps "operated, directly or indirectly" by companies headquartered in countries considered foreign adversaries, including China.
ByteDance's U.S. App Portfolio:
- Apart from TikTok, ByteDance offers various applications through U.S. app stores, such as the video editing tool CapCut and the photo editing app Hypic.
- It also operates under different developer names, offering apps like the AI homework helper Gauth and the social network Lemon8.
- SoundOn, linked to TikTok, supports artists in distributing and monetizing their music while retaining rights.
Wider Implications:
- ByteDance has diversified into numerous sectors globally, including e-commerce and AI, with products like the productivity suite Lark and cloud services through BytePlus.
- Entertainment ventures include 8th Note Press for publishing and initiatives in digital content production.
Legislative and Competitive Landscape:
The bill's broad scope means it could affect other foreign-owned apps in U.S. stores. For example, 26 of the top 100 apps are owned by companies from countries like China.
- Lawmakers assert the bill targets any digital platform controlled by nations posing a national security threat, not just TikTok.
- There's a clause exempting apps primarily focused on product reviews and retail, safeguarding apps like Shein and Temu from the ban.
Legal and Constitutional Challenges:
- The bill's broad language will likely strengthen its defence against potential constitutional challenges. However, if perceived as targeting ByteDance specifically, it could face legal hurdles under the Constitution's ban on bills of attainder.
- TikTok argues that the bill infringes on the First Amendment rights of its users, though supporters emphasize national security.
Looking Ahead:
- With the Senate's expected approval and President Biden's endorsement, ByteDance is gearing up for a significant legal challenge to maintain its presence in the U.S. market.
This situation places ByteDance at a critical juncture as it navigates complex legislative environments and reevaluates its strategy in the U.S., potentially reshaping the landscape for international tech companies operating in American digital spaces.