TikTok users could soon find that the popular social media service is either under new ownership or, although it wouldn't happen immediately, outright banned in the U.S.
On Saturday, the House passed legislation that would bar TikTok from operating in the U.S. if the popular platform's China-based owner doesn't sell its stake within a year. The bill will next head to the Senate, where it is expected to pass, buoyed by its attachment to a larger foreign aid package for Ukraine and Israel that has gained bipartisan support.
TikTok has attracted unwanted scrutiny not only for the addictiveness of its constantly scrolling videos, but also due to its Chinese owner, ByteDance. That has raised concerns among lawmakers and security experts that the Chinese government could tap TikTok's trove of personal data about millions of U.S. users.
Meanwhile, TikTok has asked its users to contact their lawmakers to argue against the bill's passage, an effort that appears to have failed to sway opinions in Washington, D.C., noted Eurasia Group director Clayton Allen.
As of last week, TikTok was actively encouraging its users to contact their lawmakers through push notifications, warning that the bill could potentially infringe on their constitutional right to access the platform.
"It's a low-cost exercise if you have access to the user base," Allen shared with CBS MoneyWatch. "But it seems like it has backfired."
Some lawmakers expressed concerns about TikTok's ability to send mass push notifications to its users, especially considering a significant portion of them are minors, highlighting the potential risks associated with the app.
In response, TikTok stated that it is "unfortunate" that lawmakers are leveraging important foreign and humanitarian matters to push forward a bill that could impede the free speech rights of millions of Americans, harm numerous businesses, and close down a platform that contributes billions to the U.S. economy annually.
Here's a breakdown of what might unfold next regarding the TikTok bill.
When can we expect the Senate to vote on the TikTok bill?
The Senate is anticipated to address the bill either on Tuesday or possibly Wednesday, according to CBS News congressional correspondent Scott MacFarlane.
President Joe Biden has signaled his willingness to sign the bill, which primarily focuses on providing foreign aid to Ukraine and Israel.
Why is Congress Pushing to Ban TikTok?
Congress is pushing for ByteDance to divest its stake in TikTok. If this doesn't happen, the proposed legislation would ban the popular social media app in the United States.
Lawmakers are expressing growing concerns about the company's connections to China, worrying that ByteDance or TikTok might share American users' data with the Chinese government.
"The thought of providing the Communist Party with such a powerful propaganda tool, along with access to the personal data of 170 million Americans, poses a significant national security threat," Senator Mark Warner, a Democrat from Virginia, mentioned on CBS' "Face the Nation" program.
What is the Potential Timeline for a TikTok Sale or Shutdown?
If the bill is approved, TikTok's parent company would have nine months to facilitate a sale, with the option of a three-month extension, as per a draft of the bill disclosed earlier this month.
However, according to Allen from Eurasia Group, this nine-month period would end around mid to late January, potentially coinciding with the presidential inauguration. Should former President Donald Trump secure a victory in November, he may pursue a different approach towards TikTok, the analyst suggested.
"The potential sale of TikTok may become a question for the next administration," Allen speculated. "Analyzing the language of the bill, it's uncertain if Trump would feel as obligated to follow the desires of the Biden administration. He could potentially use it as a bargaining chip in negotiations with China."
Who are the potential buyers if TikTok is sold?
Probable bidders could include Microsoft, Oracle, or various private equity groups, as suggested by Wedbush Securities analyst Dan Ives.
Nevertheless, Ives believes that ByteDance would be hesitant to part with TikTok along with its fundamental algorithms, which are crucial software responsible for offering video recommendations to users based on their preferences and viewing patterns.
"The value of TikTok would undergo a significant change without the algorithms, making the eventual sale or divestiture of TikTok a highly intricate process, with numerous potential strategic and financial bidders eagerly awaiting the commencement of this procedure," Ives stated in a research report.
Could other social media platforms gain from this legislation?
Rivals like Meta could potentially benefit from the bill if it transforms into law, according to Ives.
Wedbush estimates that approximately 60% of TikTok users might transition to Meta's Instagram and Facebook platforms if TikTok were to cease operations in the U.S. Google could also see advantages, he added.
