Day: March 6, 2024

Forcing TikTok’s divestiture from the CCP is both reasonable and necessary

Washington, D.C. – Yesterday, a bipartisan group of US House legislators introduced a bill that would force ByteDance Ltd. to sell its US version of TikTok or face massive fines and federal investigations. This would have big ramifications for the video-sharing app, which is estimated to have over 150 million users in the US.

In practice, HR7521 designates the popular social media application TikTok as a “foreign adversary controlled application,” invoking the government’s ability to force the firm into new ownership by any private, legal entity in the United States —  a full forced divestiture.

Yaël Ossowski, deputy director of the consumer advocacy group, Consumer Choice Center, responded:

“In recent years, the default mode for the federal government has been to wage a regulatory war against American tech companies, all the while leaving the Chinese Communist Party-linked app TikTok to grow uninhibited,” said Ossowski. “While consumers generally do not want wholesale bans on popular tech, considering the unique privacy and security concerns implicit in TikTok’s ownership structure as well as its accountability and relationship to the CCP, the solution of a forced divestiture is both appropriate and necessary.”

Reports have already revealed that European TikTok users can, and have, had their data accessed by company officials in Beijing. The same goes for US users. Given the ownership structure of TikTok, there isn’t anything that can be done about this to shield American consumers from privacy violations. A forced divestiture would bring TikTok under the legal authority of the US and thus alleviate many of the concerns that consumers have about their security on the app. 

We praise Reps. Gallagher and Krishnamoorthi for spearheading this effort in a constitutionally nuanced and legal way that does not risk furthering the anti-tech attitudes of so many in Washington,” concluded Ossowski. “Upholding consumer choice is among our core principles, as is ensuring that the ethos of liberal democracies continues to guide the arc of technological progress.

READ: The best answer to TikTok is a forced divestiture 

The CCC represents consumers in over 100 countries across the globe. We closely monitor regulatory trends in Washington, D.C., Ottawa, Brussels, Geneva, and other hotspots of regulation and inform and activate consumers to fight for  Consumer Choice. Learn more at consumerchoicecenter.org

Biden’s ‘Junk’ Fees Rule Will Not Help Consumers With Credit Card Debt

A rule released today by the Biden Administration and federal regulators at the Consumer Financial Protection Bureau (CFPB), to cap credit card late fees at $8 is of great concern to the Consumer Choice Center (CCC). Any intention to improve the consumer experience through well-informed and economically sound regulation is commendable, but this new rule is anything but. 

“The CFPB argues that the 55 million consumers who are charged late fees on credit cards each year stand to now save up to $220 per year. This talking point from the administration completely ignores how consumers will be more incentivized to spend beyond their means and increase their overall debt levels,” said Dr. Kimberlee Josephson, Professor of Business at Lebanon Valley College and a Research Fellow with the Consumer Choice Center. 

Unintended consequences will follow this new Biden Administration rule, such as higher credit card interest rates, less availability of credit, and higher annual fees. By specifically targeting large credit card issuers with more than 1 million accounts, where roughly 95% of the total outstanding credit card debt is held, the regulation will inadvertently harm the very consumers it claims to protect. 

As Dr. Kimberlee Josephson wrote at FEE.org [Foundation for Economic Education], similar financial regulations on fees in recent history resulted in, “90 percent of banks raising their costs for consumers and restricting rewards programs for patrons, to make up for the loss incurred by the interchange fee caps. Consumers who previously enjoyed accruing points or getting cashback on their purchases were now unable to do so. Many banks did away with free checking accounts, which hurt lower-income households the most.”

As advocates for consumer choice and market-driven solutions, the Consumer Choice Center supports a balanced regulatory approach that takes both economic reality and consumers’ financial well-being into account. Consumers deserve a competitive credit market with clear and transparent terms, as well as broad availability of credit with dynamic rewards programs and fair interest rates. 

“The more the government meddles in the financial sector, the less market-driven the system becomes for consumers. This may be good short-term politics for President Biden, but sound economics don’t change, and consumers will pay more in the long run,” concluded Dr. Josephson. 

Scroll to top