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Good riddance: TikTok’s headed to a forced divestiture

Earlier today, President Joe Biden signed the supplemental appropriations bill HR815 into law, which contains a targeted and limited forced divestiture of the social media app TikTok, previously passed by the US House in the form of the Foreign Adversary Controlled Applications Act.

The Chinese technology firm Bytedance Ltd. will have 270 days from today to undergo a qualified divestiture of TikTok, or otherwise face stiff fines and an eventual removal from domestic app stores.

The Consumer Choice Center has supported the forced divestiture of TikTok since at least 2020, when a similar proposal was introduced by then President Donald Trump via an executive order.

The version approved by both the US House and Senate, and signed into law by Biden, is much more targeted and respects the precedent of national security based forced divestitures, as we laid out here last year.

We applaud the efforts of the various members of both chambers, as well as President Biden, for following through on this reasonable and necessary measure to protect Americans from the unique privacy and security risk from entities tightly controlled by the Chinese Communist Party.

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. This latest law is a more appropriate use of government power, and will hopefully lead to increased competition and better data security practices among social media companies in the US and the world.

In our own view, it’s not necessarily that Bytedance should sell TikTok and its US ssets to an American company, though that is what this new law will require. Frankly, any legal change that would move its legal headquarters and governing charger to any liberal democratic country would be perfectly acceptable, as that would provide much more security and accountability to its hundreds of millions of users globally.

While this law represents a balanced measure of promoting appropriate tech innovation, data privacy, and consumer choice, we would be remiss if we did not address the mistaken notion that this is only the opening salvo in a general “war on tech”.

Rather, we believe the forced divestiture of TikTok is a unique and special case, isolated to the concerns that the link of the firm’s owners to the Chinese Communist Party presented. It is in no way a permission slip to engage in punitive antitrust or regulatory actions against our own tech firms that follow existing laws and provide benefits to hundreds of millions of consumers.

Consumers have been concerned about the specific data arrangements with Chinese-owned TikTok for some time, and this extraordinary case has now been handled used appropriate and constitutional measures. There have been varying interpretations of what this law would represent, including whether it would apply to other firms or services, and how it could potentially be abused by the current or future presidential administrations.

Thankfully, the law as written is clear, concise, and targeted specifically to this case. This is not something that can be said often.

While it’s a day to celebrate, and citizens in liberal democracies should rejoice, it should be seen more than anything else as an example of a successful campaign to rid a popular social media app of the foreign data risks that it posed to ordinary citizens. Nothing more and nothing less.

Good riddance.

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

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