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.

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