Tick Tock Clock Ticking For TikTok

Legislation requiring the social media app’s Chinese owners to divest sailed through Congress, capped by Senate passage late Tuesday as part of a larger foreign-aid package. President Joe Biden plans to sign it Wednesday — beginning a 270-day countdown for a sale or a US prohibition of the popular video-sharing platform.

Bloomberg reports TikTok and Beijing-based ByteDance Ltd. have vowed to do all they can to stop the measure. They’ve argued it infringes the free-speech rights of the app’s 170 million monthly US users and plan to file suits to void the law or at least delay its enforcement.

Biden’s signature will cap years of scrutiny in Washington, where regulators and lawmakers from both parties have voiced increased concern that TikTok’s Chinese ownership poses a risk to US national security. Proponents of the bill claim that China’s government uses TikTok as a propaganda tool and could demand that ByteDance share US users’ data — allegations the company and officials in Beijing have denied.

With the legal battle set to unfold, TikTok’s US users face a wave of uncertainty about a place to express themselves via video, make money as influencers or sell wares on TikTok Shop. If implemented, a TiKTok ban would risk disrupting “a critical channel for engaging with younger audiences and building brand visibility,” said Damian Rollison, director of market insights at SOCi.

“TikTok’s unique format has allowed businesses to showcase products and services creatively, leveraging trends and user-generated content to connect with potential customers,” Rollison said.

TiKTok has invoked economic arguments against the law, saying content creators and merchants who make a living from posting videos and selling goods would be hurt financially. While many US lawmakers who backed the newly passed federal bill think it would survive court review, some rights groups say the First Amendment will be a more difficult hurdle to clear.

ByteDance sees a TikTok divestiture as a last resort, according to people familiar with the matter. TikTok’s parent expects it can get a restraining order on the legislation, then wage a legal battle that could last more than a year, Bloomberg has reported.