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TikTok sues the US government over law that could ban the app | TechCrunch


TikTok is suing the United States government in an effort to block a law that would ban TikTok if its parent company, ByteDance, fails to sell it within a year. The lawsuit, which was filed on Tuesday, argues that the bill violates the U.S. Constitution. TikTok argues that the law violates the U.S. Constitution’s commitment to “both free speech and individual liberty.”

“For the first time in history, Congress has enacted a law that subjects a single, named speech platform to a permanent, nationwide ban, and bars every American from participating in a unique online community with more than 1 billion people worldwide,” the lawsuit reads. “That law — the Protecting Americans From Foreign Adversary Controlled Applications Act (the “Act”) — is unconstitutional.”

The lawsuit comes two weeks after President Biden signed the bill, which included aid for Ukraine and Israel. The bill gives ByteDance until January 19 to sell the app or face a ban, bringing the possibility of a TikTok ban closer to reality than ever before.

TikTok argues that the U.S. government has not offered evidence to support its claims that the app poses risks to national security.

“The statements of congressional committees and individual Members of Congress during the hasty, closed-door legislative process preceding the Act’s enactment confirm that there is at most speculation, not ‘evidence,’ as the First Amendment requires,” the lawsuit reads.

TikTok goes on to say that the law is effectively seeking to ban the app, arguing that it is not possible to sell TikTok within the 270-day timeline it has been given.

“Petitioners have repeatedly explained this to the U.S. government, and sponsors of the Act were aware that divestment is not possible,” the lawsuit states. “There is no question: the Act will force a shutdown of TikTok by January 19, 2025, silencing the 170 million Americans who use the platform to communicate in ways that cannot be replicated elsewhere.”

Even if ByteDance wanted to sell the app, the Chinese government would likely block a sale because it would need to approve the transfer of the TikTok’s algorithms. TikTok goes on to state that a sale would be technologically impossible, as “millions of lines of software code” would need to be moved to a new owner. 

The lawsuit follows fours years of allegations from the U.S. government that TikTok’s ties to China pose a national security risk and that it exposes Americans’ sensitive information to the Chinese government. TikTok has denied these allegations and said it has spent $2 billion to protect the data of U.S. users.

Lawmakers have also argued that TikTok has the potential to sway public opinion by deciding what it shows to users in its ‘For You’ feed.

When the U.S. government was seeking to ban TikTok under the Trump administration, TikTok considered selling its U.S. operations to an American company. Potential candidates included Oracle, Microsoft and Walmart, but none of these deals came to fruition. This time around, reports have indicated that ByteDance would prefer to shut down TikTok rather than sell it.


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TikTok expands its premium ad slots despite potential U.S. ban | TechCrunch


In an effort to capture more ad dollars, despite the looming U.S. ban, TikTok is introducing new advertising products and opportunities that will allow marketers to better control what sort of content their ads appear against.

The company says it will use generative AI to curate trending, brand-safe content; expand its selection of “tentpole” moments, like the Paris Olympics and Met Gala; and allow advertisers to buy slots with specific networks and content offerings.

The company introduced the “Pulse Premiere” ad slot last year, and it is now adding new partners to it. The offering focuses on bringing in more premium ad dollars by letting advertisers position their ads directly after publisher and media content in over a dozen categories including lifestyle, sports, entertainment and education. The ads would appear on content from select publishers on the app’s ‘For You’ feed.

The slot is meant to appeal more to TV advertisers who are used to being able to buy ads that run alongside specific programs.

TikTok had earlier partnered with companies like NBCU, Condé Nast, DotDash Meredith, BuzzFeed, Hearst Magazines, Major League Soccer, UFC, Vox, and others. Now, it is adding Paramount Global and NHL to its list of Premiere partners.

The former partnership gave advertisers the option to buy ads that run alongside content from, for example, NBCU — think Saturday Night Live, America’s Got Talent, TODAY Show, Bravo, and others. The new partnership with Paramount Global, for instance, will let advertisers place ads against content from MTV, CBS Sports, The Daily Show, Entertainment Tonight, and more.

TikTok said it will also work with Nielsen ONE Ads and iSpot.tv to give advertisers the ability to measure how their TikTok ads add “incremental and complementary reach” to their TV campaigns, the company said.

TikTok is presenting these new ad options at this year’s IAB NewFronts 2024, where a number of media companies and social apps market themselves to advertisers. TikTok took the opportunity to share some stats on its ad offerings’ success, noting, for example, that the TikTok Pulse suite — which guarantees ads next to the top 4% of trending videos, seasonal moments, or premium content — increases ad recall by 9.8%.

The company also touted its ability to reach users who may not have seen TV ads, saying that 58% of all TikTok campaign impressions reached a unique audience “unexposed” to the TV portion of the campaign. Plus, it said advertisers who added TikTok to their TV campaigns reached an additional 22% of their audience.

TikTok’s announcement is seemingly business as usual for the company, since it represents deals that were finalized long before the U.S. ban went through, but the fate of the app’s future in the country is uncertain. Though the company’s parent, ByteDance, has vowed to fight the ban, it has also threatened to pull out of the country rather than divest. Obviously, that would not be great for its ability to bring in ad dollars.


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Will a TikTok ban impact creator economy startups? Not really, founders say | TechCrunch


President Joe Biden signed a bill on Wednesday that could ban TikTok – for real this time. After so many false starts and stops, some creator economy founders and their clients are rolling their eyes. They’ve been through this before.

“I think two years ago, this would have been devastating,” Karat Financial co-founder and co-CEO Eric Wei told TechCrunch. “Now… Eh.”

When creators succeed, the startups that work in the creator economy generally succeed as well. Still, Wei isn’t particularly concerned that the friction from a TikTok ban would impact his business, a Series B startup that provides financial services to creators.

“If you build products in startups that help creators make money, then actually, from an addressable market point of view, this is good for you,” Wei said. “Your framing can be like, ‘TikTok is gone, as a creator, you need to be thinking about diversifying and how to support yourself, so here’s XYZ things you can do.’”

The threat of the TikTok ban feels a bit like “The Boy Who Cried Wolf,” even though this time, it’s different. This isn’t just political theater in the form of ongoing Senate hearings. This bill, which would force ByteDance to sell TikTok if it can’t find an American buyer within nine months, made its way through the House and the Senate to Biden’s desk, where he signed it into law.

But the creator landscape looks different now than it did in 2020, when former President Donald Trump tried banning the Chinese-owned app (and, as he runs for president again, he now says he’s opposed to the ban, because it would give Meta too much power). Established creators have had about three years of legal back-and-forth and two different presidencies to prepare their businesses for a world without TikTok.

As Wei scrolls through a large group chat he’s in with other creators, he notes that no one’s too panicked.

“I’m looking through, and there’s some jokes – one guy jokes, ‘My Snapchat shares are about to pop,’ and another said, ‘Let’s make a skit: when TikTokers protest the TikTok ban – who’s in?’” he said. “A third says, ‘TikTok’s about to sue, I’ve been talking with their internals,’ and a fourth one replied, ‘Where’s my popcorn?’”

This isn’t the case for all kinds of creators. Wei notes that TikTok livestreamers and creators that monetize via TikTok Shop could be hit the hardest, since platforms like YouTube Shorts and Instagram Reels aren’t as invested in those features as TikTok. The ban could also be detrimental to politically-oriented creators, since Instagram Reels isn’t a viable alternative for them – the Meta-owned platform has begun limiting the reach of political content. And while the more established creators in Wei’s group chat have been preparing for this for years, the transition away from TikTok could be a huge gut-punch to newer creators who don’t have followings on multiple platforms yet.

“To be clear, no one’s like, ‘This is good for us!” Wei said. But the amount of time creators have had to prepare for this moment has made them better poised to weather the storm.

“This is something that’s been talked about for a very long time, so creators are aware – this is not new,” Harry Gestetner, co-founder and CEO of creator monetization platform Fanfix, told TechCrunch. “The second thing is, this is not an overnight ban. Creators still have about a year to transfer their following, so I am optimistic.”

James Jones – the CEO of Bump, another financial services company for creators – is looking at the situation in parallel.

“There will undoubtedly be a ripple effect amongst the creator community as a result of the TikTok ban,” Jones told TechCrunch. “But creators are getting better at diversifying the ways that they monetize across multiple platforms. We’ve also seen this movie before in the case of Vine, which paved the way for TikTok to fill the void that it left.”

TikTok’s secret sauce is its power to help creators get discovered – more so than other platforms, anyone can blow up on the For You Page. But while Instagram Reels and YouTube Shorts could have been likened to “Kirkland brand TikTok” in 2021, the platforms have since matured.

In TikTok’s initial Creator Fund, a static pool of money distributed among a growing number of eligible creators, few people were supporting themselves on TikTok views alone. This has only recently changed as TikTok transitioned creators into its Creativity Program, which offers a better deal to eligible creators – but not all creators are making videos that fit the bill for that program. So, to make content creation a stable career, they’d have to transition onto other platforms anyway. YouTube Shorts has started sharing ad revenue on short-form videos, similar to its longstanding Partner Program, while Instagram Reels only has occasional, unreliable bonus programs.

Gestetner told TechCrunch that some creators he works with have been disillusioned by TikTok anyway.

“The problems with TikTok go past just the ban,” he said. “Creators so often get their accounts removed on TikTok, or get shadow banned, or get reported, and it’s very difficult to get an answer from TikTok. So we’ve dealt with problems there for years now.”

It’s not as though other platforms don’t share these transparency issues. But these risks have made it essential for creators to not put all their energy into one platform.

“Five years ago, creators were generally on one platform,” he said. “Now, every creator has a minimum of three, and up to five, six or seven platforms they use.”

This necessity of diversification extends beyond just the platforms creators use. Creators also need to generate income from a variety of sources, whether that be through fan memberships, product sales, live performances or courses.

“I think on our business, there will be no impact, or potentially kind of a positive impact,” Gestetner said. “It helps our case, because creators are all skeptical of the big platforms, and they don’t want all of their monetization to be tied to a particular platform.”

In theory, the ban on TikTok could create room in the market for another short-form video app – perhaps one that is not owned by a massive corporation like Meta or Google. But this likely won’t pose another situation like what happened when Elon Musk bought Twitter, and several microblogging apps cropped up seemingly overnight.

“I think a really good example of this is like, remember Triller?” Wei said. “For a while, we were all excited about it, like ‘Oh my god, TikTok’s going away, let’s put money toward Triller!’ But then everyone realized TikTok is not going away. And now it’s years later, and does anyone talk about Triller anymore?”

Well, they might not be talking about Triller either because the company is a walking red flag. In any case, creators won’t have the patience to invest in a nascent platform that might not last, so they’ll have to make due with Instagram, YouTube and Snapchat. That doesn’t mean TikTok won’t be missed, though.

“I think the fans will be affected the most overall,” Gestetner said. “But I do think the Shorts experience and Reels experience is getting very good.”


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TikTok faces a ban in the US, Tesla profits drop and healthcare data leaks | TechCrunch


Welcome, folks, to Week in Review (WiR), TechCrunch’s regular newsletter covering this week’s noteworthy happenings in tech.

TikTok’s fate in the U.S. looks uncertain after President Joe Biden signed a bill that included a deadline for ByteDance, TikTok’s parent company, to divest itself of TikTok within nine months or face a ban on distributing it in the U.S. Ivan writes about how the impact of TikTok bans in other countries could signal what’s to come stateside.

Meanwhile, fallout from the Change Healthcare hack continues. Change, a subsidiary of health insurance giant UnitedHealth, confirmed this week that the ransomware attack targeting it earlier this year resulted in a huge theft of Americans’ private health info, possibly covering “a substantial proportion” of Americans.

And Tesla profits dropped 55% as the EV company contends with increased pressure from hybrid carmakers. The automaker’s growth plan is centered around mysterious cheaper EVs scheduled to launch next year — as well as perhaps a robotaxi. But a recall on the Cybertruck for faulty accelerator pedals certainly won’t help in the interim.

Lots else happened. We recap it all in this edition of WiR — but first, a reminder to sign up to receive the WiR newsletter in your inbox every Saturday.

News

Amazon grocery plan: Amazon launched a new unlimited grocery delivery subscription in the U.S. The plan, which costs $9.99 per month for Amazon Prime users, comes with free deliveries for grocery orders over $35 across Amazon Fresh, Whole Foods Market and other local grocery retailers.

California drones grounded: In more Amazon news, the tech giant confirmed that it’s ending Prime Air drone delivery operations in Lockeford, California. The Central California town of 3,500 was the company’s second U.S. drone delivery site after College Station, Texas; Amazon didn’t offer any details around the setback.

Fisker plans layoffs: Fisker says it’s planning more layoffs less than two months after cutting 15% of its workforce, as the EV startup scrambles to raise cash to stay alive. Fisker expects to seek bankruptcy protection within the next 30 days if it can’t come up with the money.

Stripe expansion: Among a slew of other announcements at its Sessions conference in San Francisco, Stripe said that it’ll be de-coupling payments from the rest of its financial services stack. Given that Stripe previously required businesses to be payments customers in order to use any of its other products, that’s a big change.

Analysis

Rabbit hands onBrian writes about the R1, the first gizmo from AI startup R1. The $199 price point, touchscreen and funky aesthetic from storied design firm Teenage Engineering make the R1 far more accessible than Humane’s Ai Pin, he concludes.

Lab-grown diamonds: Pascal, an Andreessen Horowitz-backed startup, claims it can make high-end jewelry accessible by using lab-grown diamonds chemically and physically akin to natural diamonds but that cost one-twentieth of the price.

AI poetry: An experiment called the Poetry Camera — an actual, physical camera — combines open source technology with playful design and artistic vision. Instead of merely capturing images, the Poetry Camera arranges thought-provoking, AI-generated stanzas based on the visuals it encounters.

Rippling deep dive: Connie interviewed Parker Conrad, the CEO of workforce management startup Rippling, on the company’s new $200 million funding round, new San Francisco lease (the second biggest to be signed in the city this year) and more.


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The FTC's ban on noncompete clauses could be good for startups. But it also might be struck down. | TechCrunch


The Federal Trade Commission voted 3-2 to ban the use of most noncompete agreements on Tuesday. This ruling means companies can’t require their employees, that aren’t senior executives, to wait a set amount of time before joining a competitor or launching their own company in the same category. While the FTC’s ruling will impact industries like financial services and hedge funds the most, due to the prevalence of such agreements in those industries, it could also impact startups.

The ban could actually be positive news for startup founders and hiring managers in a number of ways. For one, it could open up the hiring pool, says Nick Cromydas, the co-founder and CEO of hiring and recruiting startup Hunt Club.

“Now there will be more potential crosspollination of companies that really understand businesses models and spaces,” Cromydas said. “I expect you will see more hiring with direct domain experience than you’ve seen in a while.”

Ryan Vann, a partner focused on employment law at Cooley, agreed. He said that he’s had clients that were too anxious to hire potentially game-changing talent away from larger companies for fear those companies would act on the noncompete agreement.

Banning noncompete agreements could also encourage startups to foster a strong company culture that makes people want to stay, as opposed to using threats to keep them, Cromydas said.

Some members of the startup community seem happy about the ruling as well — rare these days when it comes to decisions by the FTC. Sarah Guo, the founder at AI-focused VC firm Conviction, tweeted that banning noncompete agreements is a win for innovation. Cole Harrington, the co-founder and CEO at ThoughtWave AI agreed with her.

Understandably, some startup CEOs are worried about how the end of noncompetes could impact the security of intellectual property, but Cromydas said there are other ways for companies to protect themselves. Startups can have employees sign non-disclosure agreements regarding intellectual property, or spend more time filing patents. Instead of blocking an employee’s future employment, such alternatives prevent them from using the previous employer’s intellectual property knowledge at their new jobs.

Startup employees might not see much of a change for two other reasons: noncompete agreements were already very hard to enforce, Vann said, and they were trending out of vogue among startups anyway. Certain states, including startup-heavy California, have existing state laws that restrict them. Although, he added that any client of his that can use them, typically does despite the low-rate of them actually coming into play.

“Even without this ban, it is really, really hard in virtually every court in America to enforce a noncompete unless you have something added that are bad facts like theft of confidential information, soliciting customers before you go, trying to set up competing business before you go,” Vann said. “I would almost never go into litigation unless I was armed with that kind of evidence or misappropriation of trade secrets.”

Given all that, noncompetes are becoming less common, according to company data from Hunt Club. While five years ago 90% of offers that came through Hunt Club’s platform included a noncompete agreement, that figure now is about 40%. Although, Cromydas said he wouldn’t doubt it they were rising again in hot sectors like AI where intellectual property is crucial and the war for talent is high.

So what should startup CEOs do if they currently use noncompete agreements with their employees? Absolutely nothing, according to Vann who questions whether the ban will actually stick. Multiple lawsuits against the ruling have already been filed including one from the U.S. Chamber of Commerce and another from tax service firm Ryan LLC.

Vann thinks this potential ban could be struck down by numerous courts. If it does clear these legal hurdles, startups wanting to hire someone that may have signed one can terminate existing noncompete agreements incredibly easily.

“The worse case scenario if you are a startup, and hire someone with a noncompete, is all you have to do is issue the notice to say that your noncompete is not enforceable,” Vann said. “I would keep it at status quo right now and monitor what’s happening.”




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The impact of TikTok's ban in other countries could signal what's ahead for the U.S. | TechCrunch


On April 24, U.S. President Joe Biden signed a bill that would ban TikTok if its owner ByteDance doesn’t sell the app.

The bill requires ByteDance to secure a deal within nine months, with a 90-day extension available to close it. After this deadline, the U.S. will bar app stores from listing the app.

TikTok will challenge this decision in courts with a long legal battle ahead of us. But many countries worldwide have already banned the app, and ByteDance hasn’t had a chance to revive it. These moves impacted ByteDance’s operations in those countries, creators, as well as startups related to the creator economy.

Here’s how those bans are playing out in other markets.

  • India: This is perhaps the most well-known TikTok ban as India is one of the biggest consumer markets in the world. In June 2020, the Indian government banned the short video app along with many other Chinese apps citing national security reasons. ByteDance’s other popular app Helo was also a part of the list of banned apps at that time.

Members of the Working Journalist of India (WJI) hold placards urging citizens to remove Chinese apps and stop using Chinese products during a demonstration against the Chinese newspaper Global Times, in New Delhi on June 30, 2020. – TikTok on June 30 denied sharing information on Indian users with the Chinese government, after New Delhi banned the wildly popular app citing national security and privacy concerns.
“TikTok continues to comply with all data privacy and security requirements under Indian law and have not shared any information of our users in India with any foreign government, including the Chinese Government,” said the company, which is owned by China’s ByteDance. (Photo by Prakash SINGH / AFP) (Photo by PRAKASH SINGH/AFP via Getty Images)

  • Afghanistan: In 2022, the Taliban banned TikTok along with PlayerUnkown’s Battleground (PUBG) for “misleading youth.” In February, Wired reported that many creators in the country used VPNs to make videos and reach different audiences through TikTok. The report noted that TikTok users in Afghanistan were estimated to be anywhere between 325,000 to 2 million.
  • Uzbekistan: Uzbekistan has placed restrictions on TikTok’s usage in the country since July 2021. In 2022, lawmakers proposed a complete ban after several people used VPNs to use the service.
  • Senegal: In August 2023, Senegal blocked TikTok in the aftermath of the sentencing of opposition leader Ousmane Sonko. Citizens used the platform to register dissent resulting in a ban. In October, authorities demanded that ByteDance create a way for officials to remove accounts.
  • Somalia: Somalia banned TikTok — along with Telegram and betting site 1xBet — around the same time as Senegal. However, Somali authorities cited that these platforms were used to “spread horrific content and misinformation to the public.”
  • Kyrgyzstan: August 2023 wasn’t a great month for TikTok. Kyrgyz authorities also barred the platform, deeming it harmful to “the health and development of children.” The country’s culture ministry added that teens were trying to reenact certain videos, causing danger to their lives.
  • Nepal: Nepal banned TikTok in November 2023 because the government believed the app disrupted “social harmony” and had an impact on “family and social structures.” The authorities were also concerned about growing cybercrime on the platform, with local media reporting 1,600 TikTok-related cases in the last four years. According to a BBC Media action report published in 2023, TikTok was the country’s third most popular social media platform after YouTube and Facebook.
  • Other bans: Iran has banned most major social networks in the country, including TikTok. However, the exact date of the ban is unknown. Apart from that, several countries and regions, including the U.S., Canada, the U.K., Belgium, the EU, New Zealand and Australia have barred TikTok from official devices.

Impact of the bans

Multiple reports have captured the impact of the TikTok ban on creators who were reliant on the short video platform for reach and even money making. Many small businesses also use TikTok to promote their brands in different ways.

In many ways, India banning TikTok was a pivotal moment as Instagram rushed to release Reels in India to replace the platform. Meta (then Facebook) launched Reels in the U.S. a few months later. YouTube also followed suit by introducing Shorts in India.

However, TikTok’s ban also gave rise to many local short video apps. Twitter and Google-backed local social network ShareChat released Moj; Verse Innovation (parent company of news aggregator DailyHunt) launched Josh, Times Internet launched MX Takatak and eventually merged it with Moj in 2022; ad company InMobi released Roposo with other rivals like Mitron, Chingari, and Trell also trying to capture the market.

Developers in Nepal also launched a TikTok rival called Ramailo in November 2023, but its lifespan was short-lived.

Because of multiple apps, creators have had to invest in putting their content on multiple platforms. Critically, these platforms might not be putting short videos front and center like TikTok, and their recommendation algorithm might also differ, causing creators to lose their audience. A similar impact could occur in the U.S., as creators scramble to find a new platform or platforms for their work — even if only to hedge against the possibility that TikTok’s influence wanes under the threat of a ban.

In the aftermath of India banning TikTok, ByteDance had to scale back its operations. Earlier this year, the company’s music streaming service, Resso, was also shut down in India after the government asked app stores to pull the app.

Aside from the impact on creators, digital rights activists have also made arguments that banning platforms like TikTok curtails free speech. Some of these angles might play out in the U.S., too, as the government and ByteDance will indulge in legal battles.

Last year, FCC Commissioner Brendan Carr said that India set an “incredibly important precedent” by banning TikTok in 2020. Carr mentioned at that time that the U.S. needs to follow India’s lead to remove nefarious apps.


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TikTok ban signed into law by President Biden: How we got here, and what comes next | TechCrunch


TikTok faces an uncertain fate in the U.S. once again. A bill including a deadline for TikTok parent company Bytedance to divest within nine months or face a ban on app stores to distribute the app in the U.S., was signed by President Joe Biden on Wednesday as part of broader legislation including military aid for Israel and Ukraine. The White House’s approval comes swiftly after strong bipartisan approval in the House and a 79-18 Senate vote Tuesday in favor of moving the bill forward.

TikTok is based in Los Angeles and Singapore but is owned by Chinese tech giant ByteDance. That relationship has raised eyebrows among U.S. officials, who warn that the app could be leveraged to further the interests of an adversary. The bill’s critics argue that the U.S. is unfairly targeting a well-loved social network when the government could be dealing with household issues that directly benefit Americans.

What happened in the Senate?

Senate Majority Leader Chuck Schumer, who has the power to set the chamber’s priorities and round up Democrats for a unified vote, initially said that the Senate “will review the legislation when it comes over from the House.”

The Senate at first seemed far from presenting a united front against TikTok. Some Republican China hawks like Sens. Josh Hawley and Marsha Blackburn were pushing their chamber of Congress to take up the bill. On the Democratic side, Senate Intelligence Committee Chairman Mark Warner issued a joint statement with his Republican committee counterpart, Marco Rubio, in support of a forced sale or ban for TikTok.

“We are united in our concern about the national security threat posed by TikTok — a platform with enormous power to influence and divide Americans whose parent company ByteDance remains legally required to do the bidding of the Chinese Communist Party,” Warner and Rubio said in an emailed statement. Their Senate committee, which is frequently briefed on national security matters, is particularly relevant given the nature of the concerns expressed by TikTok’s critics in Congress.

Late Tuesday, the Senate approved the $95 billion aid package — including aid for Taiwan and humanitarian aid for Gaza — that also contained the much-debated TikTok ban.

What happened in the House?

In March, the House Energy and Commerce Committee introduced a new bill designed to pressure ByteDance into selling TikTok. The bill marked a fresh push by the U.S. government to separate the company from its Chinese ownership or force it out of the country.

The bill, known as the Protecting Americans from Foreign Adversary Controlled Applications Act, would make it illegal for software with ties to U.S. adversaries to be distributed by U.S. app stores or supported by U.S. web hosts. Within the bill’s definitions, ownership by an entity based in an adversary country, like ByteDance in China, counts.

In language of the bill, which goes on to name TikTok explicitly, “it shall be unlawful for an entity to distribute, maintain, or update (or enable the distribution, maintenance, or updating of) a foreign adversary controlled application.” If the bill became law, Apple’s App Store and Google Play could not legally distribute the app in the U.S.

The bill, which many of its detractors reasonably describe as a “ban,” would force ByteDance to sell TikTok within six months for the app to continue operating here. It also empowers the president to have oversight of this process to ensure that it results in the company in question “no longer being controlled by a foreign adversary.”

After getting wind of the bill’s swift and sudden progress in Congress, TikTok pushed back with a mass in-app message to U.S. users, complete with a button for calling their representatives.

“Speak up now — before your government strips 170 million Americans of their Constitutional right to free expression,” the message read. “Let Congress know what TikTok means to you and tell them to vote NO.”

In spite of TikTok’s decision to rile up its users — or perhaps because of it — the bill to force ByteDance to sell TikTok passed through the House Energy and Commerce Committee with a 50-0 vote. The fast-tracked bill passed a full vote in the House on March 13.

Prior to the vote, subcommittee members had a classified briefing with the FBI, the Justice Department and Office of the Director of National Intelligence at the behest of the Biden administration, Punchbowl News reported.

President Biden also explicitly said that he would sign the bill if it reaches his desk. “If they pass it, I’ll sign it,” Biden told a group of reporters. And Biden followed through with that statement in signing the bill Wednesday.

Why does the U.S. say TikTok is a threat?

To be clear, there is currently no public evidence that China has ever tapped into TikTok’s stores of data on Americans or otherwise compromised the app.

Still, that fact hasn’t stopped the U.S. government from highlighting the possibility that China could if it wanted to. The Chinese government hasn’t been shy about going hands-on with companies in the country or keeping critics from its business community in line.

FBI director Chris Wray once cautioned that users might not see “outward signs” if China were ever to meddle with TikTok. “Something that’s very sacred in our country — the difference between the private sector and the public sector — that’s a line that is nonexistent in the way the CCP operates,” Wray said in a Senate hearing last year.

TikTok has vehemently denied these accusations. “Let me state this unequivocally: ByteDance is not an agent of China or any other country,” TikTok CEO Shou Zi Chew said last year during a separate hearing with the House Energy and Commerce Committee.

To TikTok’s credit, if China wanted to get its hands on information about U.S. users, Beijing could easily turn to data brokers who openly sell troves of user data around the globe with little oversight.

Because the U.S. has not produced any public evidence to back up its serious claims, there’s a major disconnect between how politicians feel about TikTok and how most Americans do. For many TikTok users, the U.S. crackdown is just one more way that politicians are out of touch with young people and don’t understand how they use the internet. For them — and other skeptics of the U.S. government’s claims — the situation looks like pure political posturing between two countries with bad blood, sometimes with a dash of racism.

Where did this idea come from?

The campaign to force ByteDance to sell TikTok to a U.S. company originated with an executive order during the Trump administration. Trump’s threats against the company culminated in a plan to force TikTok to sell its U.S. operations to Oracle in late 2020. In the process, TikTok rejected an acquisition offer from Microsoft but ultimately didn’t sell to Oracle, either, in spite of Trump’s efforts to steer the acquisition to benefit close ally and Republican mega donor Larry Ellison.

The executive action ultimately fizzled in 2021 after Biden took office. But last year, the Biden administration picked up the baton, escalating a pressure campaign against the app along with Congress. Now that campaign looks to be back on track.

Oddly, former President Donald Trump, who himself initiated the idea of a forced TikTok sale four years ago, is no longer in support of a TikTok crackdown. Trump explained his abrupt about-face on TikTok by highlighting the benefit a ban or forced sale could have on Meta, which suspended the former president’s account over his role in inciting violence on January 6.

“Without TikTok, you can make Facebook bigger, and I consider Facebook to be an enemy of the people,” Trump told CNBC. Trump’s tune on TikTok may have changed following a recent meeting with billionaire Republican donor Jeffrey Yass, who owns a 15% stake in TikTok’s Chinese parent company ByteDance.

What’s TikTok’s response to the potential ban?

There is some strong bipartisan congressional support for regulating TikTok, but things are still pretty complex. The most obvious complication: TikTok is enormously popular and we’re in an election year. TikTok has 170 million users in the U.S. and they aren’t likely to quietly watch as Congress effectively bans their favorite source of entertainment and information.

TikTok’s creators and their followers likely won’t go quietly. TikTok accounts with millions of followers have a built-in platform for organizing against the threat to the app that connects them to their communities and facilitates brand deals and advertising income.

TikTok itself would also surely mount a strong legal challenge against the forced sale, much as it did when the Trump administration previously tried to accomplish the same thing through executive action. TikTok also sued when Montana attempted to enact its own ban at the state level, which ultimately resulted in a federal judge issuing an injunction and blocking the effort as unconstitutional.

“This legislation has a predetermined outcome: a total ban of TikTok in the United States,” TikTok spokesperson Alex Haurek told TechCrunch in an emailed statement. “The government is attempting to strip 170 million Americans of their Constitutional right to free expression,” Haurek said, foreshadowing the massive public outcry that could result.

The cultural reach of TikTok is so great that Biden is campaigning on TikTok, even as the White House calls the app a national security threat.

Even though the White House has now signed off on the legislation, the U.S. scheme to force ByteDance to sell TikTok could still fail — an outcome that may or may not result in a ban. China has previously stated that it would oppose a forced sale of TikTok, which is well within the Chinese government’s rights following an update to the country’s export rules in late 2020.

Beyond Congress and the courts, TikTok holds a direct line to a massive chunk of the American electorate and a fleet of creators who command many millions of loyal followers. Those levers of power shouldn’t be underestimated in the fight to come.

Still, it’s difficult for TikTok to more effectively organize these millions. Though the X platform, when it operated as Twitter, was highly efficient as a mechanism to share breaking news, TikTok’s algorithms make it less effective as a means of understanding what is happening minute by minute. Though TikTok users say it has become a source of news — among adults, those ages 18 to 29 are most likely to say they receive their news regularly on TikTok — that information tends to be highly targeted and asynchronous. While many users may know something is brewing in Washington, it’s likely they are less aware of the steps required to fight it, making it harder for TikTok to mobilize them.

This post was originally posted March 13, and has been updated as the legislation moves forward.




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Biden signs bill that would ban TikTok if ByteDance fails to sell the app | TechCrunch


President Biden has signed a bill that would ban TikTok if its owner, ByteDance, doesn’t sell it within a year. The bill includes aid for Ukraine and Israel. U.S. Senators passed the bill 79-18 on late Tuesday after the House passed it with overwhelming majority over the weekend.

The bill gives ByteDance nine months to divest TikTok, with a 90-day extension, to complete the deal. If ByteDance doesn’t sell TikTok, it would become illegal for app stores to distribute the app.

In an emailed statement to TechCrunch, TikTok said it would challenge the “unconstitutional law” in court.

“We believe the facts and the law are clearly on our side, and we will ultimately prevail,” the statement reads. “The fact is, we have invested billions of dollars to keep U.S. data safe and our platform free from outside influence and manipulation. This ban would devastate 7 million businesses and silence 170 million Americans. As we continue to challenge this unconstitutional ban, we will continue investing and innovating to ensure TikTok remains a space where Americans of all walks of life can safely come to share their experiences, find joy, and be inspired.”

TikTok CEO Shou Zi Chew shared his own video response on Wednesday, calling the news “a disappointing moment” and stating that TikTok “will keep fighting.”

Back in March, the House passed a similar standalone bill to ban TikTok or force its sale with a six-month time limit, but the Senate never took that bill up. This time, the House packaged the TikTok bill with foreign aid to U.S. allies, which essentially forced the Senate to make a decision.

TikTok has spent the last few months arguing that its platform is essential for creators and small businesses in the U.S. A few weeks ago, the company released an economic impact report revealing that TikTok generated $14.7 billion for small to mid-sized companies in the U.S.

This story is developing…




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The TikTok ban clears key hurdle while Perplexity AI continues to shake up search | TechCrunch


Well, if you are a big TikTok fan and live in the United States, I have some bad news for you: A bill that would force a sale of TikTok or ban it in the United States passed the Senate. And the President is expected to sign it. Given that China has made noise that it will not allow a sale of the social media company that is headquartered in Singapore, but is owned by Chinese company ByteDance, it’s not looking good for TikTok in the States.

But if that has you bummed out, don’t worry, we have lots of pretty positive news to discuss as well. News like two AI startups in Europe that are making a bit of noise that caught our attention. There’s a lot more AI in Europe than just Mistral, of course.

And we had to discuss the latest from Perplexity AI, which just raised money and is shaking up its operating plans by raising even more money. It’s a good time to be an AI startup.

Not that that is the only thing going on. The Framework laptops folks just raised more capital, Pony.AI is considering a U.S. IPO, and Volition Capital is expanding. Hit play, and let’s have a chat!

Equity is TechCrunch’s flagship podcast and posts every Monday, Wednesday and Friday, and you can subscribe to us on Apple Podcasts, Overcast, Spotify and all the casts.

You also can follow Equity on X and Threads, at @EquityPod.

For the full interview transcript, for those who prefer reading over listening, read on, or check out our full archive of episodes over at Simplecast.




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Senate passes a bill forcing TikTok to face a ban if ByteDance doesn't sell it | TechCrunch


The Senate passed a bill, included with the foreign aid package, that will ban TikTok if its owner, ByteDance, doesn’t sell it within a year. Senators passed the bill 79-18 Tuesday after the House passed it with overwhelming majority over the weekend.

President Joe Biden will have to sign the bill to make it law, and as per a statement released by the White House, he intends to do so on Wednesday.

Notably, in March, the House passed a similar standalone bill to ban TikTok or force its sale with a six-month time limit. However, the Senate never took that bill up. This time, as the bill was tied with critical foreign aid to Ukraine, Israel, and Taiwan, the Senate had to make a decision.

TikTok didn’t immediately release a statement. However, Michael Beckerman, the company’s head of public policy for the Americas, said that the company plans to challenge the move in courts, according to Bloomberg.

“This is an unprecedented deal worked out between the Republican Speaker and President Biden. The stage that the bill is signed, we will move to the courts for a legal challenge,” he said in a memo to TikTok’s US staff earlier this week.

The bill gives Bytedance nine months to force a sale with a 90-day extension  — so effectively a year to complete the deal.

Last week, when the House passed the bill, TikTok said it was “unfortunate” that the House was using the cover of important foreign and humanitarian assistance to jam through a ban bill that restricts the “free speech rights of 170 million Americans.”

While TikTok operates out of Singapore, the U.S. has been concerned about the data of its citizens, given the Chinese ownership of the social media platform. TikTok has continually tried to assure the government that it doesn’t give out U.S. user data to China with different campaigns.




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