Congress Fast-Tracks TikTok Ban Legislation, Setting Up Possible Passage This Month

Congress is fast-tracking a bipartisan effort to crack down on TikTok that could lead to passage of a law this month forcing a sale or eventual ban of the popular Chinese-controlled app in the U.S.

The House plans to vote this weekend on revised TikTok legislation that would tie it to a sweeping package of aid for Ukraine and Israel. The new approach would give TikTok up to a year to find new ownership—versus the six months previously proposed—with the fate of the wildly popular video-sharing app hanging in the balance.

If the House approves the bill, the Senate could vote on the matter as soon as next week and send it to President Biden’s desk. Biden previously said he would sign a bill banning or forcing a sale of TikTok.

Passage of the bill would be the culmination of years of tussling across two administrations over TikTok’s fate in the U.S. A law would likely spur a wave of lawsuits, whether from TikTok itself or from U.S. users or the army of creators and small businesses that rely on it for their livelihoods. It could also accelerate efforts to put together a deal among non-Chinese buyers to acquire TikTok’s U.S. operations.

If the law ended up resulting in a ban, it would mark an outcome with little precedent in the U.S., removing access to an app that boasts some 170 million American users and that has substantially affected industries from social media to music.

TikTok, which has repeatedly been caught off guard in recent weeks by Congress’s moves against it, has said it considers any legislation to force a sale as tantamount to a ban due to the difficulties facing any deal. The Chinese government has signaled it wouldn’t allow a forced sale.

“It is unfortunate that the House of Representatives is using the cover of important foreign and humanitarian assistance to once again jam through a ban bill,” a TikTok spokesman said about the revised House bill. The spokesman said the legislation would trample on the free-speech rights of the service’s 170 million U.S. users and hurt small businesses.

The House had voted overwhelmingly last month to approve a bill that would force Chinese parent company ByteDance to sell TikTok’s U.S. operations within about six months of the legislation becoming law or face a ban. That measure then moved to the Senate, where its fate was uncertain as lawmakers contemplated potential changes to the bill.

The new House proposal, released late Wednesday, extends the sale period to about nine months, with a possible three-month extension. The House plans to vote this weekend on the TikTok legislation, which is part of a broader package that provides $95 billion in emergency funding for allies and humanitarian aid for Gaza. The Senate would then vote on the entire package encompassing aid funding and the TikTok measure.

Sen. Maria Cantwell (D., Wash.), who as Commerce Committee chair has jurisdiction over the TikTok bill in the Senate, said she recommended that House leaders lengthen the sale period. She said she supported the revised language, calling the extended window “necessary to ensure there is enough time for a new buyer to get a deal done.”

In remarks to reporters Thursday, Senate Majority Leader Chuck Schumer said the body was eager to pass the House’s legislation. While the House measure is made up of four bills, they will be sent to the Senate as one package for an up-or-down vote.

The short-video app has faced scrutiny because of its control by ByteDance, a company founded in Beijing that U.S. critics say is under the thumb of China’s government. Many lawmakers say Beijing could use the app to harm national security by gathering intelligence on U.S. users or promoting China’s preferred messages to users on issues ranging from sensitive topics for teens to global debates such as the Israel-Hamas war.

Then-President Donald Trump sought to ban the app in 2020 through an executive order, which ultimately was stymied in the courts. Trump recently indicated he was less sure now how TikTok should be handled, noting in part that banning it would shift users to rival social-media network Facebook, which he has criticized.

TikTok says it has never been asked to provide U.S. user data to the Chinese government and wouldn’t if asked, and has also said it doesn’t tailor content based on political motives. The company has emphasized that it is based in Singapore and that ByteDance’s shareholders include a number of U.S. investors with substantial ownership stakes. They include investment firms General Atlantic, Carlyle and Susquehanna International Group, whose co-founder, Jeff Yass, has lobbied heavily on behalf of the app.

Earlier this year, TikTok thought it had successfully quelled momentum for a ban, only to be blindsided when the house passed its original bill.

More recently, the company assessed that it had more time to fight further progress of the legislation. A week ago, TikTok executives didn’t think Congress would likely attach the TikTok issue to the Ukraine aid bill. They believed Congress wouldn’t have time to do a stand-alone TikTok bill until the fall, but wouldn’t want to pursue it a month before the presidential election, according to people familiar with the matter.

Internally, executives say they don’t believe the Chinese government will allow a sale of the app. In March, a spokesman for China’s Ministry of Commerce said the U.S. should “stop unreasonably suppressing” TikTok, a comment ByteDance executives interpreted to mean their company would face regulatory hurdles if it sought to divest TikTok, according to people familiar with the matter.

TikTok’s next steps include determining when to sue to try to stop the divestment, the people said. Previously, TikTok has successfully orchestrated suits led by TikTok stars who opposed a ban.

A court dispute could raise several legal issues, including how to balance national-security objectives of the legislation against the First Amendment rights of TikTok and its users.

The U.S. restricts foreign ownership of broadcast media but hasn’t taken such drastic actions against an internet platform used by millions of Americans to communicate. Judges in previous TikTok litigation have recognized that its users have constitutional free-speech rights in posting and consuming content that would be harmed by its shutdown.

Lawmakers and proponents of the legislation have said it was crafted to withstand such challenges in the courts.

Both TikTok and its American fans have continued trying to head off a ban. In April, a group of creators wrote a letter to President Biden, urging him to stop the legislation.

TikTok also spent millions of dollars on an ad campaign, previously reported by the New York Times, in some presidential battleground states with the message to #KeepTikTok.

Some Western investors have expressed interest in forming investor groups to buy TikTok’s U.S. operations, and some have suggested a deal could exclude the algorithm, requiring it to be replaced with U.S. technology. “The app needs to be rebuilt in the U.S.,” former Treasury Secretary Steven Mnuchin, who has said he is trying to assemble a group for a TikTok deal, said last month.

Others who have expressed interest include businessman Kevin O’Leary, a veteran of the “Shark Tank” reality show. It remains unclear where the funds would come from for any of the groups to do a deal, which could cost tens of billions of dollars or more depending on the structure.

The American public remains divided. A CNBC All-America Economic Survey poll of about 1,000 adults taken in mid-March, after the House passed its initial legislation, found 20% of respondents believed TikTok should be banned no matter what, 27% said it should be banned unless it finds a new non-Chinese owner, and 31% said it shouldn’t be banned.

Natalie Andrews contributed to this article.

Write to Tim Hanrahan at [email protected] and Georgia Wells at [email protected]