18 March 2024 Lawmakers ban TikTok

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Lawmakers ban TikTok​

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The Story:

Sell TikTok in 6 months or it’s banned.

That was the message after the Foreign Adversary Controlled Applications Act was passed in the US House of Representatives.

Put simply, the bill means that app stores and internet hosts can’t distribute, host or maintain applications that are owned by ‘foreign adversaries’, unless the app is sold within 6 months.

So is TikTok banned? Not yet. The bill must be passed by the Senate and signed into law by the US president. Joe Biden has already signalled he would approve the bill.

What you need to know for your interviews:

TikTok is owned by Chinese company Bytedance. The US is worried that Chinese ownership of one of the most popular US social media apps is a national security threat and a backdoor for access to millions of users’ data. Lawmakers are also concerned that China could influence the decisions of young people in the US. Ahead of the bill, it didn’t help its case that TikTok used a push notification to get Americans to call lawmakers to fight against the ban.

What does this mean for law firms?

Last year, TikTok made plans to hire 60 lawyers around the world to help fight off growing regulatory scrutiny. Its legal advisers include head of Skadden’s CFIUS and National Security practices. In 2022, the social media platform also laterally hired Skadden’s China practice head Julie Gao.

The role of Chinese companies operating in the US has been a longstanding regulatory issue. In 2022, Huawei and four other Chinese companies were banned from the sale of communications equipment over national security concerns.

The US and China are not alone in their protectionism. In the UK, the government stepped in over the attempted takeover of The Telegraph by a UAE-backed fund. The government is now said to be proposing a law to prevent foreign states from owning newspapers.

Within the US, as Clifford Chance writes, states are increasingly ‘taking the law into their own hands’ to protect against privacy concerns, and technology concerns must evaluate how proposed legislation might impact their projects.