The Media Today

What’s next for TikTok?

May 2, 2024
Solen Feyissa, CC BY-SA 2.0, via Wikimedia Commons.

After almost four years of debating a law that would force ByteDance, the Chinese company that owns TikTok, to sell the app or be banned in the United States, Congress finally passed legislation promising exactly that, and President Biden signed it into law last week. (I’ve written a number of times over the years about the back-and-forth in Washington regarding a potential ban, including here and here and here.) As recently as a few weeks ago, the prospect of such a law passing looked doomed; the House of Representatives voted overwhelmingly in favor of a version of the law on March 13, but the bill then seemed to lose momentum in the Senate, as I detailed recently. So what changed? And what happens now? Even though the law has passed, a number of hurdles, roadblocks, and potential landmines still stand in its way. 

To answer the first question, sources in Washington believe that ByteDance made a “series of miscalculations” in its attempts to forestall the passage of the law, according to the Wall Street Journal. The sources said that Shou Zi Chew, TikTok’s CEO, failed to build support on Capitol Hill and instead relied on negotiations with the Committee on Foreign Investment in the US, a government panel that reviews deals involving overseas companies on national security grounds, to produce “a complex restructuring that never panned out.” Chew testified before Congress earlier this year, an appearance that ByteDance felt went well—and the company got support from the Club for Growth, a conservative organization backed by Jeff Yass, a major TikTok shareholder. But despite these successes, the Journal wrote, opinion on Capitol Hill was already shifting against the company, as a result of what the Journal called “Washington’s deepening, bipartisan distrust of China, especially on tech matters.”

As for what might happen next, the idea of selling TikTok to a US company as an alternative to a ban isn’t a new one. It was first proposed in 2020, after Donald Trump tried to ban the app by executive order. The New York Times reported at the time that ByteDance was discussing a potential deal with investors, including Sequoia and General Atlantic, two US investment firms that already owned shares in the company. Under that plan, TikTok would have received new cash from existing investors, with ByteDance retaining a minority stake. When those discussions took place, the company’s market value was estimated at a hundred billion dollars, roughly the same as it is now. But talk of a sale cooled after Trump’s ban foundered in court and Joe Biden became president.

Over the past year or so, talk of a sale-or-ban bill started to ramp back up and a number of parties expressed interest in buying TikTok—unsurprisingly, given that it is one of the most popular social apps in the world, with almost two billion monthly users. Among the prospective buyers now are Steven Mnuchin, an investment banker and former treasury secretary under Trump who said that he has assembled a group of interested investors, and Bobby Kotick, the former CEO of the gaming company Activision Blizzard, who is reportedly looking for partners to join in an acquisition. The Journal reported that Kotick spoke to Zhang Yiming, the cofounder of ByteDance, about a possible TikTok deal, although ByteDance has denied this. Other potential acquirers could include Microsoft and Oracle. After Trump tried to ban TikTok, Microsoft expressed an interest in buying the app, according to an NBC News report, while Oracle started working with ByteDance as part of Project Texas, which was designed to wall off the data that TikTok had gathered from US users and thus defuse concerns about China’s ability to use it for nefarious purposes.

Indeed, the biggest hurdle standing in the way of a TikTok acquisition might not be a lack of interested buyers, but the Chinese government. After Trump proposed banning the app, Beijing passed a new law covering the export of technology, including algorithms such as the one that powers TikTok. (I wrote about this for CJR at the time.) Arthur Dong, a business professor at Georgetown University, told The Verge this week that China likely would not agree to a TikTok sale if it included the algorithms, because “it probably feels at this point that they’ve got a gun to their head.” ByteDance could theoretically sell everything but the algorithms, but as Dan Primack, of Axios, has noted, this would be like McDonald’s “selling a Big Mac without the meat.” The Information has reported that ByteDance has held discussions about a sale without the algorithms, but the company has denied this.

If a sale is not possible, then under the new law, a ban seems inevitable. But some observers believe that this course of action could face significant obstacles in court. TikTok itself has suggested that a challenge on First Amendment grounds is likely: in a video addressing users after Biden signed the new law, Chew, the CEO, described it as “a ban on you and your voice,” while a spokesperson for the company pledged to challenge it in court. Some outside observers seem to think that such a challenge would have merit. In a statement following the law’s passage, Jameel Jaffer, the executive director of the Knight First Amendment Institute at Columbia University, agreed that it is unconstitutional. The First Amendment means that the government can’t restrict access to ideas, information, or media from abroad “without a very good reason for it,” Jaffer said—“and no such reason exists here.”

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Many of TikTok’s critics disagree with this view, of course. Last year, an analysis published by an arm of the US State Department argued that the Chinese government is using its influence over TikTok to “reshape the global information environment,” just as it uses its control over Chinese state media to manipulate information, intimidate critics of the government, and promote the ruling Communist Party’s interests. Some members of Congress, meanwhile, have supported a ban due to concerns that the app might turn over the private data of US users to the Chinese government. A number of critics of this position, however, have argued that Beijing doesn’t need access to TikTok to get such information—it can simply buy it from online data-brokers, in much the same way that lots of other, non-Chinese companies do routinely.

Nor is everyone convinced that a First Amendment challenge by ByteDance would be successful. Matt Schettenhelm, a senior litigation analyst at Bloomberg Intelligence, told The Verge that the DC circuit court, where such a challenge would be heard, would likely “tread carefully before it overturns a policy decision that was adopted by an overwhelming bipartisan majority of Congress.” Schettenhelm puts the likelihood of the government prevailing at around 70 percent, and thinks that, in such a scenario, the Supreme Court might be inclined to let its ruling stand. 

As Seth Stern noted recently for CJR, the courts went in the opposite direction in the Pentagon Papers case in the seventies, when the publication of secret government assessments of the Vietnam War was portrayed as a clear national security threat but was determined to be protected by the First Amendment. Whether the courts today would make the same decision remains an open question. Regardless, there is a lot of ground left to cover before a TikTok ban—or even a sale—becomes a reality.

Other notable stories:

  • Early yesterday, pro-Israel counterprotesters at the University of California, Los Angeles, assaulted four journalists with the Daily Bruin, a student newspaper, who were covering a wider attack on a pro-Palestinian protest encampment; according to an editor at the Bruin, the counterprotesters pepper-sprayed, beat, and kicked the journalists. Meanwhile, police sweeping a protest at the California State Polytechnic University, Humboldt, reportedly arrested at least three journalists. (According to KMUD, they were later released.) And the Washington Post’s Laura Wagner assessed how reporters covering protests nationwide have faced access obstacles from police, university administrators—and protesters themselves, many of whom have concerns about identifying themselves, maintaining message discipline, and receiving fair coverage.
  • In other news about student journalism, the former office manager of The Dartmouth, a student paper at Dartmouth College, pleaded guilty to embezzling more than two hundred thousand dollars from the publication; she will now be sentenced and forced to pay the money back. Elsewhere, a newspaper and radio station at the University of the Pacific in Stockton, California, are facing steep budget cuts after the student government proposed eliminating their school funding; CBS Sacramento’s Esteban Reynoso has more. And Quinn Mitchell, a high school journalist in New Hampshire who has attended more than a hundred presidential campaign events, wrote for CNN about his experience of being kicked out of an event and physically intimidated by a candidate’s security detail.
  • Politico’s Natalie Allison, Alex Isenstadt, and Brittany Gibson report that Trumpworld is growing increasingly alarmed at Robert F. Kennedy Jr.’s tour of conservative media, as a candidate once perceived as primarily a threat to President Biden now threatens to pull votes from Trump as well. “A Politico analysis of Kennedy’s 69 media appearances since January, as listed on his campaign’s website, found a plurality of them—nearly half—were with conservative, libertarian-leaning, or openly anti-‘woke’ hosts,” Allison, Isenstadt, and Gibson write, “with the remaining interviews divided between liberal, politically neutral, and spiritual or environmentalist hosts.”
  • New York’s Justin Miller checked in on the Daily Beast, where morale has reportedly tanked since Joanna Coles and Ben Sherwood bought a minority stake and Coles took over editorial operations. (Among other things, Coles promised to hire reporters to cover Lauren Sanchez, the wife of Jeff Bezos, and Meghan Markle’s orchard; it’s not clear if she was joking.) By the end of Coles’s first week, Miller writes, “at least a dozen staff were looking elsewhere for jobs or hoping for buyouts,” while for those left, “fear of layoffs is widespread and morale is so low that some have been crying behind closed doors.”
  • And for The Emancipator, a digital magazine that aims to reimagine America’s first abolitionist newspapers for the present era, the historian Anne G’Fellers-Mason dived into the legacy of Elihu Embree, who founded the original Emancipator in 1820—despite himself enslaving a woman named Nancy and her children. “There are often more questions than answers” about Nancy’s life, G’Fellers-Mason writes—but “I’m not sure the original Emancipator would have existed without her.”

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Mathew Ingram is CJR’s chief digital writer. Previously, he was a senior writer with Fortune magazine. He has written about the intersection between media and technology since the earliest days of the commercial internet. His writing has been published in the Washington Post and the Financial Times as well as by Reuters and Bloomberg.