© Bloomberg. The logo for ByteDance Ltd.’s TikTok app is arranged for a photograph on a smartphone in Hong Kong.
(Bloomberg) — After months of wrangling over how to limit TikTok in the US, legislation that stops short of an outright ban of the Chinese-owned app seems to be gaining the most momentum — even as key questions remain.
Senator Mark Warner, the Democratic chairman of the Senate Intelligence Committee and an outspoken critic of TikTok, plans to introduce the bill Tuesday that’s expected to give the Biden administration the power to prohibit foreign technologies or companies when necessary.
Who likes this bill?
The bill doesn’t mention TikTok, the popular short-video app, by name, which may be part of its appeal.
Commerce Secretary Gina Raimondo said in interview last month that “it’s dangerous business” to “pass a law to outlaw a particular company. I think it’s probably more thoughtful to say, ‘These are the kinds of risks we’re worried about, from these categories of companies and we’re going to enable some department to run a process to assess the risk and take action.’”
“We’ve worked extraordinarily closely with the administration,” Warner told reporters Tuesday, ahead of a 3 p.m. press conference where he was set to unveil his legislation. “I would be disappointed if they didn’t support it, having taken as much input as we took from them.”
Warner’s approach also has bipartisan support: a cosponsor is Senator John Thune of South Dakota, the chamber’s No. 2 Republican.
Investors seem to like the bill’s chances. Snapchat owner Snap Inc (NYSE:SNAP). surged almost 9.5% on Monday on anticipation of the bill’s release by Warner. Pinterest (NYSE:PINS) Inc., which competes with Snap for digital advertisements, and Youtube owner Alphabet (NASDAQ:GOOGL) Inc. rose 1.6% in the same trading session.
A bill like Warner’s could solve a major dilemma for the Biden administration. For months, the administration has been trying to come to a national-security deal with TikTok that would limit China’s ability to access US user data. But that process has stalled, in part because the administration is wary of the blowback from Republicans who argue any deal that allows TikTok to keep operating is too risky.
What’s the likeliest outcome?
Lawmakers have two main concerns with TikTok, which has about 100 million users in the US. First, TikTok’s opponents in Congress have rejected the company’s assurances that its Beijing-based parent company, ByteDance Inc., doesn’t have access to US user data, including viewing patterns and geolocation. Second, reports that TikTok promotes or hides certain content has raised questions about whether Chinese authorities could influence what content American users see.
One possibility is that passage of legislation would force Bytedance to sell TikTok. That would solve some problems for the US in defusing any political tension over the app’s ownership.
“We have certainly made clear some of our national security concerns with respect with respect to the TikTok application, which is why it’s not authorized for use on government devices,” National Security Council spokesman John Kirby (NYSE:KEX) said Tuesday.
The bill would still need to go through a Senate committee, and it’s unclear where the measure ranks among Chuck Schumer’s priorities. As Senate majority leader, he determines whether it would come to the floor for a vote.
Also unknown is whether the House of Representatives, where hawkish Republicans are in control, will take up Warner’s bill.
There are several other, more drastic TikTok bills in the House. A Republican-only bill from House Foreign Affairs Committee Chairman Michael McCaul would give the president authority to sanction any app. Another GOP bill, from Missouri Senator Josh Hawley, would limit TikTok’s operations in the US.
Congress has already banned TikTok on government devices, and the Biden administration recently issued guidance giving federal employees 30 days to remove it.
What’s TikTok’s response?
The growing backlash has had TikTok waging an all-out charm offensive globally for months. To drum up goodwill and defend its data protection and content moderation policies in Washington, executives have enlisted a star-studded group of lobbyists to engage with more than 100 congressional offices. In the second quarter of last year, TikTok spent $2.1 million on lobbying on issues including children’s privacy, content moderation and antitrust — the most to date.
TikTok has presented a security plan called Project Texas that pledges to insulate the company’s US operation from Chinese influence. The plan includes an independent board of directors to oversee data security, third-party vetting and a partnership with Oracle Corp (NYSE:ORCL). to store user data and audit the platform’s algorithms.
“The goal here is to have a massive amount of oversight,” Will Farrell, who leads TikTok’s US Data Security team, said at a conference in Washington Monday. “So you don’t have to take our word for it.”