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US House Representative Moves to Pressure ByteDance on TikTok Divestiture

 |  March 6, 2024

Representative Mike Gallagher, a leading House Republican, has escalated efforts to compel ByteDance, the Chinese tech giant, to divest its popular social media platform, TikTok, within the U.S. market. The legislative push, introduced on Tuesday alongside Representative Raja Krishnamoorthi, a top Democrat on the House panel on China, has intensified calls for ByteDance to sever ties with TikTok or potentially face a U.S. ban, citing concerns over national security.

Gallagher emphasized the importance of American investors urging China to facilitate the sale, asserting that it would be in their best interest to allow a separation between ByteDance and TikTok. The proposed legislation stipulates a timeline of approximately six months for ByteDance to execute the divestment or face severe consequences. The House Energy and Commerce Committee is scheduled to vote on the bill on Thursday, signifying bipartisan support for the initiative.

However, experts have cautioned that navigating the intricate web of international regulations and diplomatic hurdles might prove to be challenging. Alex Capri, a senior lecturer at the National University of Singapore and a research fellow at the Hinrich Foundation, outlined potential obstacles ByteDance could encounter. Capri noted that despite pressure to divest, the Chinese government is likely to block any sale, even if ByteDance and other mainland investors were compelled to relinquish their shares.

Related: Lawmakers Push Bill to Force ByteDance Divestment: TikTok Faces US Ban

Capri further highlighted the legal ramifications ByteDance could face within China if it were to transfer ownership or critical technology to the United States without Beijing’s explicit approval. This underscores the intricate geopolitical landscape ByteDance finds itself navigating, with repercussions extending beyond mere legislative mandates.

The proposed legislation, if passed, would grant ByteDance a window of 165 days to divest TikTok, failing which the app would cease to be available on U.S. app stores or accessible via web-hosting services in the country. Such measures reflect the growing apprehension within U.S. political circles regarding the influence and potential security risks posed by Chinese tech companies operating within American borders.

As tensions persist between the world’s two largest economies, the fate of TikTok in the United States remains uncertain, with legislative maneuvers poised to significantly impact its future trajectory. The ongoing saga underscores the complex interplay between economic interests, national security imperatives, and geopolitical tensions shaping the global tech landscape.

Source: Reuters