Washington:

Erich Andersen, general counsel for TikTok and Chinese parent company ByteDance, said on Friday he will step down from the role in June, according to a company statement.

Andersen will become special counsel to the company to focus on helping lead TikTok’s effort to overturn legislation signed into law by President Joe Biden on Wednesday that gives ByteDance 270 days to divest short-video app TikTok in the United States or face a ban.

TikTok said this week it plans to file a lawsuit to challenge the legislation, but has declined to say when it plans to do so.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)

Washington:

TikTok on Wednesday said it will fight a new US law that orders the popular video sharing app to break away from its Chinese owners or face an outright ban in the United States.

Here is what could happen next for one of the world’s most downloaded apps.

What does the law say?

The bill signed by President Joe Biden gives TikTok 270 days (roughly nine months) to find a non-Chinese buyer or face a ban in the United states. The White House can extend the deadline one time only by 90 days.

During that time, the app would continue to operate for its roughly 170 million US users.

What will happen in the courts?

Tiktok says it will fight the law in the US courts, saying that it grossly violates free speech rights.

The company has some reason to feel that it will prevail; in 2020, the company survived a similar order from then President Donald Trump.

TikTok filed a lawsuit challenging the ban, and a federal judge temporarily blocked Trump’s effort, saying the reasons for banning the app were likely overstated and that free speech rights were in jeopardy.

Still, the Trump administration tried to broker a deal in which data server firm Oracle and supermarket giant Walmart would buy a joint stake in TikTok, but those negotiations went nowhere.

The new effort signed by Biden was designed to overcome the same legal headaches and some experts believe the US Supreme Court could be open to allowing national security considerations to outweigh free speech protection, though this is hardly certain.

Trump, who is running for president against Biden, now says he opposes the potential ban as it would benefit rival Meta, the owner of Instagram and Facebook.

Who will buy TikTok?

Finding a buyer for TikTok will be no easy matter given the deep pockets needed to walk home with one of the world’s most popular apps.

Big tech’s usual suspects, such as Meta or YouTube’s Google, will likely be barred from snapping up TikTok over antitrust concerns. They already command too much of the social media market.

Even Microsoft, owner of the more niche LinkedIn and now the world’s biggest company by market capitalization, would face a hard look by competition regulators.

Oracle could be interested in trying again to take part in a deal.

Since its first attempt during the Trump administration, the company controlled by Larry Ellison helped TikTok devise a way to satisfy US national security concerns in a scheme called Project Texas, that essentially carves out US data into a stand alone company, but still owned by ByteDance.

Former Treasury Secretary Steven Mnuchin earlier this month said he was assembling a team of investors to propose an offer for the company, but he has little tech experience and his ambition was considered far fetched by observers.

What if no one buys it?

Barring any decision by the courts, the deadline to sell Tiktok would be roughly one year from April 24 if the 90 day extension is used.

Starting around that time, TikTok would no longer be available on the US Apple or Android app stores and, crucially, software updates and bug fixes would no longer take place.

In other words, Tiktok would slowly wither away, with Bytedance unable to update the app, though it could decide to shutter it completely.

What does China say?

In the battle over TikTok’s US future, China has come out swinging in its defense.

Beijing does not want a precedent to be set where a Chinese company is strong-armed into selling one of its most valuable assets, including an algorithm that is the envy of competitors.

Fears are also rife that an alarming precedent is being set and that other Chinese companies will face a similar fate in the future.

The row was discussed in a phone call between Biden and Chinese President Xi Jinping earlier this month.

Who will benefit?

The clear winners from an eventual ban of TikTok would be Meta and Google, which have launched their own copycats of TikTok: Meta’s Reels and YouTube Shorts.

Both alternatives have been gaining ground in the US market, just as Tiktok appears to be stalling, perhaps affected by the doubts about its future.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)

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| Photo Credit: AFP

China blasted Washington’s “bandit” mentality after the U.S. House passed a bill that would ban TikTok unless it splits from its Chinese owner, and vowed to “take all necessary measures” to protect the interests of its companies overseas.

The short-video app has soared in popularity worldwide but its ownership by Chinese technology giant ByteDance – and alleged subservience to Beijing’s ruling Communist Party – has fuelled concern in Western capitals.

Also Read | U.S. lawmakers see TikTok as China’s tool, even as it distances itself from Beijing

“The U.S. should truly respect the principles of a market economy and fair competition (and) stop unjustly suppressing foreign companies,” Beijing’s commerce ministry spokesperson He Yadong said at a press conference.

Washington should also “provide an open, fair, just, and non-discriminatory environment for foreign companies to invest and operate in the U.S.”, He added.

“China will take all necessary measures to resolutely safeguard its legitimate rights and interests,” he said.

Logic of a bandit

At a separate press briefing, foreign ministry spokesperson Wang Wenbin said the vote “runs contrary to the principles of fair competition and international economic and trade rules”.

“If so-called reasons of national security can be used to arbitrarily suppress excellent companies from other countries, then there is no fairness and justice at all,” Mr. Wang said.

“When someone sees a good thing another person has and tries to take it for themselves, this is entirely the logic of a bandit.”

Prior to the vote, Beijing had warned that the proposed ban would “inevitably come back to bite the United States”.

China has blocked western online platforms such as Facebook and X for years on its heavily-censored internet.

U.S. lawmakers voted 352 in favour of the proposed law and 65 against, striking a rare note of unity in politically divided Washington.

The White House has said President Joe Biden will sign the bill – known officially as the Protecting Americans from Foreign Adversary Controlled Applications Act – into law if it reaches his desk.

But it faces a tricky path through the more cautious Senate, where some are wary of taking dramatic measures against an app with 170 million US users.

TikTok has consistently denied that it is under the control of China’s Communist Party.

Its CEO Shou Zi Chew has urged users to speak out against the vote, and several TikTok creators interviewed by AFP voiced opposition to the proposed ban.

Long-running tensions

The app is at the centre of long-running tensions between China and the United States, which have butted heads in recent years over technology, trade and human rights issues.

Washington has cited national security concerns to limit the activities of some Chinese companies in the United States, as well as the export of certain technologies to China that it deems sensitive.

European regulators are also concerned about the app, with the European Commission on March 14 quizzing TikTok and other platforms such as Facebook, Google and X on what they were doing to counter the risk of AI to elections, including through deepfakes.

China has repeatedly lashed out at what it views as a concerted attempt to “suppress” China’s rise.

Foreign minister Wang Yi said this month that Washington’s “desire to heap blame under any pretext has reached an unbelievable level”.

“The methods used to suppress China are constantly being renewed, and the list of unilateral sanctions is constantly being extended,” Mr. Wang said at a press briefing during annual political meetings in Beijing.

As some of the harshest Republican critics of TikTok soften their stance on the China-backed social media app, one billionaire donor’s name is ricocheting around Washington.

The prospect that the app will be banned has thrust Jeff Yass, the trading mastermind behind market-maker Susquehanna International Group, into an uncomfortable spotlight. That’s because he owns a stake in TikTok’s parent company, ByteDance, which is worth $15 billion, according to the Bloomberg Billionaires Index, the largest single asset in his $40.8 billion fortune.

Yass has used that wealth to become the biggest donor in the 2024 election cycle, with $46.4 million spent so far, mostly focused on the issue of school choice. He’s also been mentioned as a possible candidate for Treasury secretary – along with hedge fund billionaire John Paulson and former US trade representative Robert Lighthizer – should Donald Trump win in November, according to people familiar with the matter.

But with such a large chunk of Yass’ fortune at risk, the registered libertarian’s connections are now being closely watched – in particular whether they’ll try to muster support to kill the bill passed Wednesday by the House of Representatives to ban the app in the US unless ByteDance sells it.

The clearest signal of a reversal came last week when Trump said he was opposed to the bill. That declaration came after he attended a donor event in Palm Beach, Florida, put together by the conservative organization Club for Growth, which counts Yass as one of its biggest backers. (Trump said he hadn’t discussed the issue with Yass in a subsequent interview with CNBC.)

Club for Growth has also dispatched former Trump aide Kellyanne Conway to lobby lawmakers to oppose the TikTok ban. Meanwhile, Vivek Ramaswamy went from calling the platform “digital fentanyl” to opening a TikTok account himself after a super PAC that supported his failed bid for the Republican nomination received money from Yass last year.

A spokesperson for Yass declined to comment.

The legislation, which passed the House by a vote of 352 to 65, next heads to the Senate, where the outlook is less certain. Majority Leader Chuck Schumer has so far declined to endorse it, and members including Republican Rand Paul have come out against it. Some proponents of a ban include Republican politicians whom Yass has backed, like Texas Governor Greg Abbott and Senator Ted Cruz.

Tough Sell

If the bill becomes law, and withstands the expected wave of legal challenges, finding a buyer for TikTok might not be so easy.

The largest US technology companies, with some of the deepest pockets in corporate America, would likely face regulatory scrutiny over a purchase, though Microsoft Corp. was said to be exploring an acquisition of TikTok’s US operations in 2020.

Bobby Kotick, the former chief executive officer of Activision Blizzard, has expressed interest, the Wall Street Journal reported, but he would need to raise more money through partners. (ByteDance denied its co-founder, billionaire Zhang Yiming, was approached.)

And any divestiture would also require approval by the Chinese government, which said last year that it would firmly oppose a forced sale.

As well as TikTok, Beijing-based ByteDance operates a China-only version of the app called Douyin. ByteDance offered to buy back its shares at a valuation of about $268 billion in December. 

Yass is far from the only investor with billions riding on ByteDance. Carlyle Group, KKR & Co., SoftBank Group Corp., and General Atlantic have all invested, according to data provider PitchBook. 

But Susquehanna was one of the first to back the company. SIG China, a venture capital firm Yass established in 2005 to place bets on China’s technology industry, invested in 2012 and owns about 15% of the company. Art Dantchik, co-founder of Susquehanna, is on the ByteDance board.

Back then Yass wasn’t a significant donor in elections, giving about $78,000 in the 2012 federal election cycle, according to data compiled by OpenSecrets. That ballooned to $56.2 million in the 2022 midterms, when he was the fourth-largest donor.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)