Sell-by date

The most consequential piece of technology regulation Congress has passed in years arrived as a rider. On 24 April 2024 President Joe Biden signed a law that forces ByteDance to sell TikTok or watch it vanish from American app stores, and he signed it as part of a foreign-aid package for Ukraine, Israel and Taiwan.^{1NPR, via OPBPresident Biden signs law to ban TikTok nationwide unless it is sold24 Apr 2024} The Senate had approved it a few hours earlier by 79 votes to 18.^{3SiliconANGLEPresident Biden signs law requiring ByteDance to sell TikTok or face US ban24 Apr 2024} An app used by 170 million Americans, about half the country, now has a deadline.^{1NPR, via OPBPresident Biden signs law to ban TikTok nationwide unless it is sold24 Apr 2024}

The terms are simple enough. ByteDance has 270 days, about nine months, to find a buyer. The President may grant a single extension of up to 90 days, but only after certifying to Congress that a path to a sale exists and that there is “evidence of significant progress toward” it.^{2TechCrunchBiden signs bill that would ban TikTok if ByteDance fails to sell the app24 Apr 2024,3SiliconANGLEPresident Biden signs law requiring ByteDance to sell TikTok or face US ban24 Apr 2024} Failing that, Apple and Google must stop offering the app, and data centres may not host it.^{1NPR, via OPBPresident Biden signs law to ban TikTok nationwide unless it is sold24 Apr 2024,3SiliconANGLEPresident Biden signs law requiring ByteDance to sell TikTok or face US ban24 Apr 2024} The House’s earlier version offered six months; the Senate was more generous.^{1NPR, via OPBPresident Biden signs law to ban TikTok nationwide unless it is sold24 Apr 2024,3SiliconANGLEPresident Biden signs law requiring ByteDance to sell TikTok or face US ban24 Apr 2024} That is the whole of the policy. It is a divestiture order with a clock, not a ban, and the distinction matters.

We think the principle is sound. A platform that holds the viewing habits of half of America should not answer, in the last resort, to a government that treats the free flow of information as a risk to be managed. Senator Maria Cantwell put it narrowly: “Congress is not acting to punish ByteDance, TikTok, or any other individual company.”^{1NPR, via OPBPresident Biden signs law to ban TikTok nationwide unless it is sold24 Apr 2024} The remedy is also the mildest available. Nobody is jailed and nothing is seized. The owners are told to sell a business, which is what owners do for a living.

The better objection is that Washington has done this the wrong way round. The statute targets one firm, which invites a First-Amendment challenge, and TikTok has already promised one, calling the measure an “unconstitutional law” that is “a TikTok ban.”^{2TechCrunchBiden signs bill that would ban TikTok if ByteDance fails to sell the app24 Apr 2024,3SiliconANGLEPresident Biden signs law requiring ByteDance to sell TikTok or face US ban24 Apr 2024} It says a ban would hurt seven million businesses and silence 170 million Americans.^{2TechCrunchBiden signs bill that would ban TikTok if ByteDance fails to sell the app24 Apr 2024} Some of that is advocacy. But a general rule, applying to any app above a set size that is controlled by a foreign adversary, would have rested on firmer ground. It would also have spared Congress the awkwardness of attaching a regulatory penalty to a bill about aid for Kyiv.

Senator Ed Markey offers the sceptic’s version: there is “no credible evidence” that TikTok presents a real security threat, he said, and “American companies are doing the same thing, too.”^{1NPR, via OPBPresident Biden signs law to ban TikTok nationwide unless it is sold24 Apr 2024} The second half is a fair point, and an argument for a national privacy law. The first half misses the nature of the risk. Nobody needs a smoking gun to worry about an owner that its home government can compel. A lock that has not yet been picked is still a poor reason to leave the door open.

The harder question is whether a sale can happen at all. Beijing says it will not help. Its foreign ministry called the bill “at odds with the principles of fair competition,” and an analyst at Albright Stonebridge thinks Beijing is “unlikely to approve this type of forced” deal.^{4CNBC, via NBC NewsThe U.S. wants ByteDance to sell TikTok. China is almost certainly going to refuse15 Mar 2024} When America’s foreign-investment committee ordered a sale last year, China’s commerce ministry replied that a divestiture would mean “exporting this technology”, which needs a licence under Chinese law.^{4CNBC, via NBC NewsThe U.S. wants ByteDance to sell TikTok. China is almost certainly going to refuse15 Mar 2024} The recommendation algorithm is the prize, and the American business, CNBC reports, cannot function without it.^{4CNBC, via NBC NewsThe U.S. wants ByteDance to sell TikTok. China is almost certainly going to refuse15 Mar 2024} Bloomberg reports that ByteDance means to exhaust its legal options before it considers selling.^{3SiliconANGLEPresident Biden signs law requiring ByteDance to sell TikTok or face US ban24 Apr 2024}

So we are likely to get a long fight rather than a quick sale. That is not an argument against the law. It is an argument for being honest about what it is: a request that a Chinese champion hand over its crown jewel, to which the opening reply is a lawsuit. Washington should be ready for either outcome, and should resist the temptation, if a buyer appears, to bless a deal that leaves the algorithm and the data in the same hands as before.

A market economy is not obliged to be hospitable to every owner. It should, however, say in advance what it expects of them. A rule that applied to every foreign-controlled platform, with the same clock for all, would have been duller. It would also have been harder to strike down.

TikTok’s users have long been told that nothing lasts. They may now find out how long that is: nine months, plus perhaps one extension.