Legislative Council Prepares to Deliberate on Mandate to Divest TikTok from ByteDance This Week

This week marks a significant development in the United States as the Energy and Commerce Committee has passed a draft law to separate TikTok from its Chinese parent company, ByteDance. Despite TikTok’s previous assurances of not sharing user data with the Chinese government, this law will now be considered by the House of Representatives on Wednesday. President Joe Biden has expressed his willingness to sign the law if it passes through Congress, requiring TikTok to divest from ByteDance within approximately 5 months to continue operating in the US, without any Chinese ownership. In the event of non-compliance, TikTok’s services will be suspended in the United States.

Upon the news of the draft law passing, TikTok sent notifications to American users prompting them to voice their objections to members of Congress. This led to a significant number of complaints from content creators who are concerned about the impact on their revenue and benefits. With approximately 170 million users in the US, TikTok’s fate hangs in the balance.

In recent developments, Bobby Kotick, former CEO of Activision, has initiated talks with Zhang Yiming, ByteDance’s CEO, regarding the potential sale of TikTok, if the law is successfully enacted. The proposed deal’s price remains undecided, with Kotick seeking partners for the deal, including Sam Altman, CEO of OpenAI, who aims to leverage AI models on TikTok under potential new ownership.

However, many members of Congress are at odds with the proposed law to separate the company, while former President Donald Trump, who previously pushed for a ban on TikTok in 2020, has expressed support for the move on his Truth Social platform, claiming it would benefit Facebook.

Currently, TikTok in the US stores all data in Oracle data centers to comply with regulations established in 2020.

Source: The Wall Street Journal

TLDR: The Energy and Commerce Committee in the US passes a law to separate TikTok from its Chinese parent company, ByteDance, with potential implications for the future ownership and operation of the popular social media platform.