On "Forbes Newsroom," Forbes reporter Emily Baker-White explained the bill signed by President Biden forcing ByteDance to sell TikTok to a U.S. interest, and how this will affect users of the app.
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NewsTranscript
00:00President Biden just signed into law today that has major implications for TikTok.
00:06Emily, thanks so much for joining us and being here on the East Coast.
00:09It's great to be here.
00:10So we were just talking before we started rolling about how complicated some of this
00:15has been, but let's break it down.
00:16President Biden just signed a $95 billion foreign aid bill.
00:22But within this bill, there is a little something that affects the future of TikTok.
00:27Maybe little is the wrong word.
00:29What exactly did he sign today and what does it mean for TikTok users in the U.S.?
00:32So attached to the foreign aid bill is a provision that would require TikTok's
00:36Chinese parent company, ByteDance, to divest from TikTok.
00:41And if ByteDance does not divest from TikTok in approximately nine months,
00:47there will be a ban of TikTok in the U.S.
00:49So this is essentially the U.S. government saying,
00:51we are not comfortable with you, ByteDance, owning and controlling this app.
00:56And unless you sell it, at least the U.S. portion of it,
01:01we're going to ban TikTok in the United States.
01:03Now, you mentioned that nine-month time frame.
01:05So the clock starts now.
01:07What do you expect to happen in the next nine months?
01:09Will ByteDance divest?
01:12It doesn't seem likely.
01:13ByteDance seems to be saying that they're not going to divest,
01:16and they may not actually have a meaningful choice in the matter.
01:19So last time this came up was in 2020,
01:23when President Trump threatened to ban TikTok if ByteDance didn't divest from it.
01:28And there were negotiations at the time.
01:32ByteDance was talking to Microsoft.
01:33They were talking to Oracle.
01:35And apparently, they got pretty close to selling off the U.S. part of TikTok.
01:40But at the last minute, the Chinese government came in,
01:42and they changed their export regulations to say that ByteDance would have to get a license
01:47to sell the TikTok recommendations algorithm.
01:50That was now a sort of sensitive category of things to be exported.
01:55Now, that means the Chinese government has a say, again,
01:58in whether ByteDance sells TikTok, at least TikTok with its recommendations algorithm.
02:03And the Chinese government has suggested that they will not allow ByteDance to sell that asset.
02:08So what's interesting about what you just said is,
02:10it sounds to me, correct me if I'm wrong,
02:12that if there was an American company who said,
02:14we have X amount of money, we want to acquire TikTok with it,
02:20ByteDance might not bite because of the Chinese government?
02:24Yeah, that's definitely a possibility.
02:27There aren't that many U.S. companies that probably have enough cash to buy TikTok.
02:32Since the last time that this asset was potentially on the market,
02:36it's only risen in value.
02:38It's incredibly expensive.
02:40It's incredibly sort of big and important.
02:42It has 170 million American users, right?
02:45So there aren't that many companies that could acquire it.
02:47And some of the companies that might acquire it might not be able to for any trust reasons.
02:51So that really, we're talking about a narrow pool.
02:54But yes, even if there was a company that wanted to buy TikTok U.S. with the algorithm,
03:01ByteDance might not be allowed to sell TikTok U.S. with the algorithm
03:05if the Chinese government tried to stop it from doing so.
03:09Is that something we won't know for another nine months?
03:11Or could the Chinese government come out tomorrow and say,
03:15no, we're not allowing this, so you might as well ban the app?
03:18The Chinese government has suggested that they oppose any sale of the TikTok app.
03:26They could change their minds.
03:28They could be more definitive.
03:29They could make sort of more definitive statements either way
03:32now that the bill has become law.
03:33But yeah, it depends.
03:38We might have clarity sooner.
03:39We might have clarity later.