Recent TikTok ban is poised to advance in Congress

WASHINGTON — The U.S. House Foreign Affairs Committee plans to take up laws Tuesday that may give President Joe Biden the authority to ban TikTok, the Chinese social media app utilized by greater than 100 million Americans.

The panel is scheduled to vote on a series of China related bills Tuesday afternoon, including one that may revise the longstanding protections which have shielded distributors of foreign creative content like TikTok from U.S. sanctions for many years. Introduced last Friday, H.R. 1153 is anticipated to pass the committee on Tuesday.

The bill that would ultimately ensnare TikTok, owned by China’s ByteDance, only has one sponsor, the committee’s newly seated Republican chairman, Texas Rep. Mike McCaul.

Typically, a bill this latest, with just one sponsor, wouldn’t move to committee votes just days after it was introduced. However the selection of which bills will advance through a committee is made by each committee’s chairman, so McCaul’s sponsorship is effectively all of the bill needs.

If the measure is approved by a majority of the committee members and referred to the complete House for a vote, as expected, H.R. 1153 will effectively leap frog several other proposals to ban TikTok that were previously introduced within the House and Senate, but have not yet advanced through the committee process.

After that, McCaul’s bill would likely pass the Republican-controlled House easily. But its fate within the Democratic majority Senate is unclear.

Despite the bitter divisions between the 2 parties on nearly every major issue, there’s one thing each Democrats and Republicans overwhelmingly support: proactive measures to stem China’s growing global influence. And H.R. 1153 could try this.

In practical terms, the bill would revise a gaggle of rules often known as the Berman amendments that were first enacted near the top of the Cold War, intended to shield “informational materials” like books and magazines from sanctions-related import and export bans.

Over time, nevertheless, the Berman amendment was expanded right into a broad rule that courts interpreted as prohibiting the federal government from using sanctions powers to dam trade in any “informational materials,” including digital content, to or from a foreign country.

In 2020, TikTok argued successfully in court that it was covered by the Berman amendment exemption when it beat back attempts by the Trump administration to ban its distribution by Apple and Google app stores.

McCaul told CNBC his bill would change this. “Currently the courts have questioned the administration’s authority to sanction TikTok. My bill empowers the administration to ban TikTok or any software applications that threaten U.S. national security,” McCaul said in an announcement Monday.

Under McCaul’s bill, the Berman amendment exemptions which have protected TikTok up to now would not apply to firms that engage within the transfer of the “sensitive personal data” of Americans to entities or individuals based in, or controlled by, China.

On first reading, McCaul’s laws appears to be broader than a number of the other TikTok bills which have been introduced to date.

Critics and TikTok lobbyists have argued that those prior bills amounted to punishing the corporate for a criminal offense outside the legal system. In addition they argue that any ban is tantamount to censorship of content protected by the First Amendment.

“It might be unlucky if the House Foreign Affairs Committee were to censor thousands and thousands of Americans,” TikTok spokeswoman Brooke Oberwetter told CNBC in an email Monday.

TikTok is not any stranger to rough political waters, having been within the crosshairs of U.S. lawmakers since former President Donald Trump declared his intention to ban the app by executive motion in 2020.

On the time, ByteDance was trying to potentially spin off TikTok to maintain the app from being shut down.

In September 2020, Trump said he would approve an arrangement for TikTok to work with Oracle on a cloud deal and Walmart on a industrial partnership to maintain it alive.

Those deals never materialized, nevertheless, and two months later Trump was defeated by Joe Biden within the 2020 presidential election.

The Biden administration kept up the pressure. While Biden quickly revoked the chief orders banning TikTok, he replaced them along with his own, setting out more of a roadmap for the way the federal government should evaluate the risks of an app connected to foreign adversaries.

TikTok has continued to have interaction with the Committee on Foreign Investment within the U.S. (CFIUS), which is under the Treasury Department. CFIUS, which evaluates risks related to foreign investment deals, is scrutinizing ByteDance’s purchase of Musical.ly, which was announced in 2017.

The CFIUS review has reportedly stalled, but TikTok spokeswoman Oberwetter said the corporate still favors the deal.

“The swiftest and most thorough approach to address national security concerns is for CFIUS to adopt the proposed agreement that we worked with them on for nearly two years,” she told CNBC on Monday.

Within the meantime, government officials from the Federal Bureau of Investigation and the Department of Justice have publicly warned concerning the dangers of using the app, and plenty of states have imposed bans of their very own.

On Monday, the Biden administration released latest implementation rules for a TikTok ban that applies only to federal government-owned devices, which was passed by Congress in December.

Earlier this month, Sens. Richard Blumenthal, D-Conn., chair of the Senate Judiciary subcommittee on privacy, and Jerry Moran, R-Kan., a member of the Senate Select Committee on Intelligence, said in a letter that CFIUS should “swiftly conclude its investigation and impose strict structural restrictions between TikTok’s American operations and its Chinese parent company, ByteDance, including potentially separating the businesses.”

But while the Executive Branch scrutinizes TikTok through CFIUS, McCaul and the GOP-controlled House should not waiting around for them to act.

“TikTok is a security threat. It allows the CCP to control and monitor its users while it gobbles up Americans’ data for use for his or her malign activities,” McCaul told CNBC.

If TikTok related laws looks prefer it’s moving swiftly through Congress, that would spook investors, and work to the good thing about a number of the company’s biggest competitors.

TikTok has been taking market share from Facebook, Instagram and Google’s YouTube, which have all seen promoting slow dramatically over the past yr.

In keeping with Insider Intelligence, TikTok controls 2.3% of the worldwide digital ad market, putting it behind only Google (including YouTube), Facebook (including Instagram), Amazon and Alibaba.

— CNBC’s Ari Levy contributed to this story from San Francisco.