Us Lawmakers Propose Delisting Of Apps Owned And Controlled By Tiktok And Bytedance

On March 5, US lawmakers introduced a bill to penalize app stores in the country from listing TikTok or any other application developed or provided by TikTok’s parent company ByteDance. The bill, called “Protecting Americans from Foreign Adversary Controlled Applications Act” classifies ByteDance as a foreign adversary. It defines a foreign adversary as—

• a company or entity domiciled or headquartered in a foreign adversary country (this includes China, North Korea, Russia and Iran)
• any entity in which individuals or entities from a foreign adversary country own a minimum stake of 20%
• a person subject to the directions/control of a foreign adversary country.

Any app store or web hosting service that fails to comply with the bill will be fined any amount that results from multiplying $5,000 by the number of users the ByteDance-owned app/website has in the US. To continue their services in the US, apps and websites owned by ByteDance and TikTok must undergo a divestiture post which they will no longer be under the two companies’ control.

This bill comes soon after US President Joe Biden’s executive order to prevent large-scale transfers of Americans’ sensitive personal data to ‘certain countries of concern’ that have a track record of collecting and misusing American data. This order was notably targeted towards China (which is ByteDance’s country of origin), Russia, Iran, North Korea, Cuba, and Venezuela. The bill has been signed on by 19 US lawmakers so far, as per a Verge report. While the current law focuses solely on TikTok and ByteDance, it points to the possibility that apps and websites from other foreign adversary nations could also be delisted in the US unless they sever ties with their parent companies.

Ongoing action against TikTok:

The key reason for the regulatory concern around TikTok is that under Chinese national laws, all information collected by companies in the People’s Republic of China is required to be shared with the Chinese intelligence services. To ease concern around potential data sharing with Chinese authorities, TikTok started routing American users’ data to US-based servers owned by Oracle in 2022. However, the company’s data practices have continued to be under scrutiny despite the rerouting.

In January this year, TikTok’s chief executive officer Show Zi Chew was questioned by lawmakers about the company’s data practices and what happened to US users’ data prior to it being walled off from its Chinese parent company. While Chew explained that TikTok had started a data deletion plan for the same, lawmakers raised questions about whether said data has been shared with Chinese intelligence. While Chew denied this, US Senator Ted Cruz argued that China compels people subject to the Chinese laws to lie to protect China’s national intelligence secrets, suggesting that Chew could be lying as a result of the law.

Who does the bill apply to?

The bill applies to a website, desktop application, mobile application, or augmented or immersive technology application that is operated, directly or indirectly (including through a parent company, subsidiary, or affiliate), by— ByteDance or TikTok and also a subsidiary of or a successor to the two companies.

It also restricts the hosting/distribution of covered company websites and apps that are controlled by the foreign adversaries in question and have been determined to be a significant threat to national security by the president. The bill only covers websites/apps that permit users to create an account and share and view real-time communications and has more than 1,000,000 monthly 9 active users at least 2 to 3 months before the president determines that they are a threat.

Notably, websites and apps run by a covered company whose primary purpose is to allow users to post product reviews, business reviews, or travel information and reviews are excluded from the scope of the bill. Further, any service necessary to carry out the delisting of websites/apps and also to provide users with their data would be exempt from the provisions of the bill.

What happens to user data under the bill?

Before the delisting of the apps/websites would be required to provide all the available data related to the account of a user upon their request. This would include any data maintained by the website/app related to the user’s account, including the content of their posts. Any app/website that fails to provide user data shall be subject to a fine derived from multiplying its number of users by $500.

Also read:

• US Executive Order Targets Protection Of Sensitive Data From Foreign Threats
• US Proposes KYC Verification For Cloud Services To Combat Cyber Threats
• TikTok CEO Defends Data Practices Amid Senate Scrutiny On Its Chinese Ownership

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