A more recent addition to the world of social media apps, the platform TikTok has been in the news as of late due to its proposed banning by U.S. President Donald Trump. Marketed primarily towards a teen demographic, TikTok boasts a userbase upwards of 800 million and content consists of shared video clips a minute in length or less.
Why Is the Platform Getting Into Trouble?
While the social media service does have a sizable following in the United States, it’s ultimately owned and operated by a Chinese company. Recent political tensions between China and the United States have raised concerns the Chinese government will put pressure on the company that owns TikTok to hand over user data, which might pose a national security risk. The company claims this shouldn’t be an issue as their servers are located in the United States; however, national security officials are convinced the Chinese government could still access user data.
Sanctioning the Company Might Be a Possibility
Under the International Emergency Economic Powers Act, the president can place sanctions on foreign companies in situations where national security interests are at stake. Sanctions can include increased regulation of a company, outright denying access to the U.S. economy, and even the freezing of assets. To do this, the president must declare a national emergency, with a specific justification as to why. In the case of TikTok, an exact justification might be difficult to come up with due to the speculative nature of the platform being a national security threat.
TikTok Might Have to Be Sold Off
The President also has the authority to mandate TikTok’s sale under the Defense Production Act. The Exon-Florio provision of the act allows the president to utilize the Committee on Foreign Investment in the United States (CFIUS) to prevent mergers or acquisitions of foreign companies which operate in the United States. This is only allowed to occur on the condition such actions are deemed to threaten national security. The company which owns TikTok wasn’t subject to CFIUS policy when it purchased music.ly (the app TikTok is based on) in 2018, but a review was made into the acquisition in November of 2019. Legally, if the acquisition is deemed a national security threat, the president can require TikTok to be sold to a different company if TikTok is still going to be operating in the United States.
What’s the Most Likely Outcome?
The company that owns TikTok could possibly contest a CFIUS decision on constitutional grounds, although the disproportionate legal power given to the executive in this instance means their efforts likely wouldn’t mean much. There is also the possibility the president won’t be able to declare a national emergency due to a lack of specified justification, but this too is unlikely. Regardless of whatever legal outcome occurs though, the turbulence of this issue will ultimately cause the platform to experience a serious fluctuation in users, which will be very difficult to recover from