TikTok ban looms as President Biden signs law with 270-day sales deadline

For TikTok, the clock is ticking on its existential battle to avoid a US ban.

Legislation requiring the Chinese owners of the social media app to divest moved through Congress, narrowed by Senate passage late Tuesday as part of a larger foreign aid package. President Joe Biden signed the law into law on Wednesday, starting a 270-day countdown to sell or ban the popular video-sharing platform in the US.

TikTok and Beijing-based ByteDance have vowed to do everything they can to stop the measure. They claim it violates the free speech rights of the app’s 170 million monthly US users and plan to file lawsuits to overturn the law or at least delay its implementation.

“We believe the facts and the law are clearly on our side and we will ultimately prevail,” TikTok said Wednesday in an X post.

Biden’s signature culminates years of scrutiny in Washington, where regulators and lawmakers from both parties have expressed heightened concern that Chinese ownership of TikTok poses a risk to US national security. Supporters of the bill argue that the Chinese government is using TikTok as a propaganda tool and could require ByteDance to share user data in the US – claims the company and officials in Beijing have denied.

With the legal battle about to unfold, TikTok users in the US are facing a wave of uncertainty about a place to express themselves through video, make money as an influencer or sell goods on the TikTok Shop. If implemented, TikTok’s ban risks disrupting “a critical channel for engaging with younger audiences and building brand visibility,” said Damian Rolison, director of market insights at SOCi.

“TikTok’s unique format has allowed businesses to showcase products and services creatively, using trends and user-generated content to connect with potential customers,” Rollison said.

TikTok cited economic arguments against the law, saying that content creators and marketers who make their living posting videos and selling goods would be financially harmed. Although many US lawmakers who supported the newly passed federal bill believe it will survive judicial review, some rights groups say the First Amendment will be a tougher hurdle to overcome.

“The U.S. government can say a foreign company can’t do business in the U.S. — it’s just harder when the foreign business is a communications system that American consumers use to communicate with each other,” David Green, director of civil freedoms at the Electronic Frontier Foundation, said in an interview. “It just has different legal issues.”

When Montana passed a law in 2023 that banned TikTok in the state, the company and a group of content creators sued in separate claims, saying the state measure violated free expression rights under the US Constitution’s First Amendment. The company funded the consumer lawsuit, according to the New York Times. The judge hearing the case blocked the ban before it could take effect.

ByteDance is viewing the sale of TikTok as a last resort, according to people familiar with the matter. TikTok’s parent expects it could get a restraining order on the legislation, followed by a legal battle that could last more than a year, Bloomberg reported.

“We will continue to fight,” Michael Beckerman, TikTok’s head of public policy for the Americas, said in a memo to US staff last week. “This is the beginning, not the end, of this long process.”

If TikTok can’t delay enforcement through the legal system, another chance to avoid a split may be with a new administration. Biden’s signing of the bill on Wednesday sets the deadline for the sale on Jan. 19, the day before the next presidential inauguration.

Under the bill, Biden has the option to extend that deadline for an additional 90 days if he sees progress toward a sale. That would delay a possible ban until the next presidential term.

Biden’s opponent in the November election, Donald Trump, recently spoke out against a ban on TikTok, saying it could give rival Meta Platforms Inc a boost. — who previously suspended Trump from his platforms. For Trump, it marked a reversal of his decision while president to ban the app through a 2020 executive order that was later overturned by federal courts.

The political sensitivity of targeting a social media platform popular with younger users during a US election year was not lost on the bill’s supporters.

“This is not an attempt to take away your vote,” Sen. Mark Warner, D-Va. and chairman of the Intelligence Committee, said Tuesday before the vote. “To young Americans, I want to say that we hear your concern. We hope that TikTok will continue under new ownership.”

The move marks a major setback in Washington for ByteDance, which spent $2.7 million in the first quarter on federal lobbying efforts after shelling out a record $8.7 million last year, according to congressional filings. TikTok CEO Shou Chew made personal appeals on Capitol Hill in an unsuccessful attempt to squelch the legislation.

The company, meanwhile, has spent more than $2 billion protecting sensitive user data in the U.S. with the help of Texas-based Oracle Corp. to try to show its platform is safe.

With the app once again in regulatory and legal limbo, many TikTok users are still on the run. But those making money from the app are reconsidering their options.

Educational Insights, which owns the popular puzzle game Kanoodle, has been using TikTok videos for several years to promote its products. The company was among the first merchants to join the TikTok Shop as part of an early test before it officially went live.

“We’re definitely watching closely right now,” said Alyssa Weiss, senior marketing manager for Educational Insights. “We will be ready to change if the need arises, but for now we are still actively implementing our plans for TikTok.”

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