TikTok divestment bill gets a boost from Senate Republican leader Mitch McConnell
There’s so much TikTok news around! Let’s start with the biggest: Mitch McConnell (R-Ky.), the Senate Republican leader, has thrown his weight behind the push to make TikTok parent ByteDance choose between divesting the company or seeing it effectively banned in the U.S.
McConnell told senators that TikTok was a strategic threat because China treats it “as a tool of surveillance and propaganda” and Beijing’s “influence and control has been baked in from the beginning.” The Senate minority leader dismissed TikTok’s insistence that the divestment move would violate the First Amendment, claiming that it “would land squarely within established constitutional precedent” while beginning to “turn back the tide of an enormous threat to America’s children and to our nation’s prospects in the defining competition of the 21st century.”
The House bill on the subject passed four weeks ago by an impressive margin of 352-65, but its chances in the Senate are far less certain. House Republicans generally chose to ignore former and perhaps next president Donald Trump, whose position recently flip-flopped to opposing a TikTok ban—a likely outcome, given Beijing’s opposition to any divestment.
A key player in the Senate is Commerce Committee chair Maria Cantwell (D-Wash.), who hasn’t made up her mind yet, but says she’s planning to figure out a game plan with Senate Democratic Leader Chuck Schumer (D-N.Y.) and Intelligence Committee chair Mark Warner (D-Va.). It’s probably worth noting that Cantwell is also busy preparing to introduce a wide-ranging federal privacy bill that would rein in some of TikTok’s data practices—as well as those of its Big Tech peers—but that would probably fall short of addressing those (still unproven) national security concerns.
Meanwhile, all this fuzziness about TikTok’s future in the U.S. is hurting the company’s employees there. As reported today by the Financial Times, many of ByteDance’s U.S. workers have found themselves on the hook for income tax on their restricted stock in the firm, which has vested but which they generally can’t sell because—lacking major liquidity as a result of the uncertainty—ByteDance has only held small buyback programs, while also stopping workers from selling to outside investors.
The company told the FT that it adheres to U.S. tax laws and has “provided an on-call service for employees to have their questions and concerns addressed.” (See also: my colleague Alexandra Sternlicht’s piece from a month back on how former employees have accused TikTok of using its stock compensation to stop them criticizing ByteDance, by threatening to seize their restricted stock if they do.)
There’s also a couple of tidbits out there about TikTok’s product strategy. The Information reports that TikTok is introducing a new app in European countries, including Spain and France, that gives people points if they watch videos and invite friends to sign up: The points can then be redeemed as gift cards or creator tips. This new “TikTok Lite” app is apparently a reaction to the service’s slowing European growth.
And, as TechCrunch reports, TikTok has been notifying users that their photo posts will be shown on an upcoming service called TikTok Notes, which looks like an Instagram competitor, unless they opt out. The publication previously reported the imminence of this new platform, which was revealed in TikTok’s installer code, though at the time it seemed it would be called TikTok Photos, which frankly makes a heck of a lot more sense.
More news below.
David Meyer
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This story was originally featured on Fortune.com
