The Senate has passed legislation that would force TikTok’s China-based parent company to sell the social media platform under the threat of a ban, a contentious move by U.S. lawmakers that’s expected to face legal challenges and disrupt the lives of content creators who rely on the short-form video
Likewise, I think this bill could be used against companies with Chinese investment, like anything Tencent investment (e.g. Fortnite, League of Legends, etc).
IANAL but I believe that would not be covered under this bill. Those games are run by American companies with foreign investment.
Maybe when it gets to the point where the foreign power is the majority shareholder. However, I think in a publicly traded company they’d just be forced to divest and that would likely take a different law.
(1) CONTROLLED BY A FOREIGN ADVERSARY.—The term “controlled by a foreign adversary” means, with respect to a covered company or other entity, that such company or other entity is—
(A) a foreign person that is domiciled in, is headquartered in, has its principal place of business in, or is organized under the laws of a foreign adversary country;
(B) an entity with respect to which a foreign person or combination of foreign persons described in subparagraph (A) directly or indirectly own at least a 20 percent stake;
So if someone from an adversary country directly or indirectly owns at least 20% of the company, which I’m pretty sure applies to what I’ve said.
But the text needs to apply to a “covered company,” which is intended to focus on social media, but here’s the text:
Division H, (g)(2)
A) IN GENERAL.—The term “covered company” means an entity that operates, directly or indirectly (including through a parent company, subsidiary, or affiliate), a website, desktop application, mobile application, or augmented or immersive technology application that—
(i) permits a user to create an account or profile to generate, share, and view text, images, videos, real-time communications, or similar content;
(ii) has more than 1,000,000 monthly active users with respect to at least 2 of the 3 months preceding the date on which a relevant determination of the President is made pursuant to paragraph (3)(B);
(iii) enables 1 or more users to generate or distribute content that can be viewed by other users of the website, desktop application, mobile application, or augmented or immersive technology application; and
(iv) enables 1 or more users to view content generated by other users of the website, desktop application, mobile application, or augmented or immersive technology application.
So if you have more than 1M monthly active users and allow users to share and view text, images, video, etc with at least 1 person, then you’re a covered company. I’m pretty sure that could apply to many things outside of social media.
There’s an exclusion in (g)(2)(B) for “product reviews,” so maybe EGS is safe, but I’m not sure because the primary purpose of EGS isn’t reviews, it’s selling games.
However, the above are merely qualifiers, so it must also satisfy section (g)(3), which states either:
A - is related to ByteDance or TikTok (mentioned by name)
B - the President decides it’s a threat to national security
So Fortnite, LoL, etc wouldn’t be caught immediately by the law like TikTok is because they haven’t been specifically mentioned, but I think they quality, so they could be impacted if the President thinks they’re a threat to national security. And the burden of proof there is pretty minimal, the President just submits notice to Congress at least 30 days before doing anything about it. If Congress is already in board (lobbyists and whatnot), that won’t be an issue.
For timing, you have 165 days from when this law takes effect or 90 days from any action under this law. So here’s a scenario:
President publicly notifies Congress that it’s considering marking Fortnite as a threat to national security - juicy bits sealed in a classified annex
30 days later, the President publicly determines Fortnite is a national security threat
90 days later, the statute of limitations has passed, and the President instructs the Attorney General to issue fines through the appropriate district court
My understanding is that if the company doesn’t challenge the initial public notice (2), they could lose their ability to fight the fines in the courts. So the question is, how much leeway does the President have to obfuscate that so the lawyers miss it? Is it sufficient for the President to post to that White House website?
This scenario is pretty unlikely, but it’s just a small bill change away from being a lot easier to sneak through (like making the public notice optional).
The bill is not nearly as bad as I thought it would be (earlier versions were worse), so it’s likely this will only apply to TikTok for now. But I’m worried about giving the President so much autonomy here. There’s no requirement that the company or app is actually harmful, just that the President decides it’s a threat. Oh, and I could probably be fined if I distribute TikTok or similar from a personal website after this bill goes live, though I think I can share a link for them to download it, provided the servers aren’t hosted by me and are hosted in another country.
IANAL but I believe that would not be covered under this bill. Those games are run by American companies with foreign investment.
Maybe when it gets to the point where the foreign power is the majority shareholder. However, I think in a publicly traded company they’d just be forced to divest and that would likely take a different law.
Here’s what I read in the bill:
Division H, (g)(1)
So if someone from an adversary country directly or indirectly owns at least 20% of the company, which I’m pretty sure applies to what I’ve said.
But the text needs to apply to a “covered company,” which is intended to focus on social media, but here’s the text:
Division H, (g)(2)
So if you have more than 1M monthly active users and allow users to share and view text, images, video, etc with at least 1 person, then you’re a covered company. I’m pretty sure that could apply to many things outside of social media.
There’s an exclusion in (g)(2)(B) for “product reviews,” so maybe EGS is safe, but I’m not sure because the primary purpose of EGS isn’t reviews, it’s selling games.
However, the above are merely qualifiers, so it must also satisfy section (g)(3), which states either:
So Fortnite, LoL, etc wouldn’t be caught immediately by the law like TikTok is because they haven’t been specifically mentioned, but I think they quality, so they could be impacted if the President thinks they’re a threat to national security. And the burden of proof there is pretty minimal, the President just submits notice to Congress at least 30 days before doing anything about it. If Congress is already in board (lobbyists and whatnot), that won’t be an issue.
For timing, you have 165 days from when this law takes effect or 90 days from any action under this law. So here’s a scenario:
My understanding is that if the company doesn’t challenge the initial public notice (2), they could lose their ability to fight the fines in the courts. So the question is, how much leeway does the President have to obfuscate that so the lawyers miss it? Is it sufficient for the President to post to that White House website?
This scenario is pretty unlikely, but it’s just a small bill change away from being a lot easier to sneak through (like making the public notice optional).
The bill is not nearly as bad as I thought it would be (earlier versions were worse), so it’s likely this will only apply to TikTok for now. But I’m worried about giving the President so much autonomy here. There’s no requirement that the company or app is actually harmful, just that the President decides it’s a threat. Oh, and I could probably be fined if I distribute TikTok or similar from a personal website after this bill goes live, though I think I can share a link for them to download it, provided the servers aren’t hosted by me and are hosted in another country.