Apr 23, 2024 - Technology

ByteDance’s web of apps could get tangled up in TikTok ban

Illustration of a glowing phone and various app icons in the ByteDance logo colors all trapped and tangled in a spider web.

Illustration: Aïda Amer/Axios

As a TikTok divestment law races to passage, TikTok's parent company ByteDance must reckon with the legislation across all of its apps, many of which are growing rapidly in the U.S.

Why it matters: The broad language included in the bipartisan TikTok ban bill could make it impossible for most ByteDance apps to operate in the U.S. unless the Chinese firm sells them to U.S. companies.

Zoom in: The bill only directly names ByteDance and TikTok, but its reach is much broader.

  • It restricts any app that is "operated, directly or indirectly (including through a parent company, subsidiary, or affiliate)," owned or controlled by a company based within the borders of a foreign adversary.
  • Therefore, a sale would be required for any app controlled by a foreign adversary, including China, per the text from the current version of the bill being considered by the Senate.

Driving the news: ByteDance offers an array of apps in U.S. app stores in addition to TikTok, including its popular video editing app CapCut and photo editing app Hypic.

  • ByteDance also provides several other apps in U.S. app stores via umbrella developer companies. These include AI homework app Gauth and a Pinterest-like social network called Lemon8,
  • SoundOn, under TikTok, allows artists to distribute music on the app and streaming services while maintaining ownership and receiving royalties.

Zoom out: ByteDance has introduced products across several industries, including e-commerce and AI, aimed at consumer and business users alike.

  • Its productivity suite, Lark, is akin to Microsoft Office or Google Workspace. BytePlus offers cloud, SMS and software services.
  • On the entertainment front, 8th Note Press is ByteDance's venture into publishing, and the company launched a team to create an English-language mini-series.
  • ByteDance also has an array of products in markets outside the U.S., including the news aggregation app Toutiao, the Chinese video-sharing platform Xigua Video and Douyin, China's version of TikTok.

Zoom in: It's unclear how lawmakers plan to address other apps offered in U.S. app stores with owners based in foreign adversaries of the U.S. as defined in the bill.

  • More than one quarter (26) of the 100 most downloaded apps in the U.S. so far this year are owned by foreign companies, according to data from Apptopia.
  • The bill's sponsors in the House have been adamant that the law is meant to target any "applications and websites controlled by a foreign adversary— China, Russia, Iran, North Korea —that pose a clear national security threat," and not just TikTok.
  • Keeping the law broad could strengthen the U.S. government's case in a likely challenge of its constitutionality. If the law is seen as specifically targeting ByteDance, the company could have grounds for appeal under the Constitution's ban on bills of attainder.
  • TikTok also argues that the bill infringes on its customers' First Amendment rights. Supporters of the bill maintain that it's about protecting national security.

Yes, but: The bill specifies that it doesn't apply to apps that primarily provide product reviews and retail sales, Congressional aides told reporters on a press call in March. That would exempt popular Chinese-owned apps like Shein and Temu.

  • TikTok did not respond to Axios' requests for comment.

What to watch: The Senate is expected to pass its version of the bill this week, and President Biden has indicated he would sign the measure, setting ByteDance up for an intense legal fight to keep TikTok and other apps in U.S. app stores.

Go deeper: The TikTok sales pitch

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