Axios Pro Exclusive Content

Lawmakers punt on thorny TikTok sale issues

headshot
Mar 14, 2024
Illustration of hands fighting over the Tik Tok logo.

Illustration: Aïda Amer/Axios

Lawmakers say they've given little thought to just how TikTok would secure a new owner as they champion a bill that would force China-based ByteDance to sell the app or face a ban in the U.S.

Why it matters: If the Senate passes the bill and the president signs it, TikTok can continue operating in the U.S. with a new owner.

  • But the road to get there is a bumpy one that could brush up against an antitrust regime unfriendly to big acquisitions in the tech industry.
  • The bill's strict timeline adds further complexity.
  • Beyond competition concerns, the legislation implicates companies like Google and Apple that operate app stores distributing TikTok.

The big picture: "We think that neither Facebook nor Google would likely be able to buy TikTok because of antitrust concerns, since those companies already have big shares of the short-form video platform market," Matthew Stoller, director of research at the anti-monopoly group the American Economic Liberties Project, told Axios.

  • "Access to a unique store of data could be a concern, as could the significant buying power of cloud services that TikTok uses."

What they're saying: Rep. Raja Krishnamoorthi, one of the House bill sponsors, noted that "the regulators would have to approve anything."

  • "So, you know, I don't think that Meta is going to successfully be able to purchase this property. But there are any number of others, and so I expect that the usual regulatory process will unfold."
  • Sen. Richard Blumenthal, who serves on the Judiciary Committee panel overseeing antitrust, said a sale of TikTok was "perfectly feasible and doable."
  • Asked whether Big Tech companies were the only suitable buyers and if that raised concerns, he said: "That's a second question.… A couple of groups have indicated their interest with no connection to the Big Tech companies."

Review and challenges of mergers and acquisitions by the Justice Department and the FTC can also take a lot longer than the timeline laid out in the bill.

  • The legislation would require ByteDance to divest after 180 days of enactment, and legal challenges to the bill must be brought within 165 days.
  • Blumenthal said: "The House bill ought to be very carefully reviewed for details like the length of time required" for divestment.

The other side: "It's not the American people that are going to benefit from this, it will be Facebook. Their stock is going to go way up," said Rep. Thomas Massie, who voted against the TikTok bill.

  • He noted that it holds American companies like Apple and Google accountable for hosting TikTok on their app stores.
  • The timetable TikTok would have to sell in "shows a lack of due process," Sen. Rand Paul said. "You can't just take their company from them … because you don't like them based on an accusation."
  • Sen. Chuck Grassley said he hadn't heard of any antitrust concerns, but would be interested in looking into it more as a member of the Judiciary Committee.
  • Sen. Alex Padilla said antitrust "would certainly be a consideration" as the Senate considers the bill.

Flashback: There is some precedent for this particular situation, but at a smaller scale.

  • LGBTQ dating app Grindr divested from its Chinese owners in 2019 and was sold to a U.S.-based company after a CFIUS review.
  • Microsoft showed interest in buying TikTok in the past, but that fell through. It's not clear whether Oracle, TikTok's U.S. data partner, has the interest or means for a sale.

What we're watching: TikTok has made clear it's not interested in a sale, which is why it keeps calling the bill a ban.

  • Former Treasury Secretary Steven Mnuchin said Thursday he's interested in putting a group together to buy TikTok.
  • Bobby Kotik, former CEO of gaming giant Activision Blizzard, has also expressed interest, per reporting this week.
Go deeper