US House committee set to vote on TikTok crackdown bill

Credit: REUTERS/Dado Ruvic

(Adds questions about impact on Tencent, new comments, classified briefing taking place)

By David Shepardson

WASHINGTON, March 7 (Reuters) - The U.S. House Energy and Commerce committee on Thursday is set to vote on legislation giving China's ByteDance six months to divest from short video app TikTok or face a U.S. ban.

Lawmakers hope to move quickly on the measure and said the U.S. House of Representatives could take up the bill in the coming weeks, a move that represents the first significant momentum for a U.S. crackdown on TikTok, which about 170 million U.S. users.

Before the vote, lawmakers were getting a closed-door classified briefing on national security concerns about TikTok's Chinese ownership.

Representative Mike Gallagher, the Republican chairman of the House select China committee, and Representative Raja Krishnamoorthi, the panel's top Democrat, on Tuesday introduced legislation to address national security concerns posed by Chinese ownership of the app. "TikTok could live on and people could do whatever they want on it provided there is that separation," Gallagher said, urging U.S. ByteDance investors to support a sale. "It is not a ban - think of this as a surgery designed to remove the tumor and thereby save the patient in the process."

TikTok users were flooding Capitol Hill with phone calls urging lawmakers not to back the measure, congressional aide said.

Asked if the bill could impact the U.S. operations of Tencent's WeChat, which then President Donald Trump sought to ban in 2020, Gallagher said he would not speculate but said "going forward we can debate what companies fall" under the bill.

The bill would give ByteDance 165 days to divest TikTok; if it did not, app stores operated by Apple , Google and others could not legally offer TikTok or provide web hosting services to ByteDance-controlled applications.

"This bill is an outright ban of TikTok, no matter how much the authors try to disguise it," a company spokesperson said. "This legislation will trample the First Amendment rights of 170 million Americans and deprive 5 million small businesses of a platform."

White House press secretary Karine Jean-Pierre on Wednesday praised the proposal, saying the administration wants "to see this bill get done so it can get to the president's desk."

The app is popular and getting legislation approved in an election year may be difficult. Last month, Democratic President Joe Biden's re-election campaign joined TikTok.

Democratic Senator Mark Warner, who proposed a separate bill last year to give the White House new powers over TikTok, said he had "some concerns about the constitutionality of an approach that names specific companies" but will take "a close look at this bill.”

A U.S. judge in late November blocked Montana's first-of-its kind state ban on TikTok, saying it violated the free speech rights of users.

The U.S. Treasury-led Committee on Foreign Investment in the United States (CFIUS) in March 2023 demanded that TikTok's Chinese owners sell their shares or face the possibility of the app being banned, Reuters reported, but the administration has taken no action.

TikTok says it has not and would not share U.S. user data with the Chinese government.

The new bill is aimed at bolstering the legal authority to address TikTok. Biden's predecessor, Republican Donald Trump, tried to ban TikTok in 2020 but was blocked by U.S. courts. (Reporting by David Shepardson. Editing by Gerry Doyle) ((David.Shepardson@thomsonreuters.com; 2028988324;)) Keywords: USA TIKTOK/CONGRESS (UPDATE 1)

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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