White House endorses Senate TikTok bill, urges Congress to pass soon

The White House threw its support behind a new bipartisan Senate bill on Tuesday that would give the Biden administration the power to ban TikTok in the U.S.

The legislation would empower the Commerce Department to review deals, software updates or data transfers by information and communications technology in which a foreign adversary has an interest. TikTok, which has become a viral sensation in the U.S. by allowing kids to create and share short videos, is owned by Chinese internet giant ByteDance.

Under the new proposal, if the Commerce secretary determines that a transaction poses “undue or unacceptable risk” to U.S. national security, it can be referred to the president for action, up to and including forced divestment.

The bill was dubbed the RESTRICT Act, which stands for Restricting the Emergence of Security Threats that Risk Information and Communications Technology.

Sen. Mark Warner, D-Va., who chairs the Senate Intelligence Committee, formally unveiled the legislation on Capitol Hill alongside a bipartisan group of Senate co-sponsors. The White House issued a statement publicly endorsing the bill while Warner was briefing reporters.

“This bill presents a systematic framework for addressing technology-based threats to the security and safety of Americans,” White House national security adviser Jake Sullivan said in a statement, adding that it would give the government new tools to mitigate national security risks in the tech sector.

Sullivan urged Congress “to act quickly to send the bill to the President’s desk.”

“Critically, it would strengthen our ability to address discrete risks posed by individual transactions, and systemic risks posed by certain classes of transactions involving countries of concern in sensitive technology sectors,” said Sullivan.

A TikTok spokeswoman did not respond Tuesday to CNBC’s request for comment.

Sullivan’s statement marks the first time a TikTok bill in Congress has received the explicit backing of the Biden administration, and it catapulted Warner’s bill to the top of a growing list of congressional proposals to ban TikTok.

As of Tuesday, Warner’s legislation did not yet have a companion version in the House. But Warner told CNBC he already had “lots of interest” from both Democrats and Republicans in the lower chamber.

Warner declined to say who he and Republican co-sponsor Sen. John Thune, R-S.D., might look to for support in the House, but added, “I’m very happy with the amount of interest we’ve gotten from some of our House colleagues.”

Earlier this month, the House Foreign Affairs Committee passed a bill that, if it became law, would compel the president to impose sanctions on Chinese companies that could potentially expose Americans’ private data to a foreign adversary.

But unlike Warner’s bill, the House legislation, known as the DATA Act, has no Democratic co-sponsors, and it advanced out of committee along party lines, complicating its prospects in the Democratic-majority Senate.

Senators introducing the bill on Tuesday emphasized that unlike some other proposals, their legislation does not single out individual companies. Instead, it aims to create a new framework and a legal process for identifying and mitigating specific threats.

“The RESTRICT Act is more than about TikTok,” Warner told reporters “It will give us that comprehensive approach.”

The new Senate bill defines foreign adversaries as the governments of six countries: China, Russia, Iran, North Korea, Venezuela and Cuba. It also says it will apply to information and communication technology services with at least 1 million U.S.-based annual active users or that have sold at least 1 million units to U.S. customers in the past year.

That could reach far beyond TikTok, which in 2020 said it had 100 million monthly active users in the U.S.

The company has been under review by the Committee on Foreign Relations in the U.S. stemming from ByteDance’s 2017 acquisition of Musical.ly, which was a precursor to the popular video-sharing app.

But that process has stalled, leaving lawmakers and administration officials impatient to deal with what they see as a critical national security risk. TikTok has maintained that approval of a new risk mitigation strategy by CFIUS is the best path forward.

“The Biden Administration does not need additional authority from Congress to address national security concerns about TikTok: it can approve the deal negotiated with CFIUS over two years that it has spent the last six months reviewing,” TikTok spokesperson Brooke Oberwetter said in a statement before the bill text was released.

“A U.S. ban on TikTok is a ban on the export of American culture and values to the billion-plus people who use our service worldwide,” the company said. “We hope that Congress will explore solutions to their national security concerns that won’t have the effect of censoring the voices of millions of Americans.”

TikTok’s interim security officer Will Farrell described in a speech on Monday the layered approach the company plans to take to mitigate the risk that the Chinese government could interfere with its operations in the U.S.

The so-called Project Texas would involve Oracle hosting its data in the cloud with strict procedures over how that information can be accessed and even sending vetted code directly to the mobile app stores where users find the service.

Farrell said TikTok’s commitments would result in an “unprecedented amount of transparency” for such a technology company.

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