Last week, our blog discussed the implications of a recent bill that has gained strong momentum in the United States around the popular social media app TikTok. That bill, which forces the China-based firm ByteDance to sell ownership of TikTok or face a ban, was passed by the U.S. House of Representatives on March 13.
Now, the bill makes its way to the Senate, and observers across the political aisle have noted the speed of its progress. We’ll explore why this speed is important for business owners to take note of later in this post.
The Protecting Americans from Foreign Adversary Controlled Applications Act can be functionally summarized by the following quote taken online from the U.S. Congress.
Under the bill, a foreign adversary-controlled application is directly or indirectly operated by (1) ByteDance, Ltd. or TikTok (including subsidiaries or successors that a foreign adversary controls); or (2) a social media company that is controlled by a foreign adversary and has been determined by the President to present a significant threat to national security.
The most commonly given justification behind this bill is national security concerns, more specifically, that Chinese law compels firms to respond to the needs of the Communist Party of China. The rationale behind this bill is critical, as it again highlights that non-market factors are at play in this decision.
Perhaps most importantly, the non-market forces in this instance are stemming from abroad. Here, the U.S. government is not the driver but reacting to potentially hostile entities that have already set these objectives forward.
This case shows the importance of considering non-market factors both domestically and abroad. Still, the task has become challenging, given the complicated and dynamic nature of our world today.
Strong due diligence practices, research, and environmental awareness are critical to long-term business success in our current age.
If you are wondering where to start or want to have years of research experience at your disposal, contact the Daisy Consulting Group for a free consultation.
