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TikTok will be banned from government devices under the bipartisan spending bill passed by both houses of Congress on Friday, underscoring growing concerns over China’s popular video-sharing app ByteDance.
The law, which has yet to be signed into law by President Joe Biden, also requires e-commerce platforms to conduct more checks to prevent counterfeit goods being sold online and forces companies seeking large mergers to pay more, to submit them to the federal antitrust authorities.
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Congress failed to pass many of the most aggressive bills targeting technology, including antitrust laws that would require app stores developed by Apple and Google to give developers more payment options, and a measure that prescribes new guard rails to protect children on the Internet. And while Congress has made more headway this year than in the past toward a compromise bill on national privacy standards, what remains is a patchwork of state laws governing how consumer data is protected.
The center-left group of the technology industry Chamber of Progress hailed the banning of several antitrust laws that have targeted their supporters, including Apple, Amazon, Google and Meta.
“What you don’t see on this year’s omnibus are the more controversial measures that have raised red flags on issues like content moderation,” Chamber of Progress CEO Adam Kovacevich said in a statement following the release of the package text earlier this week. The group previously raised concerns about a prominent antitrust measure, the American Innovation and Choice Online Act.
Another industry group, NetChoice, also applauded Congress for “refusing to include in this omnibus radical and unexamined progressive proposals to overhaul America’s antitrust laws.”
But the bills that lawmakers passed in the spending package will also shape the tech industry in other ways.
TikTok ban on government devices
Banning TikTok on government devices could hurt competing platforms such as snap and Meta’s Facebook and Instagram, which are also competing for the attention of young consumers. The bill includes an exception for law enforcement, national security and research purposes.
Lawmakers on both sides of the aisle, along with Christopher Wray, director of the Federal Bureau of Investigation, have expressed concern that TikTok’s ownership structure could leave US user data vulnerable, as China-based companies may be required by law to disclose user information. TikTok has repeatedly said that its US user data is not stored in China, although those assurances have done little to allay concerns.
The company has been working towards a settlement with the US government to allay national security fears by the US Foreign Investment Committee
“We are disappointed that Congress has moved to ban TikTok on government devices — a political gesture that will do nothing to advance national security interests — rather than encourage the government to complete its national security review,” said a TikTok spokesman in a subsequent statement the release of the package text. “The agreement, under review by CFIUS, will meaningfully address all security concerns that have been raised at both the federal and state levels. These plans were developed under the oversight of our nation’s top national security authorities – plans that we are in full swing to implement – to further secure our platform in the United States, and we will continue to inform lawmakers about them.”
Prevention of fake online sales
The spending package also includes the INFORM Consumer Law, which aims to prevent counterfeit, stolen or harmful products from being sold online. The bill will require online marketplaces like Amazon to promptly collect information like bank and contact details from “all high-volume third-party sellers” and verify that data.
Although Amazon initially opposed the law last year, writing that it was “driven by some big retailers” and claiming it would penalize small businesses that sell online, the company eventually backed a version of the bill and said it was important having it is more of a federal standard than a patchwork of state laws. Etsy and ebay had previously supported the bill.
“Passing the bipartisan INFORM law would be a major victory for consumers, who deserve to know who they are buying from when visiting an online marketplace,” Kovacevich said in a statement. “This legislation has endured years of hearing and price premiums and deserves the support of both parties, as well as brick-and-mortar stores and online marketplaces.”
Jeffrey Zubricki, Etsy’s Head of Americas Advocacy and Public Policy, said in a statement that the bill will “achieve our collective goal of protecting consumers from bad actors while avoiding overly broad disclosure requirements that compromise the privacy of our sellers and would prevent them from conducting their creative businesses.”
Higher fees for large mergers
While more ambitious antitrust measures targeting digital platforms failed to make it into legislation by the end of the year, there is a bill designed to help raise money for antitrust authorities examining mergers. The Merger Filing Fee Modernization Act will increase the cost companies pursuing large mergers will have to pay to file with antitrust authorities as required by law. The bill also cuts costs for smaller stores and allows fees to be adjusted annually based on the consumer price index.
The measure is designed to help fund the Federal Trade Commission and the Justice Department’s Antitrust Division, which have seen a surge in merger proposals in recent years without adequate budget increases.
Although this fell short of antitrust advocates’ hopes, the inclusion of the merger filing fee was nonetheless commended.
“This is an important milestone for the anti-monopoly movement,” said Sarah Miller, executive director of the anti-monopoly group American Economic Liberties Project, which is supported in part by the Omidyar Network. Miller said the bill would “significantly strengthen antitrust laws for the first time since 1976.”
“Big Tech, Big Ag and Big Pharma spent prodigious amounts of money in an unprecedented effort to block Congress from passing antitrust reform and undermine the ability of state and federal enforcers to uphold the law — and they lost,” Miller added .
Sen. Amy Klobuchar, D-Minn., who sponsored the bill, said in a statement earlier this week that its inclusion “is an important step in restructuring merger fees after decades of the status quo so that we can provide our antitrust regulators with the resources.” can ask, they have to do their job.”
“This is clearly the beginning of this fight and not the end,” she said. “I will continue to work to protect consumers and increase competition.”
Strengthening of state corporations in antitrust proceedings
Another antitrust law included in the package was a version of the State Antitrust Enforcement Venue Act. The bill gives state AGs in antitrust cases the same authority as federal enforcers to choose the county in which to bring their cases and prevent them from being consolidated in another county.
Under the legislation, companies defending against antitrust claims cannot choose a location that they believe is more convenient to fight the case.
That’s what happened in an antitrust case against Google brought by a group of state-owned corporations who accused the company of illegally monopolizing the digital advertising market. The company moved the case from Texas to New York to hear the pre-trial alongside private antitrust complaints against the company.
Last year, attorneys general from 52 states and territories wrote to Congress to support the legislation.
Transparency on ransomware attacks
The bipartisan RANSOMWARE Act also made it into the spending bill, requiring the FTC to report to Congress on the number and types of foreign ransomware or other cyberattack complaints it receives.
The FTC is also required to report to Congress numerical trends it sees in these complaints, including those originating from individuals, companies, or governments of foreign adversaries such as China, North Korea, Iran, and Russia. And it needs to share information about its litigation related to those cases and their outcomes.
The FTC can also provide recommendations for new legislation to strengthen resilience to these attacks, as well as best practices for organizations to protect.
Researching the impact of technology on children
A version of the Children and Media Research Advancement (CAMRA) Act is included in the package directing the Department of Health and Human Services to undertake or support research into the impact of media and technology on infants, children and young people.
According to legislation, these impacts could include cognitive, mental and physical health impacts from technologies such as social media, artificial intelligence, video games or virtual reality. The director of the National Institutes of Health must submit a report on his work to Congress within two years of the law’s enactment.
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