Welcome to The Fineprint, where a team of underpaid nerds trawl through reams of boring legal documents on your behalf and then report back with the golden nuggets that’ll keep you informed and ahead of the curve.

True or false… it is illegal to shoot from a vehicle in California unless at a whale.
_{You can find the answer at the end!}

Coming up in today’s print:

• Billions of dollars are at stake for global businesses as the U.S. attempts to take ownership of TikTok.

• The EU inches closer to enforcing their controversial AI Act.

• Volkswagen teaches us why lying is an expensive business to be in.

But first…

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SOCIAL MEDIA

The Threat And Opportunity Posed By The TikTok Ban

TLDR - The US government got one step closer on Wednesday with their plan to either:

• Seize ownership of TikTok, or, failing that;

• Prevent Americans from accessing it. 

Why we’re paying attention - millions of businesses and creators rely on TikTok to make a living and reach customers. The outcome of the TikTok ban poses both a huge financial threat and a huge financial opportunity. 

Let’s scroll through the biggest need-to-knows…

WAIT, WHAT’S HAPPENING? THE US IS BANNING TIKTOK? 

Not quite. 

The TikTok ban is an ultimatum that may result in a ban. 

There is growing concern among some US politicians over the security threats posed by the Chinese-owned app. 

In response, they are trying to pass a law that gives ByteDance (TikTok’s parent company) two options: 

A) sell TikTok to America; or

B) be removed from American app stores. 

If the bill is signed into law, ByteDance would be given 165 days to choose door A or door B. 

Should ByteDance then refuse to walk through door A, then, yes—TikTok would become persona non grata. Banned. 

SO, WILL THE LAW GET PASSED?

Maybe. 

For a bill to get passed into law it must be approved by the house, the senate, and the president—in that order.

The house was fast and furious in their approval, sailing through with a vote of 352-65.

So now it’s up to the Senate to reach a decision on the bill but they’re taking a slower and more cautious stance. Senator Ron Wyden from Oregon, for instance, said the following: “These fields are evolving and changing so rapidly, that you can do a lot of damage by moving too quickly or without the facts.”

This trepidation could endanger the bill’s survival, however. 

That’s because TikTok has already been deploying its most formidable weapon: Gen Z influencers.

TikTok has been busy whipping its young scrollers into a frenzy that had them blowing up politician’s phones with requests to stop the ban. 

So the longer that the Senate delays, the more lobbying pressure TikTok can exert. 

President Biden, who will be relying on young voters in the November 2024 election, is surprisingly supportive, saying: “if they pass it, I’ll sign it.” 

Donald Trump (who tried and failed to ban TikTok in 2020) has done an even more surprising U-turn, voicing concerns over the bill, due to the possibility of TikTok falling into the hands of Mark Zuckerberg’s Meta. Trump’s stance is likely a political play as the odds of Meta acquiring TikTok are extremely low given how anti-monopolistic regulators have become. 

WHO COULD BECOME THE NEW OWNER OF TIKTOK?

Let’s say that the law does get passed and ByteDance does agree to sell — who would ultimately take ownership of TikTok? 

There’s been plenty of speculation over potential candidates:

• Major tech companies such as Meta, Microsoft, X, and Apple have been floated. But given all of the antitrust sentiment in the air, as we saw with last week’s DMA drama, we see these options as extremely unlikely. 

• Steve Mnuchin—investment banker, film producer, and Trump’s former secretary of the treasury—threw his hat into the ring this week, confirming that he was putting together an investor group to buy the app.

• Oracle, the cloud computing company who currently hosts TikTok’s massive video library, has been deemed an appropriate contender by many.

Whoever they are, they need a lot of cash on hand, as TikTok is currently valued at $268 billion. 

BUT IS THERE ACTUALLY A THREAT FROM CHINA?

There is no smoking gun, but the gun is most definitely loaded. 

While evidence of mass scale manipulation or misuse via TikTok is thin, the US is concerned that China could someday use it as a weapon should they choose to do so. 

Some notable red flags have already arisen: 

🚩 TikTok has previously confirmed that their employees spied on journalists. The IP addresses and user data of reporters were breached in order to check up on whether they were meeting with TikTok employees. 

🚩TikTok has also confirmed they engage in “keylogging,” whereby the company stores everything we type within the app. This means that any email addresses, passwords, etc that users type within TikTok’s in-app internet browser could be accessible to China. 

🚩Internal documents obtained by Forbes showed that tax forms, social security numbers, and user data are all also being stored in China.

The US is keen to take these risks off the table. 

WHAT’S AT STAKE FOR US? 

😈 The threat — in the event that TikTok disappeared overnight, creators and businesses would lose access to: 

• All of the followers they’ve acquired and their existing published content. 

• TikTok’s lucrative ad network which businesses are collectively pumping billions of dollars into.

• TikTok’s powerful TikTok shop functionality whereby businesses and creators can seamlessly sell products to its millions of users. 

All of this could of course lead to billions of dollars of revenue loss for those currently doing business on the app.  

😇 The opportunity — in the event of TikTok being removed from US app stores, a huge amount of traffic will be diverted to other platforms such as YouTube and Instagram Reels. Creators and businesses alike can take advantage of this new wave of supply by moving advertising and content creation efforts over to the platforms that capture TikTok’s traffic. 

Whatever happens, we’ll be keeping tabs on the situation and updating you on any major developments. 

SNIPPETS

The EU’s controversial “AI Act” got yet another step closer to becoming law on Wednesday, after the EU Parliament was the latest body to give the Act a thumbs up. Once the EU’s lawyers run the law through grammarly do some final checks, the Act will become law. From there, businesses must start complying with the rules or face a €35m fine or 7% of their annual revenue.

Volkswagen lost another lawsuit last week to the Securities and Exchange Commission (SEC). That’s because VW raised billions of dollars from investors in 2014/2015 but failed to mention that they were fudging their emissions statistics. The $48.75mn settlement adds to the $2bn they’ve already forked over due to the scandal—one of the most expensive lies in history.

TikTok got slapped with a $11 million fine by Italian regulators for failing to take down harmful content, particularly regarding harmful trends like the "French scar" challenge, which saw teens pinching their cheeks until a bruise formed.

The US Supreme Court said that government officials cannot block people on social media if they use their accounts to talk about stately matters. Their reasoning? #freespeech. 

Tesla lost a prolonged legal dispute with a black former factory worker who alleged severe racial harassment, and agreed to settle for $3.2m. This outcome doesn't bode well with their ongoing class action lawsuit representing 6,000 black workers at their Fremont plant. 

Apple cut a $490m cheque to investors who were misled regarding iPhone sales in China, settling a lawsuit led by Norfolk Pension Fund. Don’t Cook the books, Tim. 

The New York Times continued to pursue their copyright lawsuit against OpenAI last week after they published a 10 page response to OpenAI’s motion to dismiss. With neither side backing down, this legal battle gets ever closer to the courtroom. 

Uber and Lyft will stop operations in Minneapolis starting May 1 after the city's council ruled that rideshare drivers must be paid a minimum wage. Now, both companies are teaming up to push for new state laws to cancel out this rule. And given that Minneapolis only has 39 licensed taxi drivers, the rideshare companies have a lot of leverage. 

In contrast, Uber and Lyft are feeling optimistic in California after drivers dropped a lawsuit against the two companies. Drivers in the Golden State were suing for the ability to control how much they charge riders but abandoned the case after learning that drivers have to pursue their claims individually rather than as a collective.

MEME

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The answer to today’s “did you know” is…

True. Shooting at whales from your vehicle is perfectly legal in California. #justiceforwhales

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