President Joe Biden signed a bill aimed at forcing a change of ownership of popular video-sharing app TikTok into law on Wednesday after the US Senate approved it by a large margin.
The law threatens TikTok with being banned from US app stores if it is still owned by the Chinese-based ByteDance Group in a year's time. Tiktok intends to challenge the law in court.
The Senate approved the bill late Tuesday with 79 votes in the 100-seat upper chamber.
In the United States, ByteDance is seen across party lines as a Chinese company that must bow to the will of the Chinese Communist Party. There are therefore warnings that Chinese authorities could gain large-scale access to US users' data - and also use the platform to exert political influence. TikTok has denied this for years.
It is unclear whether the law will stand up in US courts. An earlier threat of a ban failed in court, and a similar law in the state of Montana was recently put on hold due to possible violations of the freedom of speech enshrined in the US constitution.
TikTok claims to have 170 million users in the US. Company boss Shou Zi Chew called the law unconstitutional in a video and announced that TikTok would take legal action.
TikTok emphasises that it does not see itself as a subsidiary of a Chinese company. ByteDance is 60% owned by Western investors. The company is based in the Cayman Islands in the Caribbean.
However, US politicians countered that the Chinese founders held control thanks to higher voting rights with a 20% share and that ByteDance's headquarters are in Beijing, where it is impossible to escape the influence of the authorities.
When asked about the vote, China's Foreign Ministry referred to earlier statements. Beijing had accused the United States of wanting to hinder competitive companies in other countries under the pretext of national security.
China's government has never asked companies to illegally collect or provide data for them and will not do so, spokesman Wang Wenbin said in mid-March.
The law puts Biden's Democrats in a quandary: On the one hand, the president wants to take a tough stance on China, and on the other, the app is popular with young users, whose votes he needs to win re-election in November. Biden's campaign team only opened a TikTok account itself this year.
During his time in office as US president, Donald Trump tried to enforce the sale of TikTok's US business to US investors by decree. However, the plan failed mainly because US courts saw the plans as a violation of freedom of speech and an overstepping of the president's powers.
As a law passed by Congress, the current initiative has a more solid legal basis.
Trump, a Republican who wants to be re-elected in November, has since backed away from the ban demands.
The measure was passed as part of a broader bill also including a Ukraine weapons aid package.
TikTok is also coming under pressure in Europe. The company announced on Wednesday that it is voluntarily suspending the rewards scheme for its new TikTok Lite app, amid a legal investigation by the European Commission.
The commission said on Monday that it could order TikTok to suspend the rewards feature unless the company demonstrated - within 48 hours - that it poses no risk of serious harm.
The commission also said the company had to show it had complied with risk assessment and mitigation rules for large platforms under the European Union's Digital Services Act (DSA).
On Wednesday, TikTok posted on X: "TikTok always seeks to engage constructively with the EU Commission and other regulators. We are therefore voluntarily suspending the rewards functions in TikTok Lite while we address the concerns that they have raised."
The EU probe concerns the way TikTok Lite lets users collect points by watching videos and exchange them for things of value, such as Amazon vouchers.
The commission said on Monday that it was concerned the scheme "has been launched without prior diligent assessment of the risks it entails, in particular those related to the addictive effect."