What happens next for TikTok now that Biden has signed divest-or-ban law?

The first step will be for TikTok to challenge the new law in court on First Amendment grounds, as it has promised to do. As for how that’s likely to play out, I’d recommend reading this Platformer piece on the subject, but if you’re short on time, here’s the gist:

The government does stand a chance of winning if it argues that a ban is justified by the national security threat that TikTok poses, but it’s on much shakier ground if the argument boils down to blocking propaganda (which the Supreme Court has previously decided has constitutional protections) or defending Americans’ data privacy (which Beijing can violate by buying their personal information from data brokers, like everyone else does).

Of course, the bill’s backers have generally insisted they want to force TikTok parent ByteDance to sell the social network to Americans, rather than having to ban it in the U.S. As my colleague Dylan Sloan has detailed here, there are plenty of suitors lined up to make the purchase, from former Treasury Secretary Steve Mnuchin to former Activision CEO Bobby Kotick. But even a forced divestment could be seen as falling foul of the First Amendment, if the courts agree with TikTok that speech is at the core of the case.

Legal outcomes aside, there’s an enormous question that remains unanswered: Could ByteDance even agree to sell TikTok?

The Chinese government has been consistent in saying that it opposes the forced sale and that it gets the final word on the matter because it would have to approve the export of controlled technology—specifically, TikTok’s content-recommendation algorithm. Beijing said so in 2020 when former President Donald Trump was trying to make that sale happen. It said so again last year when the Biden administration was floating the idea. And again last month, after the House passed the current bill.

So if Mnuchin, Kotick, or whoever does manage to get their hands on the hottest social network of our times, it would likely come without the secret sauce that makes TikTok so popular. For TikTok’s users—around the world, not just in the U.S.—there’s now a lot riding on the success of the company’s challenge to the new law. (Technically, the law gives ByteDance up to a year to agree and complete a sale, but the legal process could of course drag things out.)

Please let me know what you think will happen.

Separately, Tesla’s quarterly results yesterday were certainly remarkable. Vehicle deliveries down 8.5%, revenues down 9%, profits down 55%, investor relations chief Martin Viecha announces his departure at the end of the earnings call … and Tesla’s share price jumps by 13%.

This is seemingly down to the company’s announcement that it would launch new models ahead of the previously stated time frame of the second half of 2025, and that the roster would include “more affordable models,” which will be made on Tesla’s existing production lines. Does this mean the fabled $25,000 Model 2, recently rumored to be on the back burner, is instead coming soon? CEO Elon Musk wouldn’t be drawn on that one, but apparently the hint—from someone whose temporal predictions are notoriously unreliable—was enough to slide Tesla’s plummeting share price into reverse. Perhaps investors were also calmed by the poly-CEO’s insistence that Tesla “constitutes the majority” of his work time.

More news below.

David Meyer

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NEWSWORTHY

FTC bans noncompetes. In a move that will affect many U.S. tech firms, the Federal Trade Commission has banned most noncompete agreements, meaning a lot more workers will be free to join or become their employers’ competitors. The ban takes effect in August. NPR reports that there’s a significant carveout for existing agreements relating to companies’ senior executives, due to the likelihood of these having been negotiated. The U.S. Chamber of Commerce says it will sue the FTC over the ban.

Fisker sinks further. The electric vehicle maker Fisker says it expects to have to seek bankruptcy protection within a month if it can’t raise cash. As TechCrunch reports, Fisker is already planning more job cuts after a previous round claimed 15% of its headcount less than two months ago. It’s also now lost two board members in a month.

Amazon antitrust fine. Amazon’s habit of automatically selecting the “Subscribe & Save” option that gives shoppers repeated deliveries of an item, rather than making it a one-off purchase, constitutes an unfair commercial practice according to the Italian antitrust authority. Per Reuters, the watchdog just fined the company €10 million ($10.7 million) for limiting consumers’ freedom of choice.

SIGNIFICANT FIGURES

400,000-450,000

—The number of Vision Pro headsets that Apple will ship this year, according to supply-chain analyst Ming-Chi Kuo, who says the market had expected 700,000 to 800,000 units or more. “Apple cut orders before launching Vision Pro in non-U.S. markets, which means that demand in the U.S. market has fallen sharply beyond expectations,” Kuo wrote.

IN CASE YOU MISSED IT

Apple has its worst China quarter since 2020 as Huawei’s resurgence eats into its market share, says new research, by Lionel Lim

Apple may strike a historic deal with FIFA—and give a major boost to its streaming service, by Marco Quiroz-Gutierrez

Apple supplier Jabil benches its CEO as it investigates his conduct—but he’ll still collect his full $1 million salary, by Amanda Gerut

Why looking at financial metrics for early stage VC firms isn’t as revealing as you might expect, by Allie Garfinkle

Mark Zuckerberg got $24.4 million in ‘other compensation’ in 2023—but Meta also treated staff well, with the median employee making $379,000, by Orianna Rosa Royle

BEFORE YOU GO

Oracle’s new world HQ. Oracle moved its headquarters from Silicon Valley to Austin, several years ago. Now it’s planning to set up its “world headquarters” in Nashville because of its importance in the health care industry—a huge focus for Oracle these days. “It’s the center of our future,” said chairman Larry Ellison. As Bloomberg reports, the new campus is being designed by Norman Foster, the architect behind Apple Park (and, for those outside the tech world, other notable constructions such as London’s City Hall and the dome on Berlin’s revamped Reichstag).