Understanding the TikTok Ban: Unraveling the RESTRICT Act and Its Implications for Marketing

What is the RESTRICT Act?

The official designation of the bill is S.686 - Restricting the Emergence of Security Threats that Risk Information and Communications Technology Act or the RESTRICT Act.

The Restrict act is a bill introduced in the U.S. Senate on March 7, 2023 by a bipartisan group of senators led by Mark R. Warner and John Thune [1,2]. The bill aims to address the ongoing threat posed by technology from foreign adversaries by empowering the Department of Commerce to review, prevent, and mitigate information and communications technology transactions that pose undue risk to national security [1,2]. The bill would also establish civil and criminal penalties for violating any regulations or orders issued under it [3,4].

1. congress.gov2. warner.senate.gov3. natlawreview.com4. jdsupra.com

What are some of the concerns of the bill?

• The bill grants broad authority to the secretary of commerce to take any action necessary to identify and mitigate foreign ICT threats, which could raise issues of due process, transparency, and oversight [1,2,3].

• The bill imposes civil and criminal penalties for violating or circumventing any regulations or orders issued under it, which could create a chilling effect on legitimate ICT transactions or innovation [1,2,3].

• The bill does not define what constitutes an undue or unacceptable risk to national security, which could create uncertainty and inconsistency in the application of the bill [1,2,3].

1. natlawreview.com2. jdsupra.com3. eyeonenforcement.com

• The bill could violate the free speech and privacy rights of ICT users and providers, by giving the government excessive power to censor, monitor, or interfere with their ICT transactions without sufficient oversight, transparency, or due process [1,2].

• The bill could harm the innovation and competitiveness of the ICT sector, by creating uncertainty and inconsistency in the ICT market and stifling legitimate ICT transactions or collaborations that could benefit the US economy and society [1,2].

• The bill could escalate the tensions and conflicts with foreign adversaries, by provoking retaliation or countermeasures that could undermine the US interests and values in the global arena [1,2].

1. reuters.com2. usnews.com3. wired.com

The penalties under the bill are:

• Civil violations can result in fines up to $250,000 or twice the amount of the transaction that is the basis of the violation, whichever is greater [1].

• Criminal penalties can result in fines up to $1 million and/or imprisonment up to 20 years [1].

• These penalties apply to both direct violations and inchoate offenses such as attempt and conspiracy [1].

  1. jdsupra.com2. congress.gov3. justice.gov

What are some of the things an american company or individual could do that would result in a penalty?

Some of the things an American company or individual could do that would result in a penalty under the bill are:

• Engaging in a transaction involving an ICT product or service that is owned or controlled by a foreign adversary and poses an undue or unacceptable risk to US national security or the safety of US persons, without obtaining prior approval or a license from the Department of Commerce [1].

• Violating or circumventing any regulation, order, license, or other action issued by the Department of Commerce under the bill [1].

• Providing false or misleading information to the Department of Commerce or any other federal agency in connection with any review, investigation, or mitigation under the bill [1].

• Giving advance notice of any inspection or audit conducted by the Department of Commerce under the bill, without authority from the Secretary of Commerce or their designees [1].

• Retaliating against any person who reports or cooperates with any review, investigation, or mitigation under the bill [2].

1. jdsupra.com2. congress.gov3. bis.doc.gov4. eeoc.gov5. osha.gov

What are some of the assumptions of the bill that are incorrect?

Some of the assumptions of the bill that are incorrect or questionable are:

• The bill assumes that all technologies from the six designated foreign adversaries (China, Russia, Iran, North Korea, Cuba, and Venezuela) pose a credible threat to US national security, without providing clear criteria or evidence for such designation [1,2].

• The bill assumes that the secretary of commerce and the intelligence community have the expertise and capacity to review and mitigate all foreign ICT threats, without sufficient oversight, transparency, or due process for the affected parties [1,2,3].

• The bill assumes that banning or restricting foreign technologies would effectively protect US national security, without considering the potential economic, social, or diplomatic costs or consequences of such actions [1,2,4].

1. reclaimthenet.org2. theguardian.com3. contextualscience.org4. datainnovation.org

How do American Social media companies benefit from this bill?

Some of the benefits of this bill for American social media companies are:

• The bill could create a level playing field for American social media companies that compete with foreign ICT products or services that are owned or controlled by foreign adversaries or pose national security risks, by restricting or banning such products or services from the US market [1,2].

• The bill could enhance the security and privacy of American social media companies and their users, by preventing foreign ICT products or services from collecting, storing, processing, or sharing sensitive data that could harm US national security or the safety of US persons [1,2].

• The bill could foster the innovation and competitiveness of American social media companies, by encouraging them to develop and offer ICT products or services that meet the national security standards under the bill and address the needs and preferences of their users [1,2].

• The bill could boost the trust and confidence of American social media companies and their users, by providing more oversight, transparency, and due process for ICT transactions that involve foreign ICT products or services, and by ensuring that such transactions are based on objective and evidence-based criteria [1,2,3]

1. wired.com2. hbr.org3. nysstlc.syr.edu4. vox.com5. forbes.com

How significant is this bill to marketing and communications?

The significance of the bill to marketing and communications could be high, depending on the scope and impact of the bill’s implementation. The bill could affect various aspects of marketing and communications, such as:

• The availability and accessibility of ICT products and services that are used for marketing and communications purposes, such as social media platforms, apps, software, hardware, or cloud services [1,2].

• The security and privacy of ICT products and services that are used for marketing and communications purposes, such as data collection, storage, processing, or sharing [1,2].

• The compliance and liability of ICT users and providers that are involved in marketing and communications activities, such as marketers, advertisers, publishers, influencers, or consumers [1,2].

• The innovation and competition of ICT products and services that are used for marketing and communications purposes, such as new features, functionalities, or business models [1,2].

• The trust and confidence of ICT users and providers that are involved in marketing and communications activities, such as brand reputation, customer loyalty, or stakeholder engagement [1,2].

1. jdsupra.com2. thune.senate.gov3. warner.senate.gov4. commerce.gov