RESTRICT First, Ban Later

Since my first post on the RESTRICT Act two weeks ago, the bill has gotten a lot more attention and scrutiny than when it was first announced on March 7.

And deservedly so.

Its definition of what types of technologies may constitute national security threats is extremely expansive, its scope is loose and broad, and the amount of power it is conferring to the executive branch is reminiscent of the Patriot Act. It has many flaws and slippery slopes – making America look like it is out-China-ing China.

Nevertheless, the bill continues to pick up support in the Senate, already has the backing of the White House, and Kevin McCarthy, the Speaker of the House, also signaled support to “move forward” with passing a legislation. He did not mention the RESTRICT Act by name only because there is a competing proposal in his own chamber, the DATA Act.

At this point, what feels certain is that a hybrid of the RESTRICT Act and the DATA Act will become law at some point this year, paving the way to ban TikTok and much more. In fact, passing something like the RESTRICT Act is a necessary precondition for a ban to work and stick. The bill must pass first, then the ban comes later.

Here’s why.

Why “Emergency Economic Powers” Wasn’t Enough

When Trump first attempted to ban TikTok and WeChat in 2020, he invoked the International Emergency Economic Powers Act (IEEPA) to give him the power to do so. It was struck down by two judges, one of whom was actually a Trump appointee, so the decisions were not politically-motivated, even though Trump was never popular among judges.

It’s important to understand why the IEEPA was not the right source of legal power to ban apps on national security grounds, in order for all the events that came after – Biden administration opting to negotiate with TikTok, bipartisan proposal of the RESTRICT Act, the TikTok congressional hearing – to make sense.

The IEEPA was passed in 1977 to provide an updated framework for the President to use emergency powers to respond quickly to foreign threats, while still getting some checks and balances from Congress. Previously, Presidents relied on a much older law, the Trading with the Enemy Act of 1917, to exercise such emergency powers. After the IEEPA was passed, some of the examples where it was invoked were:

• Jimmy Carter froze Iranian assets during the Iran Hostage Crisis
• Ronald Reagan imposed economic sanctions on South Africa due to the apartheid
• George W. Bush blocked the assets of individuals and organizations associated with terrorism after 9/11
• Barack Obama imposed economic sanctions on individuals and entities who undermined Ukrainian sovereignty when Russia annexed Crimea

It is not hard to see that whatever national security threats TikTok and WeChat might have posed in mid-2020, they felt like “small potatoes” to what the IEEPA was designed to deal with. Of course, we’ve all learned more damaging revelations about TikTok’s poor track record of safeguarding American user data since. But even if the IEEPA were invoked today again to ban TikTok with new, more damning evidence, it will likely still run into problems with the courts for two reasons.

One, the IEEPA explicitly exempts "information and informational materials" from being part of its scope. Thus, TikTok, or any social media app, would fall outside of this law because it only contains content, data, and digital things of “informational” nature. (Then again, there was no Internet in 1977, so the IEEPA could not have foreseen such a category.) This was one of the primarily legal reasons why the Trump ban was struck down. Biden’s team would meet the same fate if they tried to invoke IEEPA for the same end, so they opted to negotiate with TikTok, rather than work through the legal appeal process of the IEEPA-based executive order, which was still underway when Trump stepped down.

Two, Trump’s ban did not give TikTok or WeChat any time or opportunity to respond to the allegations. He tried to basically issue an executive order one day, ban the apps the next day, and end the discussion there. This lack of “procedural justice” was another reason why his ban was struck down. No matter how strong the evidence and case against TikTok or WeChat might be, every affected party must receive proper notice and get an opportunity to respond with its side of the story and be heard. Due process is a key pillar of the American judicial system, but it can still be manipulated.

Fast forward to today, the RESTRICT is taking care of Problem One, while the TikTok hearing just took care of Problem Two.

Ad-Hoc Procedure, New Power

Regardless of which side of the TikTok issue you are on, I think it is fair to say that the TikTok hearing did not reveal anything that would’ve caused anyone to switch sides. No one really learned anything new from a hearing that, at times, felt like a show trial and a giant waste of time – a sentiment I shared on ChinaTalk on the day of the hearing.

Now that I have had more time to think about the hearing in the context of the IEEPA, it appears that the event was set up more to remedy the procedural weakness of Trump’s TikTok ban attempt, not designed to unearth any useful information in a public forum. It is hard to argue now that the affected party did not have an opportunity to be heard, when the affected party’s CEO testified in front of Congress for four-plus hours on C-SPAN3.

Procedural justice, check!

Meanwhile, the RESTRICT Act serves the function of “improving” the IEEPA. To update the "information and informational materials" exemption to be more in line with the technologies of our time, the bill went to the opposite extreme by including every conceivable category of technology products under the sun. The current draft also did away with another check. Under the IEEPA, the President would need to renew any emergency power action with Congress on an annual basis; no such renewal requirement exists under the RESTRICT Act.

With Congress drafting a bill that is tailor-made to give the executive branch the power to ban or outlaw any Chinese technology, the awkwardness of either trying to fit an executive order into the older IEEPA framework or negotiating with TikTok because a ban is legally too tenuous to carry out is no longer a concern.

New power, check!

Before we sound too alarmist about the RESTRICT Act, however warranted, it is important to note that the bill still needs to go through committee markups and firm up many details. Lack of clarity on topics like, whether a VPN user would be punished for accessing banned apps, has caused lots of concern and outrage, particularly from the crypto community.

This concern has forced Mark Warner’s office to explain that the bill is only targeting companies, not at individual users, which only goes to show you that even the primary co-author of the bill has not thought through all the implications of a bill as expansive as the RESTRICT Act. There is always the possibility of a court challenge, but as you can see, seemingly deliberate steps on both the procedural and legislative front have been taken to minimize the risk of another embarrassing lawsuit that makes the President look impotent against the China threat.

So don’t hold your breath waiting for TikTok to get banned. That won’t happen until the RESTRICT Act, or something similar, becomes law first. But once it does, the floodgate of ban will be blown wide open.