What does the new TikTok ban mean for federal contractors?
A new amendment to the Federal Acquisition Regulation (FAR) rule prohibiting TikTok on government devices extends the ban to devices owned by contracting firms and their employees. Jointly issued by NASA, the Department of Defense, and the General Services Administration, the interim rule was published earlier this month and went into effect immediately.
This amendment has major implications for all marketing and communications firms, and we’ll be discussing it in more detail in the coming weeks. In the meantime, any contractors directly impacted by the ban should be seeking clarity around some of its missing details. For example:
If new equipment must be procured in order to meet the requirements outlined by the new rule, who eats the costs? Employers? Employees? The government? And, do employers need to consider providing employees with work cell phones so that their employees can continue use of the social media platform on a device with no connection to their work?
The rule clearly specifies that any device used “in the performance of the contract” is subject to the prohibition—but what activities fulfill those criteria? Having a work email account on that device? Making a call to a coworker from a personal phone? Accessing professional development training on a personal laptop?
How will the ban be enforced? And what’s the penalty for violating it? In the proposed statewide ban in Montana, app stores would pay a fine of $10,000 per day for hosting the app.
While the language outlining the latest FAR rule is notably vague, it’s clear that more legislation targeting America’s most popular smartphone app is on the horizon. US lawmakers have expressed growing concerns that ByteDance, TikTok’s Beijing-based parent company, could be compelled to hand over sensitive American user data to the Chinese government, and dozens of states have already banned the social media platform from government devices. Could a sweeping federal ban be next?
Tiktok is projected to generate more than $11B in ad revenue by next year, and its massive popularity will present challenges for lawmakers who want to get rid of it. But the US government is one of the world's largest advertisers, and with federal agencies presumably pulling the platform from their media plans, a post-TikTok digital landscape is becoming easier to envision. For now, executives and senior teams working on government contracts should get clear on how they'd handle a ban, because barring a miraculous improvement in US-China relations, more restrictions are probably just around the corner.