Under the
Protecting Americans from Foreign Adversary Controlled Applications Act (PAFACA), applications controlled by entities from designated foreign adversaries are subject to strict regulations in the United States. Specifically, PAFACA prohibits the distribution, maintenance, or updating of such "foreign adversary controlled applications" by web hosting services and app stores within the U.S., unless the application's owners execute a "qualified divestiture" within 270 days of its designation.
Designation Criteria for Foreign Adversary Controlled Applications
For an application to be classified as a foreign adversary controlled application under PAFACA, it must meet the following criteria:
- Application Type and User Base:
The application must be a website, desktop application, mobile application, or augmented/immersive technology platform that allows registered users to generate, share, and view content, and have at least 1 million monthly active users.
- Ownership and Control:
The application must be operated by individuals or entities domiciled in, headquartered in, maintaining a principal place of business in, or organized under the laws of a country designated as a U.S. foreign adversary under Section 4872(d)(2) of Title 10 of the United States Code. These foreign adversaries currently include:
- China (including Hong Kong and Macau)
- Russia
- Iran
- North Korea
- Cuba
- Venezuela (under the Maduro regime)
Alternatively, the application can be designated if at least 20% of its ownership stake is held by such persons.
- National Security Threat:
The application must be determined by the President to present a significant national security threat.
Implications for Ownership
If an Chinese entity owns a social media platform that meets these criteria, it would be required to divest its ownership to ensure the application is no longer under the control of a foreign adversary. Failure to comply within the specified timeframe would result in the application being effectively banned in the U.S., as web hosting services and app stores would be prohibited from supporting it.
While an Iranian entity could theoretically own a social media platform in the U.S., maintaining such ownership would necessitate compliance with PAFACA's divestiture requirements to avoid operational restrictions within the country.