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It seems increasingly likely that TikTok will not be able to sell its US operations before the mid-September deadline imposed in an executive order issued by US President Donald Trump last month. That doesn’t mean that the video app loved by tens of millions of teens will shut down overnight.
Trump said on September 10 that he would not extend the September 20 deadline for a deal. But ByteDance Ltd, the Chinese owner of TikTok, may need more time to negotiate with suitors after new regulations from Beijing complicated the deal. The president has said that if a deal is not closed by the specified date, he will close TikTok.
But unlike India, which recently banned the app and immediately cut off user access, the US does not give the president the authority to shut down a social media site or require service providers to block access to one. application. Thus, TikTok could stay on people’s phones and they could still create dance videos, at least for a while.
Experts say the most likely scenario would be requiring Apple Inc and Alphabet Inc’s Google to remove TikTok from their app stores and cut off access to developer tools, preventing new downloads and subsequent software updates for current users. That, in effect, could render the app down in the long run. The TikTok user experience could degrade even sooner for buyers of Apple’s next iPhone model if TikTok loses developer access and is unable to format the app and its features for Apple’s newest smartphone.
“There is no authority in the US to ban TikTok content, ban people from viewing it, or ban people from working with TikTok, that’s just the president exaggerating his authority to push the deal,” says James Lewis, Director of Technology Policy Program at the Center for Strategic and International Studies, a Washington think tank. “You can put obstacles, but there are solutions.”
TikTok has filed a lawsuit against the Trump administration calling the executive order unconstitutional.
The order could also make it harder for other companies to do business with TikTok, such as buying ads or selling the company’s cloud services. Without access to US servers from Amazon Web Services, for example, TikTok could be forced to route massive amounts of data through overseas servers and that could materially slow down the user experience, says Daniel Sinclair, a researcher at independent security that studies TikTok and social media. .
US officials have been concerned about Chinese control over US citizen data for years. But Trump increased the pressure on ByteDance earlier this summer as part of a broader campaign against China ahead of the November US presidential election. Trump has been frustrated by the slow implementation of a trade deal between the two countries and the spread of the coronavirus, for which he blames China.
In August, Trump issued a pair of executive orders requiring ByteDance to either sell TikTok’s operations in the US or shut them down, citing national security concerns. The administration claims that ByteDance could be forced to hand over US user data to Beijing or use the app to influence the 100 million Americans who use it.
Trump’s orders sparked a deal frenzy from potential US suitors: Oracle Corp and a joint bid from Microsoft Corp and Walmart Inc emerged as the top contenders. But a new Chinese law limiting the sale of artificial intelligence technology outside its borders has slowed down the deal negotiations as all parties seek clarity on what the new rules would mean for a TikTok sale.
In preliminary talks with Chinese officials, ByteDance was told that any proposal must be submitted for approval with detailed information on technical and financial issues, and the review will be substantial and take time, a person familiar with the discussions told Bloomberg News. Trump is not being flexible. “Either we will shut down TikTok in this country for security reasons, or it will be sold,” Trump told reporters Thursday before boarding the presidential plane for a campaign trip to Michigan. “There will be no extension of the TikTok term.”
Now, it is unclear whether TikTok will meet the September deadline to sell its US operations outlined in Trump’s initial executive order issued on August 6. That order gave TikTok 45 days to sell itself or stop doing business with Americans, invoking the International Emergency Economic Powers Act. , which gives the president broad authority to regulate financial transactions in a national emergency.
“The White House could argue that the terms and conditions that users sign and consent to when they download an app is a financial transaction, even though cash doesn’t change hands,” Lewis says.
That means the Trump administration could order American companies like Google and Apple to stop carrying the app, but it couldn’t stop American teens from finding solutions to access the website or view the content.
Apple and Google did not immediately respond to a request for comment.
Regular TikTok users have already started looking for solutions. One popular TikTok creator, calling himself @carrieberkk on the app, garnered 90,000 views with an informational video advising users to change their phone’s locale to Canada, where he calculated that the app would not be banned.
Sinclair, the researcher, says this tactic doesn’t really work. If the app were banned only in the US, users would have to sign up for an iTunes account outside the US. But it is also unclear whether the ban would prevent Apple, a US company, from offering TikTok on its App Store in abroad.
“Some creators who depend on TikTok for their livelihoods would probably have to get a burner phone to keep TikTok going, but it’s certainly not impossible,” says Sinclair.
ByteDance has already closed operations in other locations. In Hong Kong, the company decided to stop its operations after China passed a new national security law that would make it difficult for TikTok to do business there.
In India, where the country has the power to force service providers to block access to websites, government officials have banned TikTok as part of a larger shutdown of Chinese-owned apps after a deadly border standoff with China. The TikTok app no longer appears in Indian app stores and Indian users who already had the app downloaded on their phones now see an error message stating that the company is “complying with the directive of the Government of India “.
An American ban would be different. “There are laws on the books for pirated movies or child pornography, but if America wanted to do what India has done, they would need new legislation and even then it might not stand up to the challenge of the First Amendment,” says Lewis.
Trump’s second executive order, issued on Aug. 14, gave TikTok 90 days to divest its U.S. business under a separate authority, citing a ruling from the U.S. Foreign Investment Committee. Experts say the order, which would take effect in November or later if extensions are granted, carries greater weight and more specificity as CFIUS has broad powers granted by Congress to undo ByteDance’s 2017 purchase of the sync app. of lips. Musical.ly, which was later rebranded as TikTok.
TikTok declined to comment on the deal negotiations.
In an interview last month with Bloomberg News, Acting CEO Vanessa Pappas said that TikTok will continue to operate its successful music video app in the US, regardless of what emerges from the Trump administration’s ban threat on its deal. She said the company was exploring multiple ways forward, refusing to provide more specificity. – Bloomberg
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