Time’s not up for TikTok (yet)
Friday 2nd October 2020
On Sunday, a US federal judge granted a preliminary injunction to block the proposed ban on the popular video-sharing platform TikTok amid ongoing negotiations to sell the app’s US operations to meet President Trump’s demands. This follows accusations by the Trump administration that the app presents a national security threat due to links with the Chinese government. The proposed ban on the app, which has over 100 million active users in the US alone, is yet another example of growing geopolitical hostility towards Chinese tech companies operating in the West.
Earlier this year, President Trump announced that the Chinese-owned app would be removed from US app stores following accusations that TikTok’s parent company ByteDance was illegally sharing private user data with the Chinese government. Despite the company strongly denying these claims, the app was due to be banned in America from September 20th. Microsoft and Oracle both made rival approaches to ByteDance to acquire the US operations, but Microsoft’s bid was rejected. Hours before the policy was due to come into force, the Department of Commerce gave a week extension to the original ban deadline, as TikTok worked to get a deal approved by the government.
The proposed deal would create a new organisation, TikTok Global, with investment from Oracle, a company which sells database software and technology, and retail corporation Walmart. The terms would include a US headquarters and the majority of the board being American. TikTok was hoping that some separation from the Chinese parent company would satisfy regulators’ security concerns, with the deal leaving the American companies with a combined stake of 20% in the new entity. However, Trump was not willing to support a deal unless it gave American companies total control of operations.
TikTok issued a legal challenge to prevent the government imposing a download ban, claiming it violated free speech and due process, which are the first and fifth US Constitution amendment rights. Despite the US Commerce Department arguing that Trump’s orders were “fully consistent with the law”, District Judge Nichols granted a temporary reprieve from the ban, stating that the government likely overstepped its authority under national security law. The judge agreed with the government that China presents a national security threat, but specific evidence that TikTok presented a threat that warranted a ban on downloads was “less substantial”. He gave until November 12th to negotiate new terms for the deal which are acceptable to Trump, or the app would again risk facing restrictions.
ByteDance is currently awaiting approval from the Beijing Municipal Bureau of Commerce over an export license; it is unlikely that they will grant a license to transfer technologies and algorithms, which power the app’s recommendation engine, as part of a deal. Although authorities in China are yet to respond to Trump’s allegations, China’s state-run Global Times has heavily criticised the potential ban, claiming that America is “shamelessly robbing a Chinese company”. The media outlet also vowed to act to prevent “globalization from becoming Americanization” for the sake of TikTok and other Chinese tech companies who have become entangled in what experts are calling the Tech Cold War.
In March, the Chinese owners of dating app Grindr were forced to sell to American buyers after a US government committee expressed similar concerns over security. The recent ruling follows Washington’s attempt to ban WeChat - another Chinese social media platform - over accusations of ‘cyber-espionage’ on American citizens, which was blocked by a US judge just a week earlier. The targeting of these apps could have big implications for Sino-American relations, but these security concerns over Chinese-owned technologies are not just confined to the US.
Earlier in the year, the Indian government banned TikTok and dozens of other Chinese applications, which they claim were illegally sharing data with the communist government, which further heightened political tensions over the shared border. The UK also announced that they were withdrawing all Huawei 5G equipment from operation following similar security concerns expressed by Washington. Although the long-term fate of TikTok in the US is unclear, this is yet another example of the West pushing back against growing Chinese tech companies as part of the emerging Tech Cold War.
