TikTok Parent Company And The US Continue To Explore Options As Trump’s Ban Date Approaches

ByteDance is continuing to talk with the U.S. government in an effort to reach an agreement that will allow its TikTok app to continue operating in the U.S. and the parent company to hold a small stake in its operations here. The discussions continue with an imminent Sept. 20 deadline, the date the executive order released by President Trump on Aug. 7 required ByteDance to shed U.S. operations from TikTok. Subsequently, on Aug. 14, Trump released another executive order granting the company 90 days to finalize a contract.

Trump had quoted “credible evidence” that the music and video sharing app of the Beijing-based media and tech business would share user data with the Chinese government as explanations for the actions. U.S. front-runners suspected TikTok operations include Microsoft, which is a supplier to Walmart, and Oracle. A U.S. company will monitor any data generated by U.S. TikTok users, which would be a treasure trove of knowledge about the preferences and desires of the users. 

But ByteDance is still hoping to keep a small stake in the U.S. operations, a person who is familiar with the talks told the USA a few days back. Discussions regarding such an outcome have recently increased after China toughened its export rules for technology, The Wall Street Journal published on Wednesday. 

The sales talks, which appeared imminent as August came to an end, apparently got complicated by the question of whether the core algorithms of TikTok were part of the contract. China’s artificial intelligence technology export restrictions will require its government’s approval for a deal to go through. The core algorithm is a “primary asset” any U.S. operations buyer might like and ByteDance is likely trying to get a U.S. buyer license from the Chinese government, Wedbush Securities analyst Daniel Ives said last week in a note to investors.

“ByteDance and the respected boards are in a race opposed to the clock to find a compromise with Chinese officials and get a deal inked, otherwise the plug could get pulled on TikTok in the U.S. which would be a punitive scenario with long-lasting valuation/user consequences down the road,” he said.

TikTok, Microsoft, and Oracle declined to comment on the article in The Wall Street Journal. TikTok has also filed a lawsuit alleging that the Trump administration “neglected our concerted attempts to remedy its grievances” and that its right to due process was stripped of its Fifth Amendment. In 2016 the Chinese company ByteDance founded TikTok, known as Douyin in China. The Beijing-based media and tech company acquired the Musical.ly teen-focused social app the following year, and the company combined these two apps in 2018.

Originally a platform for wacky amateur music-filled videos, TikTok has rapidly developed its own roster of influencers and attracted stars like Alicia Keys, Dua Lipa, Justin Bieber, Katy Perry, and Snoop Dogg – and built up a 100 million US following.

TikTok Menance Legal Action Against Trump US Ban:

This goes like trending news in States after Donald Trump ordered companies to stop doing business with the Chinese app within 45 days, TikTok is threatening legal action against the US. The firm said it was “shocked” by the US President’s executive order detailing the ban. TikTok said that it will ‘pursue all practicable options’ to ‘ensure that the rule of law is not ignored.’ 

Mr. Trump released a similar order at a significant escalation in Washington’s stand-off with Beijing against China’s WeChat. The owner of WeChat, Tencent, said: “To get a complete understanding we are updating the executive order.”

Tencent is also a major gaming firm as well as WeChat and its investments include a 40 percent interest in Epic Games-the business behind the massively successful video game Fortnite. Citing national security issues, the president has already threatened to ban TikTok in the US, and the company is now in negotiations to sell its American business to Microsoft. They have an agreement to meet by September 15 a deadline set by Mr. Trump.

The Trump administration reports that the Chinese government has access to TikTok acquired user information which the company has refuted. TikTok, owned by ByteDance from China, said it had been trying to engage with the US government “in good faith” for nearly a year.

However, it said: What we came across instead was that the administration did not pay attention to the facts, imposed terms of an agreement without going through normal legal channels, and sought to inject itself into private sector negotiations. The executive orders against the short-video sharing site and the WeChat messaging service are the latest step in an increasingly large campaign against China by the Trump administration.

What Did Donald Trump Say?

In both executive orders, Mr. Trump says that the proliferation of mobile applications produced and operated by Chinese companies in the US threatens US national security, foreign policy, and economy. The U.S. government says TikTok and WeChat “capture from their users’ huge quantities of information.” 

This data collection aims to give the Chinese Communist Party access to personal and proprietary information about Americans. The executive order also states that both apps collect data on Chinese nationals visiting the US, enabling them to “keep tabs” on Beijing.

Mr. Trump’s executive order also says data collection by TikTok may allow China to track U.S. government employees and collect personal information for extortion, or conduct corporate surveillance.

He states that reports suggest content considered to be politically offensive by TikTok censors, such as demonstrations in Hong Kong and China’s persecution of the Uighurs, a Muslim minority. The directives from the National Emergencies Act and the International Emergency Economic Powers Act were issued under legal authority.

What Does TikTok Say?

TikTok claims the executive order released in the most comprehensive response to the U.S. government so far is focused on “unnamed studies without citations.” 

“We made it clear that TikTok has never shared user data with the Chinese government on its request, nor censored content,” he said.

“We have also expressed our willingness to seek a complete sale of the US company to an American firm.”

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