The White House has issued two executive orders, showing 20th September as the date these companies must sell off their US divisions or cease operations.
There have been some developments in the Microsoft, TikTok, US Government talks, regarding a potential ban or sale of TikTok’s opporations in the US. Last Thursday, President Trump issued two executive orders on ByteDance and Tencent, regarding apps TikTok and WeChat. The orders claim these apps are a threat to National Security as they collect too much personal information from users, censor information sensitive to the Chinese Communist Party and are used to keep tabs on Chinese citizens. While the President can’t outright ban an app, he has the power to block Americans and American companies from working with TikTok or WeChat, for example Apple and Google must pull the apps from their app stores, which will effectively see the company cease operations in the US. We’ve seen a similar move been made with Chinese technology company Huawei last year.
This data collection threatens to allow the Chinese Communist Party access to Americans’ personal and proprietary information — potentially allowing China to track the locations of Federal employees and contractors, build dossiers of personal information for blackmail, and conduct corporate espionage.The White House – TikTok
In addition, the application captures the personal and proprietary information of Chinese nationals visiting the United States, thereby allowing the Chinese Communist Party a mechanism for keeping tabs on Chinese citizens who may be enjoying the benefits of a free society for the first time in their lives.The White House – WeChat
The orders gives these companies 45 days to either cease operations or sell their US divisions of the company, which marks the 20th September as their crucial deadlines.
What this means for TikTok
TikTok losing America, their largest market, will be devistating for the company. For this reason, it’s widely thought a sale will be made before the 20th September. Microsoft issued a statement showing interest in buying the company’s US sector, providing a full security revamp is made. More recently reports show Twitter may be also interested in buying the app, however would need financial help due to TikTok being worth more than Twitter. As TikTok is owned by ByteDance, a privately held company, valuations of the platform are unknown, but predicted between $20 billion and $50 billion.
TikTok are reportedly looking to sue the Trump Administration over the ban. TikTok released a statement in response to the executive order:
The text of the decision makes it plain that there has been a reliance on unnamed “reports” with no citations, fears that the app “may be” used for misinformation campaigns with no substantiation of such fears, and concerns about the collection of data that is industry standard for thousands of mobile apps around the world.TikTok Statement
What this means for Tencent
Tencent own many companies and hold stakes in huge companies worldwide. Messaging app WeChat is one of their largest companies with around 1 billion users. They also own gaming companies Riot Games and Griding Gear Games, as well as stakes in Epic Games, Activision Blizzard, Reddit, Spotify, Discord and more. It isn’t clear how the executive orders will affect these platforms. White House officials have said video game companies will remain unaffected, as the US Government are only looking to block WeChat. That being said, the US Secretary of Commerce get the final say in what subsidiaries get the ban.
Before Trump signed the orders, China warned the US not to go down this path.
If the US goes this way, then any country can take similar measures against any US company on the grounds of national security. The US must not open Pandora’s box, or it will suffer the consequences.Wang Wenbin – Chinese Ministry of Foreign Affairs