The Trump administration plans to ban TikTok, the hugely popular social media app, best known as a place for teenagers, to publish short videos as national security concerns regarding the app's relationship with the Chinese government increase.
On Friday evening, President Donald Trump told Air Force One reporters: "As far as TikTok is concerned, we are banning it from the United States." He said he would do so with economic emergency powers or an executive ordinance. It is unclear how Trump will enforce the ban – it would likely face serious legal and technical challenges.
According to a Bloomberg report on Friday, Trump considered signing an order to force TikTok's parent company, ByteDance, based in China, to sell its US operations. Some floated Microsoft as a potential buyer. But on Friday night, Trump told reporters he was against such a deal – which, according to the Wall Street Journal, has stalled Microsoft's negotiations to buy TikTok.
Treasury Secretary Steven Mnuchin confirmed that the app was reviewed by the government on Wednesday for national security reasons and that a recommendation would be available by the end of the week. A government decision banning TikTok or forcing the parent company to sell would fundamentally change the social media industry and disrupt the extraordinary growth in popularity of the app among its approximately 80 million users in the United States. And for the established U.S. social media giants Facebook and Google, the decision could significantly weaken their fiercest new rivals.
For months, Trump and other politicians have raised concerns about TikTok as a potential national security threat and fear that the company may censor content or access user data at the behest of the Chinese Communist Party. TikTok has refused to accept orders from the Chinese government to moderate content, and declares that all American user data is stored outside of China, either in the United States or in Singapore. However, reports from last year say that TikTok apparently censored content related to the Hong Kong protests and other controversial issues with the Chinese government, such as Tiananmen Square and Tibet's independence. These reports have fueled US government suspicions, particularly as China has expanded its surveillance state in recent years and diplomatic relations between the United States and China have cooled.
The Republicans escalated their attacks on TikTok this summer, also with the support of the two parties by the Democrats. On Thursday, Sens. Richard Blumenthal (D-CT) and Josh Hawley (R-MO) sent a letter to the Department of Justice requesting that the agency investigate TikTok and Zoom for reported violations of "American civil liberties." “And the nationals raises security concerns about the relationship between these companies and the People's Republic of China. This followed statements by Trump and U.S. Secretary of State Mike Pompeo in July, both of whom said the Trump administration was considering banning TikTok altogether.
A forced ban or sale of TikTok could also have negative consequences for the people who run TikTok. The move threatens to jeopardize the success of an app that has seen a rapid rise from a relative outsider to one of the most downloaded apps in the world. And since TikTok is one of the few social media startups that has recently competed with technology giants like Facebook, a weakening of TikTok could further reinforce the monopolistic nature of the U.S. tech economy.
"Although we do not comment on rumors or speculation, we are confident that TikTok will be successful in the long term," a TikTok spokesman told Recode. "The company is committed to protecting its privacy and security as we continue to make it enjoyable." to families and significant careers to those who work on our platform. "
Here you will find a breakdown of the current and expected results.
How that would work
You may be wondering how Trump can force a popular company like TikTok to sell out. The answer is complicated and bureaucratic.
If what is reported is true, Trump would issue the order to sell ByteDance from TikTok through the United States Foreign Investment Committee (CFIUS), an interagency committee that reviews foreign acquisitions and investments in U.S. companies that the national Can endanger security. The committee, chaired by Mnuchin, has the authority to block or reverse mergers and acquisitions of U.S. and foreign companies.
The agency is increasingly exercising its authority over foreign-owned technology companies operating in the United States. Last year, CFIUS helped block one of the biggest deals in technology history after Trump followed his recommendations to prevent Broadcom, based in Singapore, from taking over U.S. semiconductor company Qualcomm. The committee also forced Chinese owners to part with the Grindr dating app and the health startup PatientsLikeMe.
But as Geoffrey Gertz, a colleague at the Brookings Institution, wrote, technology companies have not always been the target of CFIUS. In the past, the committee "focused more on companies with military or intelligence connections," but more recently, personal data and high-tech intellectual property have become more important.
Last year, CFIUS began investigating ByteDance, which bought the Chinese lip-sync video platform Musical.ly in 2017 and then renamed and launched a similar app in the U.S. under the name TikTok. When this investigation is complete, the committee's recommendations are reported to result in Trump asking ByteDance to sell TikTok or to divest its U.S. operations.
It is unclear how CFIUS would enforce a possible termination of ByteDance and TikTok, but last year the committee fined an undisclosed company $ 1 million for failing to comply with a mitigation agreement, the first of its kind would have.
If Trump decides to sell ByteDance, it doesn't mean that TikTok as we know it will simply shut down in the U.S. TikTok is a valuable brand in a lucrative industry. Instead, the company behind the app will likely change hands.
If TikTok is forced to sell its US operations, it will have to find a buyer. And while tech giants like Facebook or Google could otherwise take the chance to buy a fierce rival, the current antitrust review could make it difficult for them to do so. This is where Microsoft can come in.
Unlike the other major technology companies, Microsoft is not significantly involved in the social media space, which could reassure regulators and increase the likelihood of the deal being approved. On the other hand, Microsoft is a dinosaur by technology company standards, and its involvement could be seen as a kiss of death for TikTok, the inventor of social media.
But if Microsoft does it well, TikTok could continue to grow and, with the support of a major U.S. technology company, take other social media companies, including Facebook, seriously. And Microsoft is by no means the only option – other companies could try to buy TikTok.
It's too early to say who exactly could buy TikTok's US operations. In the meantime, there are lots of clippy jokes to be made.
Update August 1, 3:10 p.m. PT: This article has been updated to include a statement from President Trump and new coverage of possible government actions against TikTok.
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