Update (7/31/20) – As reported by CNBC, President Trump told reporters that he will ban TikTok from the United States as early as Saturday, August 1.
“As far as TikTok is concerned, we’re banning them from the United States,” Trump said.
This move will come through an executive order of another method, although Trump did not specify what course of action he would take.
As far as the reports stating the Microsoft is interested in purchasing TikTok from parent company ByteDance, Trump said “he didn’t support the reported spinoff deal.”
Original story follows.
TikTok, the Chinese-owned social media video app that is under scrutiny from the Trump administration, is reportedly in talks with Microsoft and other companies to sell itself and part from its parent company ByteDance.
As reported by The New York Times, the Committee on Foreign Investment in the United States, or Cfius, has been looking into ByteDance’s 2017 purchase of Musical.ly, which would become TikTok. It has decided to “order ByteDance to divest TikTok, and the government is currently discussing the terms of its separation. White House officials have further said that “TikTok may post a national security threat because of its Chinese ownership.”
It is unclear if President Trump, who has been informed of the investigation, will focus the divestment order on TikTok’s American operations or if it would include its more global business as well.
Another option Trump could exercise would be using “the vast powers of the International Emergency Economic Powers Act to bar certain foreign apps from American app stores.” Furthermore, the Trump Administration is also considering if it should add ByteDance to the “entity list,” which would bar it from purchasing American products and services without a special license.
TikTok has explores other options to avoid a sell, including having a non-Chinese investor, like Sequoia Capital, SoftBank, and General Atlantic, purchase a majority stake from ByteDance.
ByteDance’s current valuation is around “$100 billion,” according to research firm PitchBook, so any deal would indeed be a big one.
TikTok’s issues have been going on for months at this point, as lawmakers and the Trump administration have “questioned whether the app is susceptible to influence from the Chinese government, including potential requests to censor material shared on the platform or to share American user data with Chinese officials.”
“It is well established at this point that apps that have granular access to user data and location and other sensitive personal data are very much on the radar of Cfius and can cause significant national security concerns,” said John P. Kabaelo, a lawyer who represents companies in Cfius reviews.
TikTok is currently used by more than 800 million people worldwide, and TikTok’s Chinese offices have “swollen to thousands of employees.” TikTok also has offices in New York and Los Angeles.
TikTok has tried to fight these accusations and change its course, and has taken such action as hiring a top Disney executive, Kevin Mayer, to be its chief executive and pledging to publicly reveal the “algorithm that powers its app.”
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