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Donald Trump begins the process that could effectively ban TikTok in the US

By | Published on Friday 7 August 2020


Donald Trump last night issued the executive order that could effectively ban the use of TikTok in the United States from next month. Though it’s not only TikTok being targeted, with WeChat facing similar sanctions, that being the messaging app owned by a certain Tencent.

The move by Trump’s government to ban TikTok is no surprise. American politicians on both sides of the political spectrum have been expressing concern for some time about what the China-owned video-sharing app – and its parent company Bytedance – do with all the user data they collect. And in more recent weeks both Trump himself and some of his closest advisors have indicated that a ban was imminent.

What last night’s executive order actually states is that, from 15 Sep, American citizens and companies will be banned from undertaking “any transaction” with “ByteDance Ltd, Beijing, China, or its subsidiaries”.

Quite what that means will no doubt be subject to plenty of legal wrangling in the weeks ahead, and obviously it’s debatable how enforceable the ban will be, given more web-savvy Americans can always use a VPN in order to circumvent any blockades enforced on the country’s internet.

Nevertheless, it’s a significant development that greatly adds to TikTok’s political woes. And also increases the urgency of the ongoing talks that could see Microsoft – or another American company – acquire the TikTok business in the US, and probably a number of other countries too.

The US government has indicated that such a deal would overcome its concerns. Though Trump recently threw a bit of a spanner in the works in that domain too by suggesting some of the profits of any such deal should be paid to the American government. Another typically unusual demand from the President.

The ongoing uncertainty around the future of TikTok in the US provides more good news for rival app Triller and also Facebook’s Instagram, with its newly launched TikTok-esque Reels service. Both will be hoping that the mere prospect of TikTok being banned from next month will persuade its users to try out their competing services.

As for the official reason for the ban, the executive order runs through the much previously discussed concerns about how the Chinese government accesses and exploits data from the TikTok app, and also talks about the Chinese Communist Party using the platform to spread disinformation. Plus, there is a reference to the ban instigated by the Indian government in June.

Opinion is divided over whether or not any of those concerns are justified. Bytedance, of course, insists that it complies with data protection laws within each country in which it operates. And some see the move as more of a pre-election bid by Trump to pander to his nationalistic base by appearing to be tough on China.

Meanwhile, some experts have pointed out that the way Bytedance manages its data and platforms isn’t really all that much different to other Chinese companies with operations in the US. So if you ban TikTok, what about the others?

Which brings us to the ban on WeChat, the more surprising of last night’s executive orders. For those Americans that use the messaging app – in many cases to communicate with friends, family or colleagues in China – that ban will be much more significant. Not least because their contacts in China are already banned from using WeChat’s American rivals. Meanwhile, plenty of American businesses operating in China use WeChat as a communication and payment platform.

And, of course, from a music industry perspective, it’s very interesting to the see the US government take on Tencent as well as Bytedance, given that the former is now also a shareholder in Universal Music, Warner Music and Spotify. An all out assault on the Tencent group would also have an impact in the gaming and wider technology sectors in the US.

However, whereas the TikTok ban applies to all things Bytedance, the executive order covering WeChat is very clear that that ban only applies specifically to the messaging app, not to its owner’s other businesses. And behind the scenes government reps have also been keen to stress the WeChat ban does not apply to Tencent at large.

That said, that doesn’t mean that the Trump government’s big crackdown on Chinese tech won’t ultimately go beyond TikTok and WeChat.

Ahead of yesterday’s executive orders, the US government also made recommendations that Chinese firms listed on US stock markets should be delisted unless they provide regulators with access to their audited accounts. And while the main Tencent company is listed on the Hong Kong stock exchange, the standalone Tencent Music company is listed in New York.

So, all in all, Trump’s pre-election stand against China could, as yet, have some interesting ramifications for the business of music.