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Donald Trump gives ByteDance 90 days to sell TikTok in the US
By Chris Cooke | Published on Monday 17 August 2020
Donald Trump issued a new executive order targeting TikTok on Friday. This time he directly ordered the app’s Chinese owner ByteDance to sell off the American side of its business within 90 days. Meanwhile, the US president himself signed up for an account on US-owned TikTok rival Triller.
Friday’s executive order came a week after another missive from Trump that said Americans would be banned from transacting with any ByteDance product or subsidiary from 15 Sep.
While that initial order will almost certainly be challenged in the courts, talks were already ongoing to sell the American TikTok business to an American company, most likely Microsoft, in a bid to circumvent the app’s mounting political woes.
However, getting any deal done by 15 Sep seemed like a tall order. With that in mind, most see last week’s executive order as the US government giving Bytedance, Microsoft and any other possible bidders a little more time to get a sale agreed and finalised, with 12 Nov the new deadline.
The new executive order talks quite a bit about ByteDance’s 2017 acquisition of Musical.ly, which gave the company a significant global audience – including in the US – for its subsequently revamped TikTok app. Of course, Musical.ly was also owned by a Chinese company, although it had relatively quickly set up a base in the US after it became super popular with young consumers there.
The new executive order states: “There is credible evidence that leads me to believe that ByteDance Ltd … through acquiring all interests in Musical.ly … might take action that threatens to impair the national security of the United States”.
With that in mind, the order went on, the Chinese firm must “divest all interests and rights in any tangible or intangible assets or property, wherever located, used to enable or support ByteDance’s operation of the TikTok application in the United States, as determined by the Committee On Foreign Investment In The United States”.
For its part, TikTok continues to deny the allegations of Trump et al – ie that it does dodgy things with the data it collects about its users. ByteDance insists it complies with all data protection laws around the world and that the Chinese government does not have access to its global userbase.
Opinion is still divided over whether or not the American government is acting on legitimate concerns, or if Trump is just trying to appear tough on China in the run-up to this year’s US presidential elections.
The FT reports that – as part of his ‘I’m tough on China’ rhetoric – the President could as yet issue statements and orders relating to other Chinese businesses that operate in the US, including Alibaba.
Whether that might include further action against Tencent – beyond the existing executive order relating to its WeChat app – remains to be seen. Tencent, of course, is now pretty active in the global music industry, being a shareholder in Universal Music, Warner Music and Spotify, while its own standalone music business is listed on the New York Stock Exchange.
Elsewhere in Trump v TikTok news, the President’s election campaign officially signed up to US-owned video-sharing app Triller this weekend. Triller has been busy capitalising on TikTok’s political and legal problems of late, resulting in its app enjoying a surge in downloads.
While having the official backing of Trump is possibly something of a poisoned chalice, Triller could still do with the President keeping up the pressure on its Chinese-owned rival for the time being. And if the wider ‘I’m tough on China’ shtick could also negatively impact on another Chinese-owned TikTok competitor that’s been doing well of late – that being Likee – well that would be helpful too.
