TikTok Sale Probably Won't Happen Now, Here's Why

TikTok Sale Probably Won’t Happen Now, Here’s Why

The Trump administration’s proposed forced sale of TikTok’s U.S. operations is under review by the Biden administration and likely to be dropped.

The proposed forced sale of TikTok’s U.S. operations from China’s ByteDance to a group of U.S. companies led by Oracle looks unlikely to happen following the transition of power from the Trump administration to the Biden administration. The deal had been pursued by then-president Donald Trump who argued the app was a threat to national security due to its data collection practices and initially wanted it sold by the end of September 2020. However, legal challenges and inaction over lapsed deadlines have seen the deal left in limbo and now put on hold.

Concerns about TikTok go back to 2019 when it was accused of transferring user data to servers in China. Although ByteDance denied the claims, questions about how it processed data continued to arise. In July 2020, Trump, already in a trade war with China, raised the prospect of the app being banned in the U.S., which is TikTok’s biggest market. This appeared to be being subsequently borne out when Trump issued an executive order giving ByteDance 45 days to sell TikTok before it would be banned from doing transactions in the U.S., which would have made its operations impossible to maintain there. The deadline was later increased to 90 days, after which a game of cat and mouse ensued with legal challenges helping to keep the ban at bay.

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It had been thought that a less hawkish Biden administration might provide a reprieve for TikTok and it now appears increasingly like this will prove to be the case. Citing “people familiar with the situation,” The Wall Street Journal reports that the deal to sell TikTok has “been shelved indefinitely” as the Biden administration carries out “a broad review of his predecessor’s efforts to address potential security risks from Chinese tech companies.” This includes a review of “whether the national security threat cited by the Trump administration continues to warrant the ban.”

TikTok U.S. Ban: What Happens Next?

tiktok q&a feature

Discussions between U.S. security officials and ByteDance are said to be ongoing with a focus on data security and ensuring information about U.S. citizens collected by TikTok cannot be accessed by the Chinese government. In addition, the Biden administration is said to be determining what response is required before making any decision about the ban. With these things in mind, it may be some time before a decision is announced.

However, this measured approach is perhaps a good clue as to what the outcome is likely to be. Political affiliations aside, few would argue that the Biden administration would be likely to take as aggressive an approach toward China as its predecessor, likely preferring a more diplomatic approach if possible. While tensions between the U.S. and China are unlikely to evaporate, a thawing of relations is surely in the interests of both countries — something from which ByteDance and TikTok are likely to benefit.

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Source: The Wall Street Journal

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