On 31 July, President Trump, citing national security concerns, issued an executive order requiring ByteDance, TikTok’s parent company, to sell its assets to an American buyer by 20 September or risk being barred from operating in the United States (US). This comes after TikTok’s rising global popularity resulted in increased scrutiny regarding the company’s links to the China Communist Party.
With this announcement, ByteDance has begun the search for a bidder for TikTok to satisfy the US government’s security concerns and to avoid a ban by the administration. However, due to disagreements over deal terms, ByteDance rejected the Microsoft offer which resulted in front-runner Microsoft pulling out of the deal at the eleventh hour. With a new deal looking unlikely, the US Commerce Department issued an order on 18 September, which will bar the downloads of TikTok and China-owned messaging app WeChat. This announcement was met with protest from both ByteDance and the China Commerce Ministry.
While the order will not bar US corporations from working with WeChat and TikTok outside of the US, the order will require any app platforms accessible within the US to “deplatform” the two applications.
The implication of deplatforming
While the US does not require the application to be removed from existing users, deplatforming of the applications will prevent ByteDance from being able to update the application or gain new users through new downloads. The lack of updates is expected to lead to the eventual degradation of the application’s usability. At the same time, the gap in the market will likely lead to the domestic development of alternative applications which will not be liable to similar executive orders, thus resulting in a permanent loss of US market share for ByteDance. This phenomenon has been observed in India which has implemented a ban on TikTok.
Is it ByeBye for TikTok?
While further discussions are on-going between ByteDance and its new potential buyer Oracle, ByteDance continues to fight against the original executive order issued by President Trump. On 19 September, a complaint was filed by ByteDance, challenging the administration’s recent moves against TikTok, citing that it was driven by political factors rather than to stop an unusual and extraordinary threat. In response, the administration postponed the planned ban by a week.
Despite the Justice Department request for Beeler to not block the order as it would undermine the president’s ability to deal with threats to national security, on 20 September, a preliminary injunction was issued by Judge Beeler blocking the Department of Commerce order due to the merits of the claims that it violates the First Amendment Rights. Beeler also stated that despite clear national security concerns of China and its corporations, there was little evidence to showcase how the WeChat ban will address these concerns.