Sunday, 27 September 2020

Trump Executive Order set to ban TikTok

by Harry Baldock, Total Telecom
Friday 07 August 20

The newly signed order gives TikTok owner ByteDance 45 days to sell up to a US firm or face an outright ban

Late yesterday night, US President Trump signed an Executive Order that will prohibit US transactions with the Chinese companies that own TikTok and WeChat. Coming into effect in 45 days, TikTok owners now face a stark decision: sell to a US-based firm or be excluded.   The video-sharing app has reached enormous popularity in recent months…

Late yesterday night, US President Trump signed an Executive Order that will prohibit US transactions with the Chinese companies that own TikTok and WeChat. Coming into effect in 45 days, TikTok owners now face a stark decision: sell to a US-based firm or be excluded.

 
The video-sharing app has reached enormous popularity in recent months, with around 800 million active users worldwide. It has been previously suggested that ByteDance, the company which owns TikTok, is valued at over $100 billion. 
 
However, it is precisely this meteoric rise which has made the app so dangerous, suggest US lawmakers. ByteDance has an internal committee of the Chinese Communist Party and, as of a law introduced in 2017, is obligated to cooperate and support the Chinese national intelligence network. Data gathered from US citizens, it is feared, will not be secure.
 
“The spread in the United States of mobile applications developed and owned by companies in the People’s Republic of China (China) continues to threaten the national security, foreign policy, and economy of the United States,” said President Trump in a letter to House Speaker Nancy Pelosi.
 
One possible solution to this politically charged issue would be to sell the app to a US company. Last Sunday, it was reported that Microsoft was in negotiations to buy TikTok’s presence in the US, Australia, Canada, and New Zealand – a move for which President Trump was quick to seize credit. New reports are even beginning to suggest that Microsoft is seeking full ownership of the app in every one of its operating countries besides China, though this seems dubious.
 
For Microsoft, picking up the platform could be very profitable. It already has substantial investments in social media via its ownership of LinkedIn and TikTok facing a potential ban certainly puts the US giant in a strong negotiating position.
 
However, becoming embroiled in the ongoing geopolitical clash could be painful for Microsoft. China has lambasted the US’ treatment of TikTok, today suggesting that the Executive Order stomps on market principles and international rules. If China were to retaliate economically for such a slight, Microsoft itself would be a tempting target, being one of only a handful of US companies to have a sizable business presence in China. Microsoft may be better off not painting a target on its back.
 
 
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