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News Article

Dispute Over TikTok in the US Continues

By Andrea Villar | Fri, 09/11/2020 - 05:00

The clock is ticking and the contest for TikTok seems far from over. With no clear buyer in the game, just this Thursday Donald Trump said he does not intend to extend the deadline for the purchase of TikTok's US business, owned by the Chinese company ByteDance, past Sept. 15. Among the major suitors for TikTok's US assets are Microsoft and Oracle. The Chinese short video app operations in Canada, New Zealand and Australia are also part of the deal.

How Did It All Begin?

It all started on July 31 when President Trump told the press that he planned to ban TikTok in the country within 24 hours. The following week, on Sunday Aug. 2, Microsoft revealed that it was in talks to buy parts of TikTok. The next day, Trump said he would give ByteDance 45 days to sell TikTok to a US buyer. On Aug. 6, Trump issued an executive order banning US companies from transacting with the app and its subsidiaries as of Sept. 20.

Days go by and if any of the potential buyers (suitors) reach an agreement, the next step would be to submit the proposal to the US Committee on Foreign Investment in the United States (CFIUS).

What Are the Obstacles?

On Aug. 28, China’s Commerce Ministry presented a revised technology export control list. According to analysts, this would give the Asian country's government the power to oversee the regulation of any TikTok agreement. The Chinese government is not pleased and it would rather see TikTok closed than up for a forced sale, reported Reuters. This has made the negotiations complicated. However, ByteDance has said the Chinese government has no jurisdiction over the content of the app.

If no agreement is reached, ByteDance is already negotiating to avoid the sale of TikTok and continue its operations in the US, The Wall Street Journal reported this week. “Discussions about such an option have become important since the Chinese government took steps that make it difficult to sell to an American technology giant like Microsoft,” people familiar with the issue told the WSJ. Currently Mexico ranks 5th among the countries with more than 19 million active users of TikTok.

The data used in this article was sourced from:  
WSJ, Reuters
Andrea Villar Andrea Villar Journalist and Industry Analyst