Updated TikTok says the Trump administration has gone quiet on whether it will allow the sale of its US operations to Oracle and Walmart.
The made-in-China social network on Tuesday asked [PDF] a US appeals court for an extension for its negotiations with Uncle Sam ahead of the November 12 deadline on which the service will not be allowed to operate in the USA.
Which is all just a wee bit farcical given that the Trump administration declared TikTok a national security threat then said it was willing to let it keep operating in America if it could find local buyers and operators and satisfy the government it had put in place security schemes that prevented data reaching China.
Oracle, Walmart, and other investors duly put up their hands and plenty of cash to buy TikTok's non-China operations. The USA’s Committee on Foreign Investment in the United States (CFIUS) was given the job of making sure the deal was to the government’s liking.
But TikTok says it hasn’t heard from CFIUS in weeks despite trying to work with it toward an agreement.
In a widely-shared statement TikTok said: “In the nearly two months since the President gave his preliminary approval to our proposal to satisfy those concerns, we have offered detailed solutions to finalize that agreement – but have received no substantive feedback on our extensive data privacy and security framework.”
TikTok added it therefore had no choice but to file for an extension, because not doing so would imperil the very sale that the government insisted must take place.
Even if CFIUS approves a deal, China is yet to do likewise under new laws that prohibit the export of AI-infused technologies, like the algorithm that makes TikTok hum. It is unclear if Beijing will approve any agreement, as while it desires the soft-power win of a Chinese app enjoying success in the West, it could find myriad reasons to block the transfer, making TikTok a problem for the incoming Biden administration to solve as part of its planned reset of Sino-American relations. ®
Updated to add
After this story was published, the US Treasury Department posted the following statement:
The Treasury Department remains focused on reaching a resolution of the national security risks arising from ByteDance’s acquisition of Musical.ly, in accordance with the August 14 order signed by the President, and we have been clear with ByteDance regarding the steps necessary to achieve that resolution. We refer questions regarding the pending litigation to the Department of Justice.
The mention of pending litigation almost certainly refers to an appeal of the US District Court for the Eastern District of Pennsylvania decision in which TikTok users were granted an injunction that allowed the social network to continue operating past the November 12 deadline. The plaintiffs argued that cutting off TikTok was an abuse of Presidential powers and also an unreasonable restraint on their trade.
US authorities have not previously said the litigation impacted their assessment of whether the Oracle/Walmart TikTok takeover had satisfied the security and ownership structure requirements set out by the Trump administration.