TikTok could be forced to stop operating in the U.S. following a hearing scheduled for next month
According to Reuters, a U.S. judge said today that he will hold a hearing on November 4th-the day after election day-to decide whether the U.S. government can ban transactions with TikTok. The popular short-form video app is owned by ByteDance, a Chinese manufacturer that the Trump administration fears is passing on personal and corporate data to Beijing. An executive order signed by the president in August ordered ByteDance to divest itself of TikTok's U.S. operations or have it removed from app stores in the states.
TikTok faces November 12 deadline that could result in the app getting banned in the U.S.
At first, the president gave a thumbs up to a deal that would create a new company called TikTok Global that would be 80% owned by ByteDance and 20% owned by U.S. firms Oracle and Walmart. The plan was for TikTok Global to go public via an IPO. Since the president had earlier mused about the U.S. Treasury getting paid for the country's participation in a TikTok deal, we wonder how the distribution of the shares would be handled with millions of dollars of possible profits at stake. Talks between all of the parties involved continue.
TikTok was the most downloaded app worldwide during the third quarter according to Sensor Tower
Meanwhile, a preliminary injunction issued by U.S. District Judge Carl Nichols on September 27th prevented the U.S. government from forcing the Apple App Store and Google Play Store from removing their listings for TikTok. The latter is not even close to being out of the woods in the states. First of all, the current injunction is temporary and another Trump-signed executive order against TikTok and ByteDance takes effect on November 12th. This order will shut down TikTok in the U.S. if there is no deal to divest the popular app by then. According to a schedule released by the court, no ruling on any legal matter before the court in relation to TikTok will be issued until late next month at the earliest.
What's holding up the deal are questions about majority ownership of the new company; additionally, China needs to approve the transaction and the country now bans the export of Chinese-made algorithms to other countries. TikTok uses such an algorithm to determine what videos subscribers can see. This technology reportedly would not be included in any deal between ByteDance, Oracle, and Walmart.
TikTok is beloved by many teens who use the app to create 15-second and 60-second videos of lip-synchs, dances, pranks, and more. During the pandemic, teens stuck inside their homes turned to the app to give them something to do. In the states, TikTok has 50 million active daily users and 100 million active monthly users; the latest data from app analytical firm Sensor Tower reveals that TikTok was the top-grossing app worldwide during the third quarter. It also was the most downloaded app on iOS and Android during the three months that ended in September. Consumer spending on the app rose 800% on an annual basis from July through September.
As with most Chinese tech firms that operate some sort of business in the states, the U.S. government considers TikTok and it's parent company to be national security threats because of their perceived close ties with the Communist Chinese government. There never has been any proof that these firms (such as Huawei and ZTE) have backdoors built into their products in order to obtain personal data. In the case of TikTok specifically, the fear is that 100 million Americans could be at risk of having this information sent to a server owned by the Communist Chinese government.
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