Down to the Wire: TikTok at
Center of Battle Between US and China
September 7, 2020
These are nail-biting days for
the millions of people in the U.S. who use TikTok, the wildly popular
video sharing app owned by a Chinese firm.
The stakes are high.
The U.S. government, citing national security concerns, has given the
firm until Sept. 15 to sell itself or leave the country.
ByteDance, the Chinese firm that owns TikTok, is reportedly talking to
several potential buyers including Microsoft and Walmart, which have
joined forces to possibly make a bid, as well as Oracle.
And the Chinese government has changed its export rules about what parts
of the firm’s technology can be included in the deal to exclude the
app’s powerful recommendation algorithm. It powers the “For You” feature
in the app that suggests what short video a user would like to see next.
Whatever happens, the imminent fate of TikTok stands out as a key moment
in the Trump administration's efforts to shield the U.S. from China’s
reach, observers say.
“When it comes to trade and use of personal data, you need to trust the
other party,” said Scott Kennedy, a senior adviser and Trustee Chair in
Chinese Business and Economics at the Center for Strategic and
International Studies (CSIS). “The rising demands for trust are rising
right when trust between the U.S. and China is falling.”
While TikTok may be the most high-profile firm caught in the battle
between the two superpowers, it is not the first.
In 2018, the U.S. government blocked a subsidiary of the Chinese tech
giant Alibaba from buying MoneyGram over data privacy concerns. The
following year, the U.S. forced the Chinese owner of Grindr, the dating
app, to give up its control of the company.
Last month, President Donald Trump, citing concerns that TikTok “may
also be used for disinformation campaigns that benefit the Chinese
Communist Party,” issued an executive order banning U.S. transactions
with Chinese firms ByteDance and Tencent, the owner of WeChat, the
Trump followed up with a second executive order saying that ByteDance
had to divest itself from its ownership of Musical.ly, a video app that
it bought in 2017.
‘Clean Network’ vision
The administration’s efforts to block Chinese technology appear to be
accelerating in recent months.
In August, Secretary of State Mike Pompeo announced an expansion of the
“Clean Network” policy that calls for, among other things, apps made in
China to not be available in U.S. stores. The goal is to guard “our
citizens’ privacy and our companies’ most sensitive information from
aggressive intrusions by malign actors, such as the Chinese Communist
Party (CCP),” according to the press release.
For its part, ByteDance has denied accusations it would share data with
China, saying its U.S. users’ data is stored in the U.S. and its data
centers are outside of China.
ByteDance is reportedly entertained potential buyers, asking for $30
Interested buyers are exploring four possible ways to structure a deal,
according to a Reuters article, including buying the app without the key
software or seeking a transition period from U.S. officials.
the possibility of a deal was muddied with China’s recent update of its
export control list to include more technologies, including TikTok’s
Other U.S. companies may be drawn into the battle as it escalates.
China’s new export regulations, which includes artificial intelligence,
3-D printing technology and aerial drone technology, may affect how
researchers and firms in each country collaborate, said Heather Evans,
director of frontier technology research at the Asia Society of Northern
“We are seeing how tech companies in the U.S. and in China need to now
play a diplomatic role,” she said.
It’s unclear if the TikTok ban goes through on Sept. 15 if current users
will still be able to use the app. Most likely, observers say, Apple’s
App Store and Google Play, the store for Android phones, will stop
offering the app.