President Trump must not have been happy with Oracle’s TikTok deal.
Beginning this Sunday, the U.S. Commerce Department plans to issue an order that would bar anyone in the United States from downloading Chinese-owner apps TikTok and WeChat. However, TikTok could avoid the ban if a U.S. technology company can make a satisfactory deal to acquire the company’s U.S. operations.
Reuters broke the news in an exclusive report this morning citing an unnamed senior official from the Commerce Dept. The source spoke on the condition of anonymity because the decision hasn’t been publicly announced yet.
If the report is accurate, it would appear President Trump wasn’t satisfied with Oracle Corp.’s deal to acquire the video-sharing apps U.S. operations. The Oracle deal didn’t involve a direct sale or transfer of assets. Therefore, Bytedance would maintain ownership of TikTok U.S. and it’s algorithms. Instead, Oracle would function as the Bytedances “trusted U.S. technology partner” and oversee the use of U.S. user data.
What the Ban Entails
Oracle and Bytedance hoped the proposal would be enough to satisfy the president’s data security concerns. However, it’s safe to assume the White House wasn’t happy with the deal if they’re planning to move forward with a ban.
If the ban goes into effect, the Commerce Dept. order will effectively ‘deplatform’ TikTok and WeChat in the United States. Alphabet Inc. would be forced to remove the two apps from the Google Play store. Additionally, Apple will take it off its app store. According to the unnamed Commerce Dept. insider, anyone else who offers the app on a platform “that can be reached from the United States” will also be forced to remove it.
The TikTok ban is getting all the publicity. However, the WeChat ban is much more likely to move forward. It could also have greater implications for U.S. businesses. WeChat is practically mandatory in China. Therefore, it’s an important medium for engaging Chinese consumers.
Many U.S. companies feared a ban would prevent them from utilizing this valuable marketing channel. Although, that doesn’t appear to be the case. The order won’t prevent U.S. companies from doing business on WeChat outside the United States. Additionally, Google and Apple can still offer the apps for download outside the United States.
Officials from the Commerce Department said they’re taking these drastic measures because the apps post a grave national and economic security risk. The apps collect untold amounts of data on U.S. users. With this, the Chinese government could exploit that data to attack or undermine the U.S.
Possible Abuse From the Chinese Government
The Chinese government owns large stakes in both companies, so there is reason to fear such abuse. Many Trump-hating mainstream media outlets cast doubt on these accusations and point to the fact that China. The companies deny sharing or exploiting U.S. user data. However, it would be naive for the U.S. to take those denials at face value.
The Chinese government and the Chinese Communist Party have longstanding reputations for dishonesty and deceit. So, there’s no reason the White House should put any faith in their denials. If Chinese intelligence officers showed up at Bytedance HQ, a company that employs several high-ranking CCP officials, and told the staff to turn over the user data or else we’re taking you to one of China’s numerous concentration camps, it seems unlikely that anyone would resist.
TikTok has 100 million users in the U.S. and the Chinese government has an inside line on every one of them. That’s a lot of data, and there’s a good chance there is something strategically valuable mixed in there somewhere. Several government agencies have already banned employees from using the app, but a nationwide ban hasn’t gone into effect as of yet.
However, that could change Sunday unless one of the big U.S. tech firms swoops in to make a deal that will pass President Trump’s muster before the deadline. Although, there’s no guarantee that Bytedance is willing to surrender control of TikTok’s U.S. operations. If a satisfactory deal doesn’t push through, TikTok won’t hold the title of fastest-growing U.S. social media app for much longer.