This archive report was first published on 7 August 2020.
On August 6, 2020, US President Donald Trump signed two executive orders banning US transactions between the US and TikTok owner Bytedance and WeChat owner Tencent. The orders, which take effect in 45 days, require the two companies to comply with US regulations, failure to which they will cease operations in the US.
The executive orders cite concerns over national security, alleging that TikTok captures location and browsing data that can be potentially used for blackmail and corporate espionage. According to the orders, this data collection threatens to allow the Chinese Communist Party access to Americans' personal and proprietary information.
TikTok has responded to the executive orders, stating that it had not shared data with the Chinese government and arguing that the orders undermine global business. The company says that it will pursue remedies to make sure the rule of law prevails, including going to court.
“…it sets a dangerous precedent for the concept of free expression and open markets. We will pursue all remedies available to us to ensure that the rule of law is not discarded and that our company and our users are treated fairly – if not by the Administration, then by the US courts,” TikTok stated.
Microsoft had previously reported that it expects to close the TikTok deal by September 15th, a few days before the executive order takes effect. The company had promised to purchase the service in the US, Canada, Australia, and New Zealand and revamp security features.
The prohibition on transactions between the US and WeChat's Tencent is shocking and might have unintended effects on US companies. While WeChat is mostly used by members of the Chinese diaspora, the parent company is heavily invested in the US, with various shareholdings in US companies like Warner Music, Tesla, Spotify, Epic games, and Riot games.
