TikTok deal deadline not extended, but talks expected to continue, according to report
The Trump administration decided not to grant Chinese tech firm ByteDance a new extension to sell the US assets of its video-sharing app TikTok’s by midnight on Friday, but talks about the sale are expected to continue beyond the deadline, Reuters reported, citing two sources familiar with the situation.
ByteDance has been in talks for months to finalize a deal with Walmart and Oracle to shift TikTok’s US assets into a new entity under pressure from the US government.
US President Donald Trump signed an executive order in August to force the sale of the popular Chinese app, which has more than 100 million American users, claiming the platform’s Chinese owner could be forced to hand over a massive amount of US user data to Beijing and, therefore, poses a national security threat. TikTok denies the allegations.
The deadline for the sale was November 12. The administration had since extended the deadline twice, by 15 days and seven days, respectively, to December 4.
TikTok did not immediately respond to a request seeking comment, nor did the US justice or treasury departments.
The multiple extensions have raised questions about whether the outgoing Trump administration is going to let the proposed restrictions on TikTok slide.
If the sale is given the nod by Washington as sufficient in addressing the national security concerns, the deal still needs the approval by the Chinese government. Beijing recently announced new regulations on sales of artificial-intelligence technology, which includes the algorithm used in the app.
”In this game of high stakes poker its very possible that ByteDance looks to delay deal negotiations in hopes that the incoming Biden Administration eliminates this executive order in what would be a seminal shift for the US towards China on technology policy and send an ‘olive branch’ signal to Beijing,” said Dan Ives, an analyst on tech sector at Wedbush Securities in New York.
”The TikTok situation could potentially be a litmus test for Biden‘s first move towards ending the US China [tech cold war].”
ByteDance said it has made a new proposal after disclosing on November 10 that it had submitted four prior proposals including one in November that sought to address US concerns by “creating a new entity, wholly owned by Oracle, Walmart and existing US investors in ByteDance, that would be responsible for handling TikTok’s US user data and content moderation”.
A US Treasury representative told Reuters last week the last TikTok extension was granted to review a recently received “revised submission”.
ByteDance has sought reprieves from federal judges in at least four lawsuits attempting to overturn the forced sale and the proposed bans of the app in the US if the sale does not materialize.
The Commerce Department had said if TikTok failed to sell its US assets, the US would bar American web service providers from doing business with TikTok, essentially preventing the social media platform from operating normally in the US.
ByteDance argued in the lawsuits that both the forced sale and the proposed bans were illegal and violated the US Constitution.
Judge Carl Nichols in Washington had blocked the phase one ban in September that would have stopped new downloads of the app in the US. In the rulings, Nichols said the president had overstepped his authority in invoking a national emergency.
In late October, Judge Wendy Beetlestone in Philadelphia granted TikTok another reprieve from the order to have it effectively barred, in a separate case filed by three TikTok users.
In her ruling, Judge Beetlestone said the order would “have the effect of shutting down, within the United States, a platform for expressive activity used by about 700 million individuals globally”.
“Over 100 million of these TikTok users are within the United States, and at least 50 million of these US users use the app on a daily basis,” Beetlestone added.