It's looking increasingly likely that TikTok won’t be able to sell its U.S. operations by the mid-September deadline imposed in an executive order issued by President Donald Trump last month. That doesn’t mean the video app beloved by tens of millions of teens will go dark overnight.
Trump on Thursday said he wouldn’t extend a Sept. 20 deadline for a deal. But ByteDance Ltd., TikTok’s Chinese owner, may need more time to negotiate with suitors after new regulations from Beijing complicated the deal. The president has said if a deal isn’t done by the specified date then he’ll shut down TikTok.
But unlike India, which recently banned the app and immediately severed users’ access, the U.S. doesn't afford the president the authority to close down a social media site or require service providers to block access to an app. So TikTok could remain on people’s phones and they’d still be able to create dance videos, at least for a while.
Experts say the more likely scenario would be requiring Apple Inc. and Alphabet Inc.’s Google to kick TikTok out of their app stores and cut off access to developer tools, preventing new downloads and subsequent software updates to current users. That, in effect, could render the app inoperable in the long run. The TikTok user experience could be degraded even sooner for purchasers of Apple’s upcoming iPhone model if TikTok loses developer access and can’t format the app and its features for Apple’s newest smartphone.
“There is no authority in the U.S. to ban TikTok content, ban people from watching it, or ban people for working with TikTok, that’s just the president exaggerating his authority to put pressure on the deal,” says James Lewis, director of the Technology Policy Program at the Center for Strategic & International Studies, a Washington think tank. “You can put obstacles up, but there are workarounds.”
TikTok has filed a lawsuit against the Trump administration calling the executive order unconstitutional.
The order could also make it difficult for other companies to do business with TikTok, such as buying ads or selling the company cloud services. Without access to U.S. servers from Amazon Web Services, for example, TikTok could be forced to route massive amounts of data through overseas servers and that could materially slow down the user experience, says Daniel Sinclair, an independent security researcher who studies TikTok and social media.
U.S. officials have been concerned about Chinese control over data of U.S. citizens for years. But Trump ratcheted up the pressure on ByteDance earlier this summer as part of a larger campaign against China ahead of November’s U.S. presidential elections. Trump has been frustrated by the slow implementation of a trade deal between the two countries and the spread of the coronavirus, for which he blames China.
In August, Trump issued a pair of executive orders requiring ByteDance to sell TikTok’s U.S. operations or shut them down, citing national security concerns. The administration claims that ByteDance could be compelled to hand over U.S. users’ data to Beijing or use the app to influence the 100 million Americans who use it.
Trump’s orders set off a deal-making frenzy by potential American suitors: Oracle Corp. and a joint bid by Microsoft Corp. and Walmart Inc. emerged as top contenders. But a new Chinese law limiting the sale of artificial intelligence technology outside its borders slowed deal negotiations as all sides seek clarity on what the new rules would mean for a TikTok sale.
In preliminary talks with Chinese officials, ByteDance has been told any proposal must be submitted for approval with detailed information about technical and financial issues, and the review will be substantial and take time, a person familiar with the discussions told Bloomberg News. Trump isn’t being flexible.
“We’ll either close up TikTok in this country for security reasons, or it will be sold,” Trump told reporters Thursday before boarding the presidential aircraft for a campaign trip to Michigan. “There will be no extension of the TikTok deadline.”