TikTok CEO Invites Facebook To Join Court Challenge As Commerce Department 'Download Ban' Looms

Update (1010ET): Bizarrely, the interim CEO of TikTok, Vanessa Pappas, has invited Facebook to join TikTok's lawsuit against the Trump Administration, a long-shot attempt to get the courts to overrule the president. Experts believe a favorable ruling is unlikely because President Trump has invoked "national security", which the White House has broad latitude to protect.

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With the White House still ratcheting up the pressure on ByteDance and China, Reuters has just confirmed American millennials' worst fears: That is, if a deal for American control of TikTok isn't completed by Sunday evening in the US, the Commerce Department will move to block any future downloads of the apps in the US, a critical step toward shutting them down in the US, as President Trump has insisted.

Moments later, Commerce Secretary Wilbur Ross told journalists that WeChat - another Chinese app targeted in one of Trump's executive order - will be "shut down in the US" by Sept. 20 if a deal isn't struck. He also said talks between TikTok and CFIUS are "ongoing", suggesting that the deal is far from finished.

Reports from late last night suggested that Beijing would be comfortable with the TikTok-Oracle-White House deal, so long as TikTok's content-recommendation algorithm isn't transferred to the US.

With deal talks coming down to the wire, the Commerce Department is also reportedly preparing to issue an order on Friday barring anyone in the US from downloading the Chinese-owned apps - both WeChat and TikTok - starting on Sept 20, unless President Trump rescinds the order by late Sunday evening.

According to Secretary Ross, the Department of Commerce will announce prohibitions on transactions relating to both mobile applications on Friday.

"The Chinese Communist Party CCP has demonstrated the means and motives to use these apps to threaten the national security, foreign policy, and the economy of the U.S," the Department of Commerce said in a statement to the press, released just moments ago.

Though the comments also introduced more confusion, as the administration has apparently kicked the can once again, saying that TikTok will have until Nov. 12 before a total ban, giving the negotiators more space to hash out a deal.

US social media companies like Snap and Facebook rallied on the news. Notably, Reuters reported that the new directive wouldn't impact US companies interactions with these apps outside the US, a provision that American corporates doing business in China have demanded, since WeChat is the dominant communications platform for people inside China.

The statement also suggests that negotiations will likely drag on past Sunday.

According to the SCMP, ByteDance says a final "deal" has not yet been signed. And even once the US and both companies assent, the Chinese Ministry of Commerce will also have a say in the final plan. So-called "Experts" who spoke to the SCMP said that there's still potential for China to shoot down the deal.

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The Commerce Department has released a statement about its latest round of "tough on China" actions targeting TikTok and WeChat:

In response to President Trump’s Executive Orders signed August 6, 2020, the Department of Commerce (Commerce) today announced prohibitions on transactions relating to mobile applications (apps) WeChat and TikTok to safeguard the national security of the United States. The Chinese Communist Party (CCP) has demonstrated the means and motives to use these apps to threaten the national security, foreign policy, and the economy of the U.S. Today’s announced prohibitions, when combined, protect users in the U.S. by eliminating access to these applications and significantly reducing their functionality.

"Today’s actions prove once again that President Trump will do everything in his power to guarantee our national security and protect Americans from the threats of the Chinese Communist Party," said U.S. Department of Commerce Secretary Wilbur Ross. "At the President’s direction, we have taken significant action to combat China’s malicious collection of American citizens’ personal data, while promoting our national values, democratic rules-based norms, and aggressive enforcement of U.S. laws and regulations."

While the threats posed by WeChat and TikTok are not identical, they are similar. Each collects vast swaths of data from users, including network activity, location data, and browsing and search histories. Each is an active participant in China’s civil-military fusion and is subject to mandatory cooperation with the intelligence services of the CCP.  This combination results in the use of WeChat and TikTok creating unacceptable risks to our national security.

As of September 20, 2020, the following transactions are prohibited:

  1. Any provision of service to distribute or maintain the WeChat or TikTok mobile applications, constituent code, or application updates through an online mobile application store in the U.S.;
  2. Any provision of services through the WeChat mobile application for the purpose of transferring funds or processing payments within the U.S.

As of September 20, 2020, for WeChat and as of November 12, 2020, for TikTok, the following transactions are prohibited:

  1. Any provision of internet hosting services enabling the functioning or optimization of the mobile application in the U.S.;
  2. Any provision of content delivery network services enabling the functioning or optimization of the mobile application in the U.S.;
  3. Any provision directly contracted or arranged internet transit or peering services enabling the function or optimization of the mobile application within the U.S.;
  4. Any utilization of the mobile application’s constituent code, functions, or services in the functioning of software or services developed and/or accessible within the U.S.

Any other prohibitive transaction relating to WeChat or TikTok may be identified at a future date. Should the U.S. Government determine that WeChat’s or TikTok’s illicit behavior is being replicated by another app somehow outside the scope of these executive orders, the President has the authority to consider whether additional orders may be appropriate to address such activities. The President has provided until November 12 for the national security concerns posed by TikTok to be resolved. If they are, the prohibitions in this order may be lifted.

The notices for these actions will be posted on the Federal Register at approximately 8:45AM EDT on Friday, September 18, 2020.

Background:

On August 6, 2020, President Trump signed Executive Orders (E.O.) 13942, Addressing the Threat Posed by TikTok, and E.O. 13943, Addressing the Threat Posed by WeChat. In the E.O.s, the President determined that the apps capture vast swaths of information from U.S. users, leaving the data vulnerable to CCP access for nefarious purposes. Commerce, at the Direction of the President, was required to identify transactions within 45 days to protect national security and the private data of millions of people across the country. Today’s announced prohibitions fulfill the President’s direction and mitigate national security risks.