The United States Department of Commerce says that it will vigorously defend President Donald Trump’s ban of TikTok unless its parent company ByteDance sells the United States share of the company. The latest announcement comes after United States District Judge Carl Nicols stopped the ban that would have prevented app stores from offering the TikTok download and further prevented app stores from providing updates to the app. Therefore, eventually, the app would become unusable.
Blocking App First Amendment Violation
In making his announcement, District Judge Nichols said that he believed that blocking the app now was an infringement on the First Amendment, especially in this month before the upcoming presidential election.
First Commercially Successful Consumer App
TikTok became the first Chinese consumer app to become a commercial success. Zhang Yiming founded it in 2012. The app did not, however, become internationally successful until 2016 when it purchased Flipgram and lip-syncing app Musical.ly.
Indonesia Bans TikTok
In 2018, Indonesia became the first country to ban TicTok, which they said offered “pornography, inappropriate content and blasphemy. Government officials lifted the ban a week later when the company agreed to open an Indonesian office.
TikTok Pays Fines Imposed by FTC
In February 2019, the United States Federal Trade Commission first went after the company because it said it was using part of the integrated Musical.ly app to collect personal data from minors. The government contended that since users could direct message and comment on posts from users under 13 without parental consent after downloading it from mobile-app stores, the company violated the Children’s Online Privacy Rule. The company paid a $5.7 million fine to the government and deleted all information obtained without parental consent on children in the United States under 13.
India Bans TikTok
The app continued to be wildly successful with over 1 million downloads by March 2019 when the Indian government temporarily banned the app stating that it contained child pornography. A month later, Indian government officials lifted the ban when TikTok agreed to open a location in that country.
U.S. Operations Investigated by the Committee on Foreign Investments
The United States government again became interested in TikTok in late 2019 when the Committee on Foreign Investment in the United States started investigating TikTok after Microsoft said they might be interested in purchasing the app. U.S. Treasury Secretary Steven Mnuchin heads the Committee on Foreign Investment in the United States. The committee has members from many government branches, including the Pentagon, the Justice Department and the Department of Energy. After an investigation, President Trump ordered the company to undo its transaction with Musical.ly and discontinue service to customers in the United States.
Kevin Mayer Appointed to Head TikTok
In May 2020, TikTok appointed former Walt Disney streaming chief Kevin Mayer as its new chief executive. That move, however, did not stop many governments, including India, Australia, and the European Union, from further investigating the app. After three months, Mayer stepped down as the company’s CEO.
Child Advocacy Groups Speak Out
Over 20 child advocacy groups complained to the government that TikTok was still collecting data about children without their parents’ permission and feeding it to the Chinese government. The company vehemently denied that they were providing that information and said they would never do that. Advocates say U.S. Federal Trade Commission and the Department of Justice officials contacted them about their concerns. At least three former employees spoke out against the company.
Trump Considers Ban as Punishment for Coronavirus
On July 7, 2020, President Trump said that he would consider banning TikTok in the U.S. as punishment for the Chinese government’s botching of how they responded to COVID-19. The president issued an executive order giving the company until September 15, 2020, to find a buyer in the United States for its operations in the country.
Microsoft Considers Purchasing U.S. Operations of TikTok
On August 2, 2020, Microsoft announced that they were thinking about buying the app. Two days later, Australia announced that they found no evidence that the app was breaking Australian laws. While other companies such as Apple, Facebook and Google already face governmental scrutiny. ByteDancer, however, rejected the company’s bid in early September.
Trump Bans TikTok Citing National Security Concerns
In August, Trump signed two executive orders that banned United States transactions with ByteDance citing national security concerns. The company then approached Oracle Corporation to see if they were interested in purchasing the company. Meanwhile, the Chinese government has said that any negotiations would require their approval, causing delays beyond the November presidential elections.
Officials expect that if the Oracle deal gets finalized, Oracle will not buy TikTok outright. Still, they would have a significant stake in how the company would operate in the United States and several other countries. The company would spin off TikTok to become a new company named TikTok Global.
Walmart’s Interest in TikTok
Walmart has also indicated that they may be interested in obtaining a share of the company. ByteDance operates an app in China where consumers can watch short videos and interact with influencers before buying products through the app. The retail giant needs to find a way to tap into those consumers and spread that ability to the rest of the world as they try to attract more Generation Z shoppers.
ByteDance Files Lawsuit
On August 24, 2020, ByteDance filed a lawsuit against the federal government. The lawsuit claims that the ban is based on an anti-China political campaign and not a national security threat. The Department of Commerce delayed implementing the ban until September 27, and the judge further halted that ban. Therefore, users in the United States can still download the app from mobile-app stores and use it in the United States.
Proposal Submitted to Chinese Authorities
On September 22, 2020, ByteDance put forth a proposal to the Beijing Municipal Bureau of Commerce for its approval. Details of that proposal show that 20% interest would be given to U.S. firms with Walmart would having a 7.5% share. State-controlled media has called on the government to deny the deal, claiming that what the United States is doing is gangster against the Chinese company.
