Here's everything we know about TikTok's future in the US — and everything we don't
Paige Leskin
- TikTok is facing a full-scale attack from the Trump administration attempting to threaten the its future in the US over claims that the app poses a national-security risk through its Chinese parent company ByteDance.
- ByteDance is entertaining TikTok acquisition talks with US tech companies to assuage concerns from the president. Microsoft is the favorite, and a potential deal is valued between $10 billion and $30 billion.
- Trump recently issued an executive order to ban "any transactions" between Americans and ByteDance beginning in mid-September. Questions remain of the legality of the order, or if it is enforceable at all.
- TikTok is expected to sue the Trump administration over the ban proposed in the executive order.
- Here's everything that's happened to threaten TikTok's future in the US, and what we know about what's to come.
Lawmakers began to question TikTok's presence in the US in November 2017, when TikTok's parent company ByteDance bought a US-based app called Musical.ly. Musical.ly was shut down and merged with TikTok in the US a year later.
Musical.ly was a watered-down version of TikTok: Its capabilities were limited to creating and sharing 15-second lip sync music videos. ByteDance's acquisition of Musical.ly was valued at $1 billion.
Source: Business Insider
China has been a target of the US government since Donald Trump took office in 2016. He's blamed China for the spread of the coronavirus pandemic, and accused Chinese companies of using their products to spy on US citizens for the state government.
As TikTok's popularity soared in 2019, lawmakers took a closer look at the app's ties to China. They've raised concerns of potential risks to US national security, the privacy of young users, and content moderation.
In 2019, TikTok paid out a $5.7 million fine to the Federal Trade Commission to settle allegations it illegally collected personal information from children under age 13 without parental consent.
Children's privacy advocates have since accused TikTok of breaking the terms of the FTC settlement by failing to alter policies, and refusing to delete videos and other content obtained illegally. As a result, the FTC and US Justice Department are now looking into allegations it failed to live up to its 2019 agreement.
Beyond national security, TikTok has faced allegations it's censors certain types videos, including content categorized as political, "culturally problematic," and coming from creators the company says are more prone to bullying.
Source: Business Insider, Business Insider
A federal investigation was launched in November 2019 via the Committee on Foreign Investment in the United States (CFIUS), a group that has the authority to approve or reject foreign business dealings over national-security risks. The review focused on ByteDance's 2017 acquisition of Musical.ly — CFIUS has yet to publicly release a decision.
During Trump's presidency, CFIUS has blocked deals in which tech corporations from China and Singapore were poised to take over US-based companies. Last year, CFIUS ordered the Chinese parent company of the gay dating app Grindr to sell the platform because the deal had not been submitted to CFIUS for review when it happened — the same justification for allowing CFIUS to review of the ByteDance and Musical.ly deal.
Source: Business Insider
The Trump administration first publicly said it was considering banning TikTok in the US in early July, although no details were provided about how that would happen. Experts have said there's no identifiable way Trump could legally ban the app in its entirety.
In separate comments made in early July, Secretary of State Mike Pompeo cited national security fears as a reason for a potential ban. A few days later, Trump said he was looking to ban the app as a way to punish China over the coronavirus pandemic.
Source: Business Insider
Reports emerged toward the end of July that the Trump administration had begun weighing two actions it could take against TikTok: a nationwide TikTok ban, or an order that ByteDance divest its TikTok operations in the US.
Source: Business Insider
To get ahead of Trump's calls for a ban, ByteDance started exploring the option to sell off TikTok's US operations, and entertained offers from US investors and tech companies. Trump acquiesced, and gave ByteDance until Sept. 15 to finalize a deal to sell off TikTok's US arm.
Trump gave ByteDance until September 15 to find a US buyer. If an acquisition hasn't been finalized, Trump says he'll ban TikTok — although it's unclear how he could do that.
The valuation of TikTok's US operations have been pegged anywhere between $10 billion and $50 billion, a high pricepoint that few US companies could afford. Microsoft is the only company to confirm it has entered conversations with ByteDance.
Other names in Silicon Valley have been floated as potential buyers. Twitter is reportedly in "preliminary" talks with ByteDance — but the company would have to raise billions to afford TikTok's massive price.
Source: Wall Street Journal
However, a recent report indicates that acquisition talks for TikTok's US operations are "unlikely" to end in a deal. It may indicate that ByteDance only entertained US buyers as a way to temporarily appease Trump — but has no plans to sell off its massively popular app.
Source: Business Insider
Despite ByteDance's offer to sell the app, Trump has issued an executive order to bar Americans from "any transactions" with TikTok or ByteDance. Before it's set to take effect in 45 days, the order is expected to face legal challenges.
Source: Business Insider
It's clear TikTok isn't going away without a fight. The company said it would "pursue all remedies available to us" one Trump's executive order was signed. TikTok is now reportedly gearing up to sue the Trump administration as soon as Tuesday regarding the order's constitutionality.
According to NPR, the lawsuit will claim the company wasn't given "a chance to respond" to the order, and that no evidence has been found to support the Trump administration's accusations that TikTok poses a national security and China has accessed user data.
If a suit is filed, Trump's executive order will, at the very least, be delayed as the courts review it.
It also remains to be seen whether ByteDance will follow through on its talks to sell off TikTok's US operations. But it seems that the company is waiting to part ways with its 100 million users in the US until it's forced to do so.
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