Aug 15, 2020 - Technology

Trump tightens screws on ByteDance to sell Tiktok

Illustration of someone cutting a tag off of TikTok
Illustration: Aïda Amer/Axios

President Trump added more pressure Friday night on China-based TikTok parent ByteDance to exit the U.S., ordering it to divest all assets related to the U.S. operation of TikTok within 90 days.

Between the lines: The order means ByteDance must be wholly disentangled from TikTok in the U.S. by November. Trump had previously ordered TikTok banned if ByteDance hadn't struck a deal within 45 days. The new order likely means ByteDance has just another 45 days after that to fully close the deal, one White House source told Axios.

Details: Under the order, ByteDance has to divest Musical.ly, the U.S.-based karaoke app it bought and merged with existing assets in 2018 to create TikTok in its present form, as well as all assets that support the U.S. operation of TikTok.

  • The company also must also destroy any copies of data it collected via TikTok.
  • The order follows a unanimous recommendation from the Treasury Department-led Committee on Foreign Investment in the United States (CFIUS), Treasury Secretary Steven Mnuchin said in a statement.
  • CFIUS had been reviewing the Musical.ly deal for possible national security concerns.

Context: Microsoft has been in talks as a potential buyer in a TikTok sale. The latest order is unlikely to affect those negotiations beyond putting all parties in an additional time crunch.

What they're saying: "There is credible evidence that leads me to believe that ByteDance ... might take action that threatens to impair the national security of the United States," Trump wrote in Friday's order.

  • China hawks maintain that Beijing could force ByteDance to hand over Americans' data collected through TikTok, though there's no evidence it has done so to date.
  • TikTok maintains that it does not store any U.S. user data in China.

Be smart: Unwinding the Musical.ly deal was widely expected to be the process for effectively forcing ByteDance out of the U.S. should the CFIUS make that recommendation, until Trump inserted himself more directly into the process.

  • Sources have told Axios that CFIUS has grown less willing to enact measures to greenlight Chinese investment with conditions to mitigate risks and that a divestiture order was likely.

The big picture: TikTok, which has been working on boosting its D.C. presence since last year, has been appealing to Congress to explain how its business in the U.S. works and has said it is exploring legal options to fight Trump's ban threat.

Go deeper