Nov 10, 2020 - Politics & Policy

TikTok remains in jeopardy

Animated illustration of text-in-progress ellipsis made up of periods stylized like the TikTok logo.

Illustration: Aïda Amer/Axios

TikTok could be banned in the U.S. after this Thursday, although it remains unclear whether the Trump administration will follow through or if a judge will intervene.

Why it matters: The short-video entertainment and social networking app is estimated to have around 100 million U.S. users and more than 1,500 U.S. employees.

No, you're not experiencing déjà vu.

President Trump originally ordered a ban on new downloads of TikTok to take effect on Sept. 30, with the service to be shuttered on Nov. 12 unless it was purchased by a U.S. entity.

  • A federal judge granted an injunction against the download ban just hours before it was set to take effect, and a different federal judge later granted an injunction against the Nov. 12 shutdown.

But, but, but: The Committee on Foreign Investment in the U.S. (CFIUS) also set a Nov. 12 deadline for when ByteDance, TikTok's Chinese parent company, must unwind a 2018 acquisition that effectively created TikTok.

  • CFIUS has the ability to extend the deadline by 30 days, but has not yet done so.
  • CFIUS and ByteDance continue to negotiate over an arrangement whereby a group of U.S. entities — including venture capital firms, Oracle and Walmart — would hold a majority stake in TikTok, but no final deal has been struck.

If an extension is not granted and no deal is agreed upon, the Justice Department "is authorized to take any steps necessary" to enforce the CFIUS order. It remains unclear if ByteDance would risk legal action by keeping TikTok operational, or how fast a court might act in response to a DOJ request.

  • A Treasury Department spokesperson declined to comment on what DOJ would do if Thursday's deadline passes.

What's new: TikTok on Tuesday asked a federal judge to intervene. In a statement, the company said:

"For a year, TikTok has actively engaged with CFIUS in good faith to address its national security concerns, even as we disagree with its assessment. In the nearly two months since the President gave his preliminary approval to our proposal to satisfy those concerns, we have offered detailed solutions to finalize that agreement – but have received no substantive feedback on our extensive data privacy and security framework.

Our thought bubble: Just because TikTok is two-for-two so far in requesting injunctions does not necessarily mean it will succeed again. Those earlier cases related to Trump's executive orders, which were sloppily written — overcoming CFIUS, which is designed to protect national security, is a higher legal bar.

The bottom line: Even if President-elect Biden's administration plans to reverse Trump's executive order and the existing CFIUS ruling, those moves would not come before the current deadlines.

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