Under the pretence of national security concerns and delivering the new salvo in his standoff with Beijing, American President Donald Trump on Friday ordered TikTok’s Parent Company to sale all its US assets.
The decision Trump took after the inquiry of the Committee on Foreign Investment in the US, which look back on the acquisitions of American business by overseas investors for national security concerns. In 2017, ByteDance Ltd. purchased the Musical.ly app which is now known as TikTok.
The ordered released on Friday by Trump has 90-days deadline that ByteDance “might take such measures that threaten to undermine US’s national security.”
Treasury Secretary Stevan Mnuchin stated,
“Cfius has a comprehensive investigation of the case. And recommended this action to the president to protect U.S. users from the exploitation of their data”.
Besides the departments of Defense, State, and Commerce, 16 other government agencies and department involved in the investigation committee which is led by Treasury. Because White House referred questions to the Treasury department.
“Their app is liked by millions of Americans because it is for their entertainment, self-expression, and connection. We’re committed to continuing to bring joy to families and meaningful careers to those who create on our platform for many years to come.”
Trump’s order give a deadline of 90-days to TikTok’s Parent Company, ByteDance to sale all of its US assets. But it seems that the app owners may have to act more quickly.
Another Trump’s order released last week which would prohibit American companies from doing work with TikTok effective 45-days from the August 6 signing date.
The orders and another one on August 6 which singled out Chinese Tencent Holdings Ltd.’s app WeChat, are consistent with the growing aggressive posture of the administration toward Chinese tech companies as relations with the Beijing government get worse and Trump may face a tough re-election campaign.
Like the State Department imposed visa constraints on Huawei Tech Corporation in July. And abuses human rights of the Chinese Communist Party, Muslims and other minorities.
The US has asserted that the Chinese government could use Huawei technology to spy on Americans. However, the tech giant repeatedly said that it is independent of government.
Microsoft Corp. is interested in buying TikTok’s U.S assets. However, it is also possible that other potential buyers come forward that could spark a potential bidding war for the assets.
While Microsoft declared it did not have an immediate comment.
The counterparts of Microsoft such as Facebook, Apple, Amazon, and Alphabet meet the profile of potential candidates. Though all are under antitrust scrutiny from U.S. regulators, which would likely make the deal complicated.
Any divestiture could turn to technical challenging as it would require to rewrite the algorithms and codes that underpin the platform.
Moreover, a spokesperson said in a statement on Friday, TikTok has hired about 1,000 US people this year. And had planned to appoint thousand more but now they had to stop.
The company goose an awkward situation for the president when some users tried to disrupt his campaign rally in Tulsa, Oklahoma, by registering for thousands of seats at the event in June. Trump had to speak to a few thousand people because a large arena was empty.