Whats Going On With Trumps TikTok Ban and Microsofts Deal to Avoid It? – New York Magazine

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On Friday night, President Trump told reporters aboard Air Force One that he was banning the mega-popular video-sharing app TikTok in the U.S. something he and White House officials had been threatening to do for weeks over concerns about how the Chinese-owned company collected and handled American user data. Said Trump, who says a lot of things, As far as TikTok is concerned, were banning them from the United States, adding that, I have that authority, and that, Its going to be signed tomorrow.

Trump also weighed in somewhat confusingly on a developing (seemingly White House-backed) deal aimed at avoiding the ban between ByteDance, the Chinese internet company which owns the app, and Microsoft. [Its] not the deal that you have been hearing about, Trump continued, that they are going to buy and sell, and this and that and Microsoft and another one. Were not an M&A [mergers and acquisitions] country.

But Trump did not ban TikTok on Saturday; he spent the day golfing and tweeting, and he didnt ban it on Sunday, either. Its still not clear if Trumps announcement was some kind of negotiating tactic, a pure-politics attempt to sound tough on China, or just another impulsive outburst by the pronouncement-prone president. Whatever the reason, the news prompted countless TikTok users to panic, with some issuing tearful goodbyes to their followers and others vowing electoral revenge. Microsoft temporarily paused its efforts to acquire the app amid the mixed signals from the White House. And GOP leaders tried to remind Trump about the art of favoring a deal.

Below is what we know about what has happened so far with the TikTok ban, the Microsoft deal, and what might happen next.

Trump didnt appear to be in any hurry to follow through on his announcement over the weekend, and White House officials have remained vague regarding the possible timing, as well. But with the news on Sunday night that Microsoft was resuming its efforts to buy TikTok, apparently with Trumps approval the risk of a ban seems low, at least for now.

During a Fox News interview on Sunday morning, Secretary of State Mike Pompeo said that the president would take action in the coming days to address national security risks presented by Chinese-owned software companies which may mean Trump will be targeting more than just TikTok.

Its also important to note that there have been bipartisan security concerns over the app, so Trump and his allies arent simply going it alone in this case. On Sunday, Treasury Secretary Steve Mnuchin claimed that everybody agrees [TikTok] cant exist as it does, including both the White House and congressional leaders.

TikTok has an estimated 100 million U.S. users, having enjoyed explosive growth in the past few years to become one of the most-downloaded apps of all time as well as a rare competitor to Facebook and Google. The company has an estimated value of as much as $20-40 billion, according to Bloomberg. Any deal to acquire TikTok would have to be approved by both U.S. foreign investment and anti-trust regulators, and while there may be other companies or investors interested in a deal, Microsoft had seemed to be uniquely positioned to be able to both afford TikTok as well as win U.S. government approval. Then Trump weighed in on Friday night.

On Saturday, Reuters and Bloomberg both reported that ByteDance had offered to divest 100 percent of TikToks U.S. operations in order to avoid the ban, but the Wall Street Journal later reported that Trumps comments led Microsoft to pause its negotiations to buy them:

The presidents statements spurred TikTok to make additional concessions, including agreeing to add as many as 10,000 jobs in the U.S. over the next three years, but it isnt clear if those will alter Mr. Trumps stance, one of the people said. The founder of TikTok parent Bytedance Ltd., Zhang Yiming, also agreed to sell his stake as part of any deal, the person said. Mr. Zhang was going to retain a minority stake under the deal being discussed before Mr. Trumps late Friday remarks, the person said.

The software giantwas in advanced talkswith Bytedance, gaining momentum toward a deal they believed met the White House goal for the popular app to get bought by a U.S. company, the people said. Those plans were interrupted when Mr. Trump told reporters on Air Force One that he preferred to ban the app and wouldnt support a sale.

Treasury officials reportedly told the Committee on Foreign Investment in the U.S. on Friday morning that the ByteDance-Microsoft deal was imminent. The subsequent confusion, according to the Journal, is because some Trump administration officials favor the deal, including Secretary of State Mike Pompeo and Treasury Secretary Steve Mnuchin, while others favor an outright ban, like trade advisor (and anti-China hardliner) Peter Navarro who tried to claim on Saturday night that Microsoft could not be trusted since it already does business with China.

Several Senate Republicans and the head of the U.S. Chamber of Commerce expressed support for the Microsoft deal on Sunday in what appeared to be a concerted effort to save it from the fog of Trump. Then on Sunday night, Microsoft CEO Satya Nadella announced that he had spoken with the president this weekend, assuaged his concerns about the potential deal, and that the company was proceeding in its effort to acquire the app, per the New York Times:

Microsoft said it would pursue the deal over the coming weeks, and expected to complete the discussions no later than Sept. 15. Such a deal would involve purchasing TikTok offices in the United States, Canada, Australia and New Zealand; ByteDance, the parent company of TikTok, would continue to own the social media apps offices in Beijing. Microsoft may also bring on a series of outside investors, which would hold minority stakes in any deal.

The company pledged that if it acquires TikTok, it would make sure all U.S. user data is transferred back to the country and deleted from foreign servers, and said it would bolster the apps security and privacy protections. Microsoft fully appreciates the importance of addressing the Presidents concerns and is committed to acquiring TikTok subject to a complete security review and providing proper economic benefits to the United States, including the United States Treasury, the company said. It also noted that the discussions to buy the app were preliminary.

On the other hand, the South China Morning Post reported on Sunday that ByteDance insiders have come to favor spinning off TikTok as opposed to selling it, but that could just be a negotiating tactic.

For now, it appears that Microsoft is still on the inside track.

Trumps supposed ban has prompted an outpouring of grief, outrage, and attention among the apps users. TikTok videos referencing the ban have clocked more than 380 million views as of Sunday afternoon. Creators have put out emotional goodbyes, announcements to their followers about where else they could be found online post-ban, explanations for supposed methods of getting around the ban, and in some cases, attempts to dissuade Trump by appealing to his vanity:

On Saturday, TikToks U.S. General Manager, Vanessa Pappas, put out a TikTok video letting users know that their concerns had been heard and assuring them that the company expected to continue operating in the U.S. for a long time:

There has been ongoing speculation, on and off of TikTok, that Trump is specifically going after the app as an act of retaliation against its users some of whom prank-reserved tickets to his infamously under-attended Tulsa rally in June, and one of whom has become famous for lip-syncing to the president. While its never a good idea to underestimate how much Trump does anything because of personal animus, there is typically some evidence of such views from the president, who is neither known for his guile nor keeping his feelings to himself.

TikTok has insisted that no one needs to be worried about user data falling into the hands of Chinas government, but as Stratecherys Ben Thompson has noted, the concerns over data sharing are valid:

TikTok data absolutely can be sent to China, and, it is important to note, this would be the case even if [TikToks] privacy policy were not so honest. All Chinese Internet companies are compelled by the countrys National Intelligence Law to turn over any and all data that the government demands, and that power is not limited by Chinas borders. Moreover, this requisition of data is not subject to warrants or courts, as is the case with U.S. government requests for data from Facebook or any other entity; the Chinese government absolutely could be running a learning algorithms in parallel to ByteDances on all TikTok data.

He also argues that allowing China to control such a powerful and influential social media platform could have dire consequences:

[TikTok] censored #BlackLivesMatter and #GeorgeFloyd,blocked a teenagerdiscussing Chinasgenocide in Xinjiang, andblocked a video of Tank Man.The Guardianpublished TikTok guidelines that censored Tiananmen Square, Tibetan independence, and the Falun Gong, andI myself demonstratedthat TikTok appeared to be censoring the Hong Kong protests and Houston Rockets basketball team.

The point, though, is not just censorship, but its inverse: propaganda. TikToks algorithm, unmoored from the constraints of your social network or professional content creators, is free to promote whatever videos it likes, without anyone knowing the difference. TikTok could promote a particular candidate or a particular issue in a particular geography, without anyone except perhaps the candidate, now indebted to a Chinese company knowing. You may be skeptical this might happen, but again, China has already demonstrated a willingness to censor speech on a platform banned in China; how much of a leap is it to think that a Party committed to ideological dominance will forever leave a route directly into the hearts and minds of millions of Americans untouched?

Banning or effectively banning TikTok wouldnt be as easy as the Trump administration claims, but it wouldnt be impossible, either. According to Trump, he could use emergency economic powers or an executive order to implement the ban, and there is some precedent for that kind of strong-arming, as Recodes Shirin Ghaffary has explained:

If whats being reported is true, Trump would issue the order for ByteDance to divest from TikTok through the Committee on Foreign Investment in the United States (CFIUS), an interagency committee that reviews foreign acquisitions and investments in US businesses that can threaten national security. The committee, chaired by Mnuchin, has the power to block or reverse mergers and acquisitions involving US and foreign companies.

Increasingly, the agency has beenexercising its authorityover foreign-owned tech companies operating in the US. Last year, CFIUS helped block one of the biggest deals in tech history, after Trump followed its recommendations to stop Singapore-based Broadcom from acquiringthe US semiconductor company Qualcomm. The committee also forced Chinese owners to divest from thedating app Grindrand the health startupPatientsLikeMe.

As far as an actual ban of the app, that would be far more difficult, if not illegal, according to Adi Robertson at the Verge:

The most intense app bans happen at the network level, blocking any communication between the targeted servers and users in the country. Thats the approach taken by Chinas Great Firewall, and its how India enforces its recently implemented TikTok ban. (Australia, which is considering a similar ban, would likely take the same approach.) But American law doesnt have any precedent for blocking software in that way, so it seems unlikely that the White House would be able to follow through on that kind of heavy-handed network censorship.

Another option would be deplatforming:

To really take TikTok off Americans phones, the government would have to do something like make Apple and Google sever their ties with ByteDance (along with any other Chinese app makers). Getting removed from the iOS App Store and Google Play Store would vastly reduce TikToks appeal, even if you could still access it through a sideloaded app or website. The government would essentially be ordering companies to deplatform TikTok and deplatforming can be extremely powerful.

To do this, the Trump administration could repeat a tactic it used with Huawei: have the Commerce Department put TikTok on theentity listthat limits its commercial ties to US companies. The administration doesnt need congressional approval to do this, and it can cite any US company that does business with them (barring special exemptions) for violating sanctions.

The outcome of the U.S.-TikTok standoff could have far reaching implications. As Shirin Ghaffary has pointed out, a ban or forced sale could jeopardize TikToks success and weaken its ability to challenge U.S. tech giants like Google and Facebook, which are already benefiting from massive monopolies. The entertainment industry impact could also be huge, both for creators and for the businesses that orbit them and everyone got a taste of what that might be like over the weekend, according to the New York Timess Taylor Lorenz:

TikTok is known mostly for dance videos and comedic skits, but that silliness can obscure two facts: TikTok has become a powerhouse in the entertainment industry and the primary platform that music executives and talent agents use to scout the next big act. And, at the same time, especially as the election nears, the app has become an information and organizing hub for Gen Z activists and politically-minded young people.

The loss of TikTok would upend large swaths of the entertainment industry that have just been completely reoriented around the app. TikTok has rewritten the pop charts, becoming a new default for how labels and aspiring artists promote their songs. And TikTok is where major brands like American Eagle, Chipotle and others spend millions to reach the next generation of consumers.

Elsewhere, some critics like Wireds Nicholas Thompson have argued that putting aside the security concerns, banning TikTok would be a big blow to free speech, as well:

If one is an avid believer in free speech, how can one even threaten the death penalty for a social media platforrm? TikTok is full of garbage and sometimes hate. But its free and open,even in waysthat other platforms arent.

For the past several years, Ive warned thatthe biggest threat to the internetis the technological cold war between the reasonably open, free internet of the West, and the closed authoritarian internet of the East. Now, with the Presidents repudiation of free speech and open markets, I worry whether there isnt as much difference between the two sides after all.

And there could be other political consequences. In early July, a Morning Consult survey unsurprisingly found that Republicans and older adults expressed the most support for banning TikTok, while 59 percent of Generation Z respondents opposed it. Furthermore, one in four adult members of Generation Z said they were more inclined to use TikTok after learning the U.S. was considering banning it. In addition, NBC News noted on Saturday that banning TikTok could prompt first-time voters to seek electoral revenge:

The popular app that has 100 million users in the U.S. has proved especially vital to many during the coronavirus pandemic as a source of entertainment, community and education, a half-dozen users told NBC News in interviews Saturday. They said TikTok has helped them both unplug from the harsh realities of the world and plug into communities that make them feel connected. Some said that if Trump does ban the app, it could motivate many young TikTokers to vote against the president in the November election.

If it hasnt already, I think this will definitely be a game-changer in young voters going out and voting for sure, Kaylyn Elkins, 18, of Washington state, said.

The Times captured some like-minded views:

For many kids, politics feel very distant, said Eitan Bernath, 18, who has 1.2 million followers on TikTok. This might be the first time it hits home for a lot of kids.

On Sunday, nine TikTok creators with a collective 54 million followers, including Brittany Broski, Hope Schwing and Mitchell Crawford, published an open letter addressed to Mr. Trump onMedium.

Anecdotal speculation does not equal Election Day effect, of course, but Trump banning the app himself, or even just threatening to, could conceivably boost youth turnout this fall. Whether that possibility becomes a reality remains to be seen, but the Wall Street Journal reported over the weekend that at least some White House officials remain concerned over the potential backlash from a ban.

This post has been updated to include additional analysis and information.

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Whats Going On With Trumps TikTok Ban and Microsofts Deal to Avoid It? - New York Magazine