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Deadline Passes for TikTok Forced Sale With No Deal in Sight

By Gary Symons

TLL Editor in Chief

TikTok owner ByteDance has blown by the deadline set by US President Donald Trump to sell the company to a US buyer, but US officials say they are not enforcing the executive order.

US officials also say they will not extend the Dec. 4 deadline for TikTok’s parent company to sell off the rapidly growing social media app, but CNN and Bloomberg have both reported the Treasury Department does not currently plan to take action against ByteDance. ByteDance and its subsidiary have been negotiating a deal with the United States aimed at trying to resolve concerns that the app poses a security risk to the United States and other Western nations.

ByteDance proposed bringing in US partners like Walmart and Oracle, and in fact, Oracle currently owns 12.5 per cent of TikTok, and controls the company’s servers in the United States.

The Treasury Department said in a statement that it is “engaging with ByteDance to complete the divestment and other steps necessary to resolve the national security risks arising from the transaction, consistent with the President’s August 14 Order.”

CNN has quoted an unnamed source close to the talks as saying the negotiations have led to significant progress, and there are only a few remaining issues to resolve between TikTok and US officials.

ByteDance has said its proposed solution would bring in American investors, and would put American companies in charge of data and content moderation for all of the app’s users in the US, which was a core demand by the Committee on Foreign Investment.

While Treasury officials seem to indicate a deal is close, the negotiations are complicated by China’s opposition to a foreign takeover of TikTok, one of the most successful companies in the country. With tight control over industry, China would have to agree to any deal with US firms, and in past months Chinese state media have spoken out against Trump’s executive order, and accused the US of illegal ‘bullying’ of a private company.

TikTok has also filed multiple challenges against the ban which are still before the courts, with deadlines in certain proceedings extending past the inauguration of President-elect Joe Biden in January. Several judges have agreed with TikTok and have blocked the ban from going into effect. The Commerce Department has conceded it will comply with those court rulings as the government appeals, so the lack of enforcement on the TikTok deadline may have more to do with legal constraints than with the state of the negotiations.

What is at stake for ByteDance is ownership of the seventh largest social media network in the world; a network that is also growing faster than any of its rivals, and that generated $17 billion in 2019.

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