Monday, 28 Sep 2020

Trump orders ByteDance to sell TikTok's US assets within 90 days

WASHINGTON (BLOOMBERG) – US President Donald Trump on Friday (Aug 14) ordered the Chinese owner of the popular music video app TikTok to sell its US assets within 90 days, citing national security concerns and delivering the latest salvo in his standoff with Beijing.

Mr Trump’s decision came after an investigation by the Committee on Foreign Investment in the US, which reviews acquisitions of American businesses by overseas investors. ByteDance Ltd. bought the app in 2017 and merged it with TikTok.

Mr Trump said in the order released on Friday night, which has a 90-day deadline, that ByteDance “might take action that threatens to impair the national security of the United States”.

Treasury Secretary Steven Mnuchin said in a statement that “Cfius conducted an exhaustive review of the case and unanimously recommended this action to the president in order to protect US users from exploitation of their personal data”.

The panel, which is led by the Treasury secretary, includes officials from across 16 government departments and agencies, including State, Defence and Commerce. The White House referred questions to the Treasury Department.

“As we’ve said previously, TikTok is loved by 100 million Americans because it is their home for entertainment, self-expression, and connection,” TikTok said in a statement.

“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.”

Earlier in August, Mr Trump signed an order threatening penalties on any US resident or company that conducts transactions with TikTok. That order would take effect 45 days after signing, and could prompt a sale before the deadline in Friday night’s order.

Microsoft Corp. is exploring an acquisition of TikTok’s US operations and it’s possible that other potential buyers could come forward, sparking a potential bidding war for the assets.

Microsoft said it did not have an immediate comment.

Microsoft’s industry peers – Facebook Inc., Apple Inc., Inc. and Alphabet Inc. – fit the profile of potential suitors, though all are under antitrust scrutiny from US regulators, which would likely complicate a deal.

A divestiture also could prove technically challenging since it would require rewriting the codes and algorithms that underlie the platform.

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