A last-minute reprieve in a U.S. court is casting even more confusion on any potential deal involving some form of American takeover of the TikTok social media platform, originally created by Chinese entrepreneur Zhang Yiming.
For months now, the Trump team has been talking about banning TikTok in America because of concerns about national security, since it’s argued that the Chinese government could obtain platform data on U.S. citizens. Exactly how this is different from any number of other multinational social media platform operations has been rarely explained.
As the end of September approached, and the White House prepared to start a TikTok ban, Judge Carl Nichols of the U.S. District Court in Washington, D.C. ruled Sept. 27 that a ban right now would be improper, based on the status of the proposed deal and other factors.
“How does it make sense to impose this app store ban tonight when there are negotiations under way that might make it unnecessary?” said one of TikTok’s lawyers, John Hall, in court according to reporting from David Shephardson for Reuters. “This is just punitive. This is just a blunt way to whack the company. … There is simply no urgency here.”
“TikTok said it was pleased with the injunction and added it would maintain its ‘ongoing dialogue with the government to turn our proposal, which the president gave his preliminary approval to last week, into an agreement.’” Shepardson also reports.
The U.S. Department of Commerce now says they’ve set a new ban deadline for November 12.
The narrative on TikTok being “taken over” by American interests has changed over time.
First, we were told that it would be Microsoft or Oracle that would partner with other interests to acquire TikTok, which is currently owned by Bytedance, a company deemed by the POTUS and others to be ‘too Chinese’ for America’s confidence.
The current plan as it is being reported calls for some ownership stake by Oracle and Walmart, as the ubiquitous American big box retailer chain continues to evolve its online operations.
More recently, we saw indications that Bytedance was suggesting it keep its source code in surrendering U.S. operations. Wall Street Journal coverage shows that Walmart and Oracle might also only take a 20% stake in the company.
However, it’s not a done deal, as they say, and the court’s decision simply means that the U.S. government can’t force American platforms to purge TikTok from their app stores yet.
Interestingly enough, Wall Street Journal also reports that three American TikTok video creators also went to court to stop the ban, but that their effort was rejected by the courts.
Notably. TikTok is only one target of several U.S. blacklisting operations against Chinese-owned companies. The U.S. administration continues to seek a similar ban on TenCent’s WeChat platform, and has been trying to exercise products from China’s Huawei from the U.S. supply chain.
How will all of this play out? That’s not entirely clear yet. Pay attention to these changes, because they will have big impact on tech markets in multiple significant ways.
