US flinches hyped TikTok ban; deal extension 'possible'
Published: Nov 13, 2020 02:18 PM

TikTok US Photo: VCG

The US Commerce Department said Thursday that it would abide by a Pennsylvania court order not to shut down Chinese video-sharing app TikTok, initially slated to take effect on Thursday.

"The Department is complying with the terms of this order… pending further legal developments," the Commerce Department said in a federal register.

The department issued restrictions on TikTok in August based on US President Donald Trump's executive order, barring transactions with TikTok, which would make the app, which has over 100 million users in the US market, inoperable.

The restrictions were blocked by a judge in Pennsylvania who issued an injunction at the end of October against the prohibitions of any transaction with TikTok that would take effect on Thursday, after three TikTok content creators won the case, bringing a temporary end to Trump's first executive order targeting TikTok.

"The government's own descriptions of the national security threat posed by the TikTok app are phrased in the hypothetical," Wendy Beetlestone, US District Judge for the Eastern District of Pennsylvania, said in her opinion.

The Commerce Department's action on Thursday has no genuine effect since the court has blocked the order. The announcement is more of an oral one, suggesting certain easing-off amid the changing political landscape, where Trump is so far at a disadvantage against president-elect Joe Biden, a source close to TikTok's owner ByteDance, who asked to remain anonymous, told the Global Times Friday.

The department said on November 1 following Beetlestone's injunction that it would "vigorously defend" its actions.

Prior to the department's move, the US Treasury Department said on Wednesday it wants a resolution of the national security concerns it has raised over ByteDance's acquisition of US social media app, which it then merged into TikTok.

On August 14, Trump issued a second executive order, at the advice of the Committee on Foreign Investment in the United States (CFIUS), that directed ByteDance to divest TikTok within 90 days. That deadline was set to have been on Thursday.

The TikTok saga started months ago when the Trump administration threatened to ban the app citing national security reasons, and TikTok has repeatedly said it has not and will not provide data gathered in the US to the Chinese government. According to the US intelligence agency the CIA, there is no evidence that the Chinese government gained access to TikTok data.

"The weakening attitude from both departments is more likely an explanation to the public saying the TikTok app can still be used by that deadline, but actually they have no time to deal with the case given the current election event," the source close to ByteDance said.

ByteDance said that a fourth proposal submitted last Friday sought to address US security concerns "by creating a new entity, wholly owned by Oracle, Walmart and existing US investors in ByteDance, that would be responsible for handling TikTok's US user data and content moderation."

"It is likely that the CFIUS will make an announcement in the near future and render a 30-day extension for the TikTok deal," said the source.

Separately, the US Department of Justice, however, filed a separate notice in the TikTok case late Thursday, saying it would appeal to the US Third Circuit.

The move is more like a "roaring tiger without teeth," Wang Chao, founder of the Wenyuan Institute for Politics and Economics, a Beijing-based think tank, told the Global Times Friday.

Given the current changing political landscape, in which the Trump campaign is busy filing lawsuits with US states in a bid to reverse the outcome of the election, his presidential executive order has been discounted in terms of implementation, said Wang.

Wang holds a relatively optimistic view toward TikTok's destiny in the US, on the condition that Biden enters the White House and will approve the TikTok deal.

Zhou Xibing, a veteran analyst who closely follows TikTok, said that under Biden, Chinese high-tech firms may have more breathing space instead of facing a further crackdown, given Biden's pragmatic tactic of seeking more business cooperation instead of using extreme measures to add pressure.

However, as long as the second executive order remains, it will hang like a sword over the head of TikTok, industry analysts told the Global Times.

Shen Yi, a professor at the School of International Relations and Public Affairs of Fudan University, said that regardless of who will take the White House, Chinese companies should not make their decisions based on that outcome. "Don't hold any illusions. Calmness and alertness are needed at the moment to prepare for any US moves against Chinese firms."