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China would rather see U.S. TikTok ban than stiff-armed sale

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More than 100 million users in the U.S. hold accounts on the popular social media platform, TikTok.  But that could come to an end this month if a deal is not inked between a U.S. company and the app’s owners, China-based company, ByteDance.

The TikTok logo is displayed outside a TikTok office on August 27, 2020 in Culver City, California. The Chinese-owned company is reportedly set to announce the sale of U.S. operations of its popular social media app in the coming weeks following threats of a shutdown by the Trump administration. (Photo by Mario Tama/Getty Images)

The Chinese company would reportedly prefer to see the short video app shut down in the United States, three people with direct knowledge of the matter said on Friday, according to CNBC

ByteDance has been in talks to sell TikTok’s U.S. operations to potential buyers including Microsoft and Oracle. That came last month after U.S. President Donald Trump threatened to ban the app if it was not sold.

Read More: TikTok sues Trump over his pending order to ban its app

Trump gave ByteDance a deadline of mid-September to finalize a deal.

Chinese officials believe a forced sale would make both ByteDance and China appear weak as pressure from Washington builds, the sources said.

ByteDance said in a statement to Reuters that the Chinese government had never suggested that it should shut down TikTok in the United States or in any other markets.

Two of the sources said China was willing to use revisions it made to a technology exports list on Aug. 28 to delay any deal reached by ByteDance, if it had to.

Zhao Lijian, a Chinese foreign ministry spokesman said on Friday that the United States is abusing the concept of national security. He asked that the U.S. government stop oppressing foreign companies.

Reuters reported that TikTok’s prospective buyers are looking at four ways to structure an acquisition from ByteDance.

Within these, ByteDance could still push ahead with a sale of TikTok’s U.S. assets without approval from China’s commerce ministry by selling them without key algorithms.

Read More: Twitter and TikTok explore merger as Trump ban looms

U.S. officials have criticised the app’s security and privacy, suggesting that user data might be shared with Beijing. TikTok has said it would not comply with any request to share user data with the Chinese authorities.

Beijing has said it firmly opposes Trump’s executive orders and on Aug. 28 moved to give itself a say in the process, revising a list of technologies that will need Chinese government approval before they are exported. Experts said TikTok’s recommendation algorithm would fall under this list.

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