Byte Dance, the Chinese owner of the TikTok app, had agreed with the Trump administration to sell its U.S. operations to avoid its ban, after being accused of putting national security at risk due to its strong ties to the Chinese Communist Party (CCP), its military, and its intelligence system. With Biden’s arrival at the White House, ByteDance scrapped its sale plans.
According to a new report published by Fox News, Beijing-based tech giant ByteDance shelved its proposed deal with U.S. firms Oracle and Walmart now that former President Donald Trump is out of office.
It was the Trump administration that threatened TikTok with a ban on its U.S. operations, due to its strong ties to the CCP, should its operations not be sold to one or more American firms.
ByteDance decides to cancel sale of TikTok
Trump’s departure and assumptions about new President Joe Biden having a friendly demeanor toward the CCP led ByteDance to cancel its sale negotiations.
“The deal was mainly designed to entertain demands from the Trump administration,” an unnamed source who was briefed on the situation told the South China Morning Post. “But Trump is gone, and the raison d’être of the deal is gone with him.”
ByteDance’s decision came after U.S. federal courts blocked the Trump administration’s order that would effectively ban TikTok from operating in the United States should it not sell its shares to a local firm.
In a court filing Thursday, TikTok and the Justice Department asked that the app’s lawsuit challenging the order be put on hold so that the Biden administration could review whether the attempted ban was still justified.
As reported by the South China Morning Post, the Chinese Communist Party has set new trading guidelines, and would intervene in any sales deals the firm makes in the United States.
“The Chinese government has no intention of intervening in trade details, such as whether the price should be a little higher or a little lower, but there are principles,” said the regulatory source, who declined to be named because he is not authorized to speak to the media.
China’s Ministry of Commerce updated its export control regulations at the end of August 2020, saying exports of algorithms will be subject to regulatory approval.
The Biden administration did not yet express an opinion on TikTok, but also did not offer its support for the Trump administration’s decision to ban the app if it was not sold, which was surely seen by the Chinese company as a sufficient gesture of approval to cancel its sales operations.
Initially, last week the U.S. Department of Justice filed motions in two federal courts asking them to delay litigation over TikTok and WeChat, another Chinese app in dispute.