In the WeChat, TikTok U.S. shut down order, TikTok gets Nov 12 stay, keeping it up through the US election and Oracle dealmaking
The U.S. Commerce Department has now announced the details of how it will enforce the shutdown of TikTok and WeChat in the country, after announcing in August plans to do so by September 20 over national security concerns. The news is structured along two dates, September 20 and November 12. Both apps and their app updates will no longer be distributed in U.S. app stores as of September 20. But TikTok specifically gets an extension on how it operates until November 12.
That not only keeps its up until after the November 3 U.S. election, but leaves the door open for it to complete a complicated deal with Oracle and partners take control of its U.S. operations without an interruption in service.
That timing, plus the statement from the Department of Commerce Secretary Wilbur Ross, underscore the strong political current running through the news.
Today's actions prove once again that President Trump will do everything in his power to guarantee our national security and protect Americans from the threats of the Chinese Communist Party," said Ross in a statement. At the President's direction, we have taken significant action to combat China's malicious collection of American citizens' personal data, while promoting our national values, democratic rules-based norms, and aggressive enforcement of U.S. laws and regulations."
The first part of the action, starting September 20, has to do with halting all new app distribution for both WeChat (owned by Tencent) and TikTok (owned by ByteDance) . In other words, no new downloads of either app as of September 20, and no new updates. And it also forbids any provision of services through the WeChat mobile application for the purpose of transferring funds or processing payments within the U.S." - that is, all payments.
It seems that this might mean that those that already have TikTok installed by September 20 should still be able to continue using it, even if you're an iPhone user updating to iOS 14. We write might" because the government hasn't provided technical detail around how it plans to implement its rules.
From that date, WeChat also will not, seemingly, work at all, with the U.S. forbidding any provision of internet hosting services enabling the functioning or optimization", any provision of content delivery, internet transit or peering services, or any provision of constituent code, functions or services of the app.
Notably, TikTok will not face the same operational roadblock on September 20.
TikTok has until November 12 before those rules come into play. That is to say, if you have TikTok downloaded by September 20, you will still be able to use it.
The date is important because for a couple of reasons. It firstly leaves the app up and running in the run-up to the U.S. Presidential election. Many have said that Trump shutting down the popular app - which ah now could hurt him with younger voters. Whether or not that really would have been the case, this seems to have knocked that problem out of his re-election calculus.
It secondly leaves the door open for Oracle, Walmart, and the rest in that consortium negotiating to take over the operation of TikTok, to seal their deal without any interruption in service. The app has around 100 million users in the country, similar its number of users in Europe.
The story around the deal has been changing by the day, shifting from an outright acquisition to one where Oracle might control the data in the app but not the source code, to licensing the source code too, to getting China's approval as well as that of the U.S., and other permutations. The most recent developments have included the idea of a public listing of the and even considering Instagram co-founder Kevin Systrom to take it over as the new CEO.
Ironic, then, that one of the more outspoken tech leaders around this latest development has been Adam Mosseri, the current head of Instagram, who has been tweeting his thoughts about the wider implications for other big tech companies.
Careful with this headline, the ban is only of *new downloads* of TikTok, an outright ban will happen on 11/12 unless a deal is made.
I've said this before, but a US TikTok ban would be quite bad for Instagram, Facebook, and the internet more broadly. https://t.co/2tPPgAkI4K
- Adam Mosseri
(@mosseri) September 18, 2020
(Of course, we've been in a tit-for-tat war around apps and freedom to operate them across national boundaries for some time already, and many countries with national firewalls have long decided that there is absolutely nothing wrong with prohibiting some apps from other countries if you feel they compromise your national security.)
The U.S. Department of Commerce decisions are in line with an executive order signed by President Trump on August 6, which put ByteDance and Tencent, the respective owners of TikTok and WeChat, on notice of the government's intention to block access to their products over purported concerns about national security.
That executive order precipitated the last few weeks of feverish dealmaking to avoid a shutdown of TikTok, discussions that remain on-going and are not finalized. As of today, Oracle and what looks like Walmart are still negotiating with the White House, Treasury Department, and ByteDance to come to a deal that will be acceptable to the president. China also has authority to approve a sale of TikTok.
Over the last few weeks, the administration has promoted a policy known as Clean Network" designed to eliminate foreign interference in applications and cloud infrastructure that powers American technology. That policy calls for the removal of certain apps, data sovereignty to onshore American user data to the United States, mobile network infrastructure built from clean" equipment, and a host of other measures to create a clean" computing environment for U.S. citizens. While those policies are generally written broadly, their clear target has been China, based on speeches from administration officials.
TikTok and WeChat are not the only app removals announced overnight. In India, one of the most popular payment apps in the country - Paytm - has been removed from Google's Play Store for repeat policy violations." The app has tens of millions of monthly users. In late June, the country also announced a list of 59 apps developed by Chinese companies that would be banned, including TikTok.
Google pulls India's Paytm app from Play Store for repeat policy violations
Such national fights over the future of technology have increasingly come to a head as tech drives a larger segment of the global economy and increasingly becomes intertwined with competing national interests.