December 5, 2020

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US grants TikTok extension on sale deadline

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The Trump administration has extended a deadline for ByteDance to restructure ownership of its video app TikTok in the US, giving the Chinese company more time to resolve national security concerns raised by Washington.

The Committee on Foreign Investment in the US granted a 15-day extension on Thursday, ByteDance said in a court filing on Friday morning, pushing the deadline to November 27.

The extension is the latest eleventh-hour reprieve for TikTok, which has more than 100m users in the US but whose future in the country has been under threat since the Trump administration raised national security concerns.

The US government has argued that ByteDance could share data on TikTok’s American users with the Chinese authorities, but the company has denied the suggestion.

ByteDance had been facing a November 12 deadline to finalise negotiations with Cfius or divest the US operations of TikTok, under an executive order signed by President Donald Trump.

The Chinese company revealed in a legal filing earlier this week that it had recently proposed restructuring TikTok US as a new entity wholly owned by Oracle, the Silicon Valley tech group; Walmart, the retailer; and ByteDance’s US investors.

ByteDance had asked for 30 more days to finalise a deal, which it claimed was being held up by unresponsiveness from the Trump administration.

Mr Trump previously gave his preliminary approval in September to an agreement that would create a new TikTok Global entity headquartered in the US, with Oracle overseeing the security of American user data.

“In the nearly two months since the president gave his preliminary approval to our proposal to satisfy those concerns, we have offered detailed solutions to finalise that agreement — but have received no substantive feedback on our extensive data privacy and security framework,” TikTok said on Tuesday.

ByteDance and Oracle were still waiting for a clear indication from the Trump administration and Cfius officials on what was needed to get a deal approved, said people briefed about the matter. 

The Chinese company and US investors were unclear about the next steps in the process, said the people, who added that there could be further extensions to the deadline.

Cfius staffers have received minimal guidance from senior officials in the Trump administration on the next steps, as Mr Trump had shifted his focus to the outcome of the presidential election, one of the people said.

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The Treasury said on Wednesday it was focused on reaching a resolution with TikTok and it had “been clear with ByteDance regarding the steps necessary to achieve that resolution”. It did not respond to a request for comment on Friday.

TikTok and its allies have stepped up legal efforts to resist the Trump administration’s pressure, winning injunctions against orders that could have barred downloads of the app and prevented support for users.

The company received a reprieve from commerce department rules that would have effectively banned the app in the US on Thursday. A federal judge in Pennsylvania had granted a preliminary injunction against the ban, siding with three TikTok celebrities who are suing the Trump administration.

Additional reporting by James Politi in Washington




2020-11-13 13:17:07


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