U.S. President Donald Trump today signed two separate executive orders, each of which banned any person or entity within the jurisdiction of United States, to have any transactions with Bytedance or Wechat respectively. What is interesting to note, is that while the order has completely banned Bytedance in entirety and not just TikTok, the same is not true for WeChat, wherein its parent Tencent Holding has not been banned.
The reason for the ban, of course, is that these Chinese companies allegedly violate user privacy terms and send user data to China’s Communist government, which poses a threat to the national security of the U.S. Both the orders take legal authority from the National Emergencies Act and the International Emergency Economic Powers Act.
“The spread in the United States of mobile applications developed and owned by companies in the People’s Republic of China (China) continues to threaten the national security, foreign policy, and economy of the United States,” the president wrote.
The term ‘transaction’ has not been defined very clearly as of now but it is expected that the government will give more clear instructions.
According to the executive order, which will be effective after 45 days from the date of issue of the order, any transactions with WeChat and TikTok-parent Bytedance are banned. Essentially this means, that any company that wants to acquire either of these two has to do so before the deadline of 45 days. That company in present terms, is only Microsoft.
Microsoft is already in advanced stages of negotiations to acquire TikTok. And while the deal earlier was meant only for the U.S., Canada, Australia markets, a new FT report suggests that TikTok’s India business could also be a part of the deal. India recently banned 59 Chinese apps from the country, TikTok being one of them. Prior to the ban, India was TikTok’s largest userbase outside of China. The app is looking to stage a comeback ever since, and changing ownership to a US-based company could be one way of doing that.
With regards to the two executive orders, Trump has publicly spoken about his hatred for China, more so after the way the country has handled COVID-19 pandemic. Trump clearly blames china for the global pandemic and has been clashing with china ever since. That hate, coupled with the fact that TikTok does censor politically sensitive data that may harm China (such as the recent Hong Kong protests), has all boiled down to this executive order.
It is important to note here that, TikTok has over and over again denied all the accusations that it is controlled by or shares data with the Chinese government.
WeChat, owned by Tencent, has a huge user base in China, but in the US it is used mainly by people of Chinese descent. And because of such a user base, it is suspected that the Chinese government uses it to expand its propaganda to the Chinese people in the US.
“Like TikTok, WeChat automatically captures vast swaths of information from its users. This data collection threatens to allow the Chinese Communist Party access to Americans’ personal and proprietary information. ” wrote resident trump. “Besides, the application captures the personal and proprietary information of Chinese nationals visiting the United States, thereby allowing the Chinese Communist Party a mechanism for keeping tabs on Chinese citizens who may be enjoying the benefits of a free society for the first time in their lives,” he added.
It is important to note that, only transactions relating to WeChat will be banned. The parent company, Tencent, which also owns part of several popular mobile games like Fortnite and League of Legends, will not be affected.