The Commerce Department announced plans to ban TikTok and WeChat from the American App stores to safeguard the security interests of the country. Users who had previously downloaded WeChat will access the application until September 20, after which the application will shut down.
The announcement fulfils two executive orders banning transactions with TikTok and WeChat.
After Sunday, TikTok users will not have access to the updated app or its maintenance services. However, the government might lift the ban on the short video app if the administration resolves national security concerns towards TikTok by November 12. Currently, Trump’s government is still weighing the acquisition deal between Oracle and TikTok U.S.
A press release from the Department of Commerce also bans the transfer of funds or processing of payments to and from the U.S. through WeChat.
“As of September 20, 2020, the following transactions are prohibited; Any provision of service to distribute or maintain the WeChat or TikTok mobile applications, constituent code, or application updates through an online mobile application store in the U.S. Any provision of services through the WeChat mobile application for the purpose of transferring funds or processing payments within the U.S.”
Tomorrow, the government will also ban hosting and content delivery network services enabling the function of the app. It will also prohibit arranged internet transit or peering services serving the two apps, as well as the utilization of their constituent code.
The full effect of the ban will take effect on September 2020 for WeChat and November 12 for the Bytedance app.
ByteDance Propose TikTok IPO in the US
ByteDance is planning an IPO for TikTok Global, the new company, in the United States if it receives a green light from the U.S. administration. Al Jazeera reports White House and Bytedance already agreed to a term sheet on some aspects of the deal, which Trump is yet to approve.
The new company will have a U.S. chief Executive, a majority of American Directors, and an American security company. Oracle has agreed on a 20% stake in the company, and there is a possibility that Walmart would be a shareholder, with its CEO taking a seat in the TikTok Global board. Combined, Walmart and Oracle could own up to 60% of TikTok U.S.
In the IPO which will come in about a year from now, ByteDance will reduce its stake in the company in line with Trump’s earlier demands. Reuters reports that Chinese officials are opposed to the forced sale, and the company requested to retain majority ownership.
Reports show that China has launched mechanisms to allow the country to restrict foreign entities on grounds of national security and sovereignty in retaliation to actions against Huawei, and TikTok among other Chinese companies.
On Saturday, Chinese Ministry of Commerce condemned the TikTok and WeChat ban, referring to U.S’ actions as bullying and wrongful. The ministry, in a statement warned that, “If the US insists on going its own way, China will take necessary measures to resolutely safeguard the legitimate rights and interests of Chinese companies.”
