The Biden administration is backtracking on former President Donald Trump’s attempts to ban the popular video app TikTok, asking a judge to postpone a legal dispute over the proposed ban while the government begins a broader review of national security threats. raised by Chinese technology companies.
A court filing on Wednesday said the U.S. Department of Commerce is reviewing whether Trump’s claims about TikTok’s threat to national security justified attempts to ban it from smartphone app stores and deny him vital technical services. .
On the other hand, the Biden administration has shelved “indefinitely” a proposed acquisition of TikTok by the United States, according to a report by the Wall Street Journal.. Last year, the Trump administration brokered a deal that would have seen US corporations Oracle and Walmart take a large stake in the Chinese-owned app on national security grounds.
The unusual arrangement grew out of an executive order by Trump that aimed to ban TikTok in the US unless it agreed to a greater degree of American control.
White House press secretary Jen Psaki did not deny the Journal’s report, but said Wednesday that the Biden administration has not taken a “new proactive step” in the process.
Psaki added that Biden’s management is comprehensively assessing the risks to US data, including those related to TikTok. A review of TikTok by the Committee on Foreign Investment in the United States is underway, which considers the national security implications of such investments, Psaki said. She did not offer a timeline for that process.
Trump targeted TikTok over the summer with a series of executive orders citing concerns about the US data TikTok collects from its users. But the courts temporarily blocked the White House ban attempt, and the presidential election soon overshadowed the TikTok fight.
While President Joe Biden has said that TikTok is a concern, his administration has not said whether it will continue to try to ban TikTok or force a sale. Biden has so far taken a cautious approach to inherit Trump’s policies in China and has not promised to reduce or cancel tariffs and other combative measures.
The Biden administration appears to be creating a clearer set of criteria to assess which Chinese technology platforms pose a legitimate security risk to Americans, said Samm Sacks, a China expert at Yale Law School.
“I don’t think they see TikTok itself as a high priority topic,” he said, calling it a hypothetical future threat. “This one-time ban on a rotating cast of Chinese tech companies is unlikely to continue.”
In September, Trump gave his tentative blessing to a proposal by TikTok’s Chinese owner ByteDance that would form a new US branch of TikTok in partnership with Oracle and Walmart, who would make significant investments in the new company. The agreement was intended to hand over the management of the application’s US user data to Oracle. However, CFIUS has not completed the required review of the agreement. The government deadline for TikTok to sell its US operations has passed.
TikTok is now looking to the US Court of Appeals for the District of Columbia Circuit to review Trump’s divestment order and the government’s national security review.
TikTok and Oracle did not respond to requests for comment on Wednesday. Walmart declined to comment Wednesday and referred questions to Biden’s management.
The Treasury Department, which chairs the CFIUS agency that reviews the TikTok deal, did not respond to a request for comment. Neither the Commerce Department, which last year had tried to enforce Trump’s orders, nor the Justice Department, which is handling the court challenges.
The Chinese government’s stance towards the deal is unclear. In September, state media criticized the proposal as US harassment and extortion.
Trump cited concerns that the Chinese government could spy on TikTok users if the app remains under Chinese ownership. TikTok has denied that it is a security threat, but said it was still trying to work with the US government to resolve its concerns.
TikTok said Oracle and Walmart could acquire up to a combined 20% stake in the new company ahead of an initial public offering of TikTok, which Walmart said could happen within the next year. Oracle’s stake would be 12.5% and Walmart’s 7.5%.
Where Oracle was located to handle data management, Walmart said it would provide e-commerce, fulfillment, payments and other services to the new company. TikTok said in a November court filing that the new entity, owned by Oracle, Walmart, and existing US investors in ByteDance, would be responsible for the moderation of content and data from TikTok users in the US.
The Trump administration’s aggressive tactics were part of a broader effort to counter China’s influence. During his tenure, Trump waged a trade war with China, blocked mergers involving Chinese companies and stifled the businesses of Chinese companies such as Huawei, a maker of telecommunications and telephones.
The Biden administration shares many of the Trump administration’s concerns about Chinese technology and business practices, but they are likely to use “different tactics and tones on how to achieve those strategic goals,” said Martijn Rasser, principal investigator at the Center for a New. American Security.
“They are taking a holistic and strategic approach to these problems and are not going after these companies in isolation,” he said. “It is part of a larger reassessment.”