The Trump administration backed away from its threat to ban viral video-sharing app TikTok in the US as controversy raged through the court system and a proposed sale hung in the balance.
For months, the app’s Chinese owner, ByteDance Ltd., has grappled with the prospect of a US ban starting Thursday. But a judge blocked the bans from going into effect. The Commerce Department said Thursday that it would temporarily comply with those court rulings, even if the government appeals.
The Commerce Department said in a document published in the Federal Register that the TikTok ban “has gone into effect and will not be in effect pending further legal development.”
Separately, ByteDance challenged the US Treasury Department’s order to sell TikTok or face unspecified penalties. On Thursday, the US Court of Appeals in Washington gave ByteDance and the Trump administration December 14 and December 28 deadlines to file documents in the case.
Filing the petition Tuesday, TikTok said the government had yet to respond to its recent efforts to compromise and block forced sales. It’s unclear if anything has extended the deadline since then, but the court order suggests no new arrangements.
ByteDance had sought US approval to sell a stake in the app to Oracle Corp and Walmart Inc before a November 12 deadline. But the deal appears to be in limbo. Before filing a petition in Washington this week, ByteDance asked the Committee on Foreign Investment in the United States, or Cfius, which is overseen by the Treasury Department, to extend it for 30 days to continue efforts to find a solution. The request went unanswered, according to court documents.
TikTok attorneys and Treasury officials did not respond to requests for comment.Trump has made the fight against TikTok a central front in a broader effort to end the Chinese tech industry’s influence in the United States with an American company.
He hasn’t said anything about TikTok since the election, focusing instead on trying to discredit results that show he lost. But on Thursday, Trump issued an executive order banning US investment in Chinese companies determined to be owned or controlled by the country’s military.
In September, a Washington judge blocked part of a new download ban on the app. On October 30, a Pennsylvania judge issued a temporary injunction barring third-party companies from providing the online infrastructure that allows TikTok to run smoothly. The United States appealed Washington’s ruling in October and said Thursday it would appeal Pennsylvania’s ruling.
The status of Cifius’ sales process is less clear. Aimen Mir, a partner at Freshfields Bruckhaus Deringer and a former assistant deputy minister for investment security at the Treasury, said the government could exercise discretion over the timing of the execution if it reached an agreement with the company, where he reviewed Cifius.
“Usually when Cfius is silent for a long time it shows that there is no clear consensus within government on what to do next, but this has been an outlier for some time now,” said Mill.
If an extension has not been granted, Mill said the Justice Department will have to go to court to seek enforcement of the divestment order. Trump’s August executive order did not specify penalties for failing to divest, but said “the attorney general has the authority to take any action necessary to enforce the order.”
TikTok is one of the most popular apps in the world, with over 100 million users in the US, and ByteDance’s largest service outside of China. The company and its investors are desperate to close a deal to avoid being banned from a valuable market for other social media apps like Facebook Inc.’s Instagram and Snap Inc.’s Snapchat.
Trump threatened to ban TikTok and ordered it to be sold to a US company on national security grounds. The United States is concerned that the Chinese government could use the app to obtain personal data from US citizens.
Cifius, a Treasury Department panel that reviews foreign takeovers of US companies, said in a July 30 letter that ByteDance’s security concerns included in court papers in Washington this week were based on classified and unclassified information. The letter cited ByteDance’s Chinese subsidiary’s move in 2017 to establish a Communist Party committee in its governance structure.
