Business News Digital Legal
By Chris Cooke | Published on Friday 11 June 2021
Remember that time Donald Trump banned TikTok? That was fun, wasn’t it? What topsy-turvy times those were. Well, Joe Biden has finally got round to lifting the ban. Although foreign-owned data-hungry apps like, say, TikTok will still be subject to extra scrutiny Stateside.
While still going through the motions as America’s supposed President, Trump issued two executive orders against TikTok and its Chinese owner Bytedance last August. The first banned US citizens and businesses from transacting with the company, the second ordered the TikTok owner to divest its American assets. Both orders were based on concerns that, because Bytedance is a Chinese company, the Chinese government has access to TikTok’s global audience and user-data.
Both executive orders came into force last year, but TikTok remains Chinese owned and continues to operate in the US unhindered. That was partly due to legal action, by both Bytedance itself and some TikTok users. Trump’s executive orders used powers granted to the President by America’s International Emergency Economic Powers Act, but Bytedance and the TikTokkers pointed out that that act has limitations when it comes to “personal communications” or the sharing of “informational materials”.
On that basis, they argued that Trump’s orders were an overreach of the President’s powers under the IEEPA. Judges reckoned those arguments had merit so temporarily paused the TikTok ban. Team Trump appealed those rulings, but when Joe Biden took over the presidency he asked the courts to halt the legal proceedings while his team reviewed his predecessor’s orders.
Concurrent to that, Bytedance said that it was looking into bringing US investors into the TikTok business. There was talk for a time of a complete sell off of TikTok within the US, though in the end the proposal was that American companies Oracle and Walmart become shareholders, and that they take responsibility for ensuring that the TikTok app was being super responsible with all the user-data it gathers. That proposal then went to the White House to see if it would address Team Trump’s concerns.
Given that some reckoned Trump’s executive orders against TikTok – and other big Chinese apps like the Tencent-owned WeChat – were mainly about ramping up the anti-China rhetoric in the run up to last year’s presidential election, it was thought that Bytedance et al would have an easier time once Biden was in charge.
Although, concerns about popular China-owned apps being used within the US – and to what extent the Chinese government has control over content on those apps and access to data gathered by them – have been expressed on all sides of the political spectrum in Washington. And while a new executive order issued by Biden on Wednesday cancels Trump’s TikTok and WeChat bans, it also puts in place a new security review that will now be applied to both apps.
Biden’s new order states: “The increased use in the United States of certain connected software applications designed, developed, manufactured, or supplied by persons owned or controlled by, or subject to the jurisdiction or direction of, a foreign adversary [like China] continues to threaten the national security, foreign policy, and economy of the United States”.
Therefore, it adds, “the federal government should evaluate these threats through rigorous, evidence-based analysis and should address any unacceptable or undue risks consistent with overall national security, foreign policy, and economic objectives, including the preservation and demonstration of America’s core values and fundamental freedoms”.
Government sources told the Washington Post that Team Biden want a more “robust” system for reviewing the risks posed by apps owned by Chinese companies, which also takes into account the concerns expressed in the US courts about Trump’s executive orders.
That review, to be led by the country’s Commerce Department, could still result in challenges for TikTok et al, though possibly extra obligations and requirements to protect the data of American users, rather than an all out ban.
Bytedance is yet to comment on the new executive order, but the cancelling of the TikTok ban was welcomed by the American Civil Liberties Union, which argued that Trump’s orders violated the free speech rights of American TikTok and WeChat users under the US First Amendment.
The Union’s Ashley Gorski told reporters: “President Biden is right to revoke these Trump administration executive orders, which blatantly violated the First Amendment rights of TikTok and WeChat users in the United States. The Commerce Department’s review of these and other apps must not take us down the same misguided path, by serving as a smokescreen for future bans or other unlawful actions”.
Wednesday’s executive order doesn’t actually affect Trump’s separate order that Bytedance offload its US assets. The Chinese company’s previous proposals regarding a deal involving Oracle and Walmart went to the Committee On Foreign Investment In The United States for consideration, and that considering is still seemingly ongoing.