The Biden government is stepping back from 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 the national security threats presented. by Chinese technology companies.
A lawsuit on Wednesday said the U.S. Department of Commerce is considering whether Trump’s claims about TikTok’s threat to national security justify attempts to ban it from smartphone app stores and deny it vital technical services. .
Separately, the Biden government “indefinitely” shelved a proposed acquisition of TikTok by the United States, according to a report by the Wall Street Journal. Last year, the Trump administration brokered an agreement that would see American companies Oracle and Walmart take a large stake in the Chinese-owned application for national security reasons.
The unusual arrangement resulted from an executive order from Trump that aimed to ban TikTok in the United States, unless he accepted a greater degree of American control.
White House press secretary Jen Psaki did not deny the Journal’s report, but said on Wednesday that the Biden administration has not taken a “new proactive step” in the process.
Psaki added that the Biden administration is comprehensively assessing the risks to US data, including those involving TikTok. A review of TikTok by the United States Foreign Investment Committee, which considers the national security implications of such investments, is underway, said Psaki. She did not offer a timetable for this process.
Trump directed TikTok over the summer with a series of executive orders that cited concerns about U.S. data that TikTok collects from its users. But the courts temporarily blocked the White House’s attempt to ban it, and the presidential election soon eclipsed the TikTok struggle.
Although President Joe Biden said that TikTok is a concern, his government 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 government appears to be creating a clearer set of criteria for assessing which Chinese technology platforms pose a legitimate security risk for Americans, said Samm Sacks, a China expert at Yale Law School.
“I don’t think they see TikTok itself as a high priority issue,” she said, calling it a hypothetical future threat. “This one-off ban on a rotating cast of Chinese technology companies should not continue.”
In September, Trump gave his provisional approval to a proposal by TikTok’s Chinese owner, ByteDance, which would form a new American arm of TikTok in partnership with Oracle and Walmart, which would make significant investments in the new company. The agreement aimed to hand over management of the US user data of the application to Oracle. CFIUS, however, has not completed the necessary revision of the agreement. The government’s deadline for TikTok to sell its operations in the United States has passed.
TikTok is now looking to the U.S. 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 return requests for comment on Wednesday. Walmart declined to comment on Wednesday and referred questions to the Biden government.
The Treasury Department, which chairs the CFIUS agency that reviews TikTok’s business, did not respond to a request for comment. Neither the Department of Commerce, which last year had sought to enforce Trump’s orders, nor the Department of Justice, which is handling legal disputes.
The Chinese government’s position on the deal is unclear. State media in September criticized the proposal as U.S. intimidation and extortion.
Trump cited concerns that the Chinese government might spy on TikTok users if the app remains under Chinese ownership. TikTok has denied that it is a security threat, but said it is still trying to work with the U.S. government to address its concerns.
TikTok said Oracle and Walmart could acquire up to a combined 20% stake in the new company before an initial public offering of TikTok, which Walmart said could happen next year. Oracle’s share would be 12.5% and Walmart’s would be 7.5%.
Where Oracle positioned itself to handle data management, Walmart said it would provide e-commerce, customer service, payments and other services for the new company. TikTok said in a November lawsuit that the new entity, owned by Oracle, Walmart and ByteDance’s existing US investors, would be responsible for TikTok’s user data and content moderation in the United States.
The Trump administration’s aggressive tactics were part of a broader effort to contain China’s influence. During his tenure, Trump waged a trade war with China, blocked mergers involving Chinese companies, and stifled the business of Chinese companies like Huawei, a maker of phones and telecommunications equipment.
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 tone about how to achieve these strategic goals,” said Martijn Rasser, senior researcher at the Center for New American Security.
“They are taking a holistic and strategic approach to these issues and they are not pursuing these companies just once,” he said. “It is part of a broader reassessment.”