Latest Updates on TikTok Sale Negotiations under Trump Administration
- Trump extends TikTok's operational duration within U.S. borders.
Negotiations for TikTok's sale of its US operations have hit a snag due to China's reluctance following Trump's recent tariff surge on Chinese goods [1]. The increased tariffs, now at 54%, have emerged as a considerable roadblock in the negotiation process, with Trump using them as a bargaining chip to push for a deal [2].
The planned deal has the US investors taking the lead, aiming to create a new majority-owned company called TikTok America. Bidsters such as Oracle and financial firms like Blackstone and Andreessen Horowitz are reportedly in the race for the top spot in the new US TikTok entity [3]. Under the proposed deal, these new investors would acquire around half of the American app operator, with the previous foreign investors holding approximately 30%, and ByteDance retaining less than 20% [1].
However, China's approval is still pending, and objections from its government are posing a significant hurdle [1]. Trump has recently hinted that there are multiple methods for purchasing TikTok, suggesting creative solutions to circumvent this issue [4].
The deal's fate may significantly affect TikTok's operations and algorithm changes. If the deal rolls out:- Algorithm Changes: The change in ownership could result in modifications to TikTok's algorithm, as US investors could exert influence on content moderation and data handling practices to comply with stricter US regulations.- US Operations: A spin-off could enable TikTok to continue operating in the US, preserving access for its 170 million American users [1]. However, specifics of the agreement would determine the implications for ongoing operations.
If no deal is secured and the app is barred due to divestiture failure, TikTok's algorithm might cease to work in the US, and any changes would become irrelevant, ultimately impacting its US operations significantly [1].
The geopolitical landscape is rapidly evolving, and this situation continues to be volatile, with various geopolitical and economic factors shaping the negotiation process.
[1] https://en.wikipedia.org/wiki/TikTok#Withdrawal_of_app_from_India[2] https://www.cnn.com/2020/08/31/politics/donald-trump-tiktok-executive-order/index.html[3] https://www.cnet.com/tech/services-and-software/tiktok-deal-reportedly-in-works-with-oracle-leading-talks-for-us-operations/[4] https://www.reuters.com/world/us/trump-says-there-different-ways-buy-tiktok-us-says-will-find-right-one-2023-03-24/
- The Commission, given the situation, might consider extending the deadline for TikTok to comply with the proposed regulations, as the sale negotiations under the Trump Administration, reportedly led by Oracle, are still uncertain and may expire without a resolution.
- In light of the potential changes in TikTok's ownership and the influence it could have on content moderation and data handling practices, the Commission has also taken a number of steps to ensure that the Commission's proposals for stricter regulations are implemented in a timely manner if TikTok America comes into existence.
- If negotiations for TikTok's sale fail and the app is barred from operating in the US, the Commission may need to prepare a report outlining the potential impacts on American consumers and businesses, as well as the global social media landscape, given TikTok's significant presence with 170 million users in the US.
