A deal to prevent TikTok from being banned in the US has plunged into peril as a result of security concerns. The Chinese company ByteDance had reached an agreement with Oracle and Walmart that was designed to allay national security concerns, but Global Times, a newspaper backed by the Chinese state, has suggested Beijing is unlikely to give its approval.
Under the plans, a new US subsidiary would be tasked with running TikTok, a video streaming app that is immensely popular with teenagers.
But the newspaper’s editorial denounced a requirement that four of the five board seats of this company must be held by Americans, with only one reserved for a Chinese national.
“It is clear that these terms extensively show Washington’s bullying style and hooligan logic. They hurt China’s national security, interests and dignity,” the article warned.
Another paragraph added that “as TikTok and Douyin should have the same source code, this means the US can get to know the operations of Douyin.
“If the reorganisation of TikTok under US manipulation becomes a model, it means once any successful Chinese company expands its business to the US and becomes competitive, it will be targeted by the US and turned into a US-controlled company via trickery and coercion.”
This isn’t the only threat to the TikTok deal, which requires approval from regulators in both Beijing and Washington.
While ByteDance says it will continue to own 80% of the TikTok Global subsidiary, Oracle has said that the Chinese company won’t have a direct stake in the business.
US President Donald Trump has also said that he won’t approve the deal unless he is satisfied that Oracle and Walmart have “total control” over TikTok – and warned he is prepared to scrap it.
“If we can save it, we’ll save it, and if we can’t we’ll cut if off,” he told reporters. “We have to have total security. That’s the only thing, very important, we have to have total security.”
As part of a campaign of being tough on China, President Trump and other White House officials have homed in on technology companies, which they say are beholden to the Chinese government through security laws.
The US Commerce Department therefore proposed to ban all downloads of the TikTok app in the US from 20th September 2020, but this measure was delayed by one week to give the companies time to finalise the deal.
Associate Dean for Computing and Security in the School of Science at Edith Cowan University expects China and the US to engage in a bit more back and forth over the structure of the deal.
“In the end, it’s a political fight between two sparring nations, and not really to do with national security or intellectual property.
“At the moment, it looks like China is winning since they hold the ace card: the technology. But if Trump rejects the deal and bans the app, he might chalk it up as a win, albeit one that makes a lot of young Americans unhappy.”