The TikTok situation in the United States complicates further as China publishes new rules regarding technology exports of the country. This would signify that selling of TikTok’s US division might require it’s the parent company, ByteDance, to get the Chinese government’s approval. This would largely affect the forced political divestment of the short video application.
Previously, during Huawei was being pressured by Washington, the Chinese government was behind the company in every way. Whereas, during ByteDance’s struggle, the government kept relatively quiet until now.
Earlier, President Donald Trump had asked the short video application to sell off its United States arm to a US-based company. The China-based application was given 45 days time limit to negotiate and confirm their sell or else the app was threatened to be banned in the country. Trump government alleged that the Chinese application passed on their stored data to the country’s communist government who then used the data to collect several information of the country. The US government also said that the selling off the application would have the full support of the US government if the buying company agreed to pay the treasury a substantial cut.
Several US company showed their interest to buy the social media application. Companies like Microsoft and Oracle was linked with the transaction. They also approached to not only acquire the US division of the company but also add in the TikTok’s Canada, New Zealand and Australia operations.
The Chinese government on Friday put forth a list of companies and technologies that would get banned or be restricted to export. This step was taken for the first time in the last 12 years. Reuters reported the comments of Cui Fan, a professor of international trade at the University of International Business and Economics in Beijing, who said that this new policy would also apply in case of TikTok.
Xinhua published an interview with Cui Fan, where he said, “If ByteDance plans to export-related technologies, it should go through the licensing procedures.”
China Ministry of Commerce added technologies like personal information push services based on data analysis and artificial intelligence interactive interface technology to the list, a total of 23 items that would be restricted henceforth.
To commence a business, it might take up to 30 days for the restricted companies to get preliminary approval from the government to export the technology.
Reuters also reported comments of ByteDance’s general counsel Erich Andersen, who said, “We are studying the new regulations that were released Friday. As with any cross-border transaction, we will follow the applicable laws, which in this case include those of the United States and China.”
The most unique feature that the Chinese company comes with is their algorithm for the “For You” page which is unique for every user. The algorithm finds the best-suited video recommendation for every user according to their behaviour and displays them in the page.
Selling off the US division of the company would mean that the company would also need to sell off its codes and full background algorithm that makes it capable of running such a feature.
On Sunday, ByteDance stated that they will follow all the new technology export rules of the Chinese government and handle its “related export businesses.”
The new deal does not focus on TikTok’s deal exclusively. But the timing of the publication of the list is curious. The Chinese company would face several problems when it goes to sell off its US division.
The foreign ministry of China says that they stand behind the Chinese businesses and opposes the executive orders put out by the Trump government. They said that they will defend the legitimate rights of the country’s businesses.